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Evidence briefing: Levelling Up Fund interventions and impacts

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The Government’s Levelling Up Fund prospectus states that the first round of funding will focus on:

  • Transport investments
  • Regeneration and town centre investment
  • Cultural investment

This briefing is designed to help places understand the likely local economic effects of these types of projects. This will help them to design bids that are better-placed to deliver economic growth in addition to specific project outputs such as improved transport links or renewed public spaces.

The briefing summarises the available evidence on the economic impacts of: transport interventions; physical regeneration projects (upgrading buildings, investing in community infrastructure, etc.); and sport and culture investments. It draws on existing analysis and reviews done by What Works Growth.

Many of these investments will also have non-economic objectives, for example improving mental and physical health. We think that these outcomes are important, but this note is focussed on the evidence on economic outcomes.

Find out more online about evidence on what works to support local economic growth and the support we can offer to local partners. 

Summary of findings

Of the intervention types supported by the Levelling Up Fund, transport projects are the ones for which the evidence on economic outcomes is most positive. However, even for transport projects, impacts are highly context dependent. In already successful places, investment may be needed if the costs of growing demand, such as congestion, have become a barrier to further growth. In struggling places, transport investment might attract new employment and improve productivity, but effects will be limited if other factors, such as education and skills, matter more than transport in explaining poor local performance. 

Major physical regeneration such as the London Docklands redevelopment can improve local economic outcomes by fundamentally changing the nature and composition of firms and residents in an area. However, there is little evidence that such transformation significantly improves outcomes for existing residents. Complimentary investment to improve local skills and education may help existing residents if they are then able to access newly created local jobs.

More limited investments in the built environment or cultural assets are unlikely to deliver significant economic improvements in struggling areas. It is difficult for these supply side interventions to generate lasting impact on demand for locally supplied goods and services, which is necessary if they are to deliver economic growth. Even major projects in these areas may simply displace activity from one area to another.

However, physical regeneration of public spaces and buildings, and new cultural assets might have important quality of life impacts for residents by, for example, improving accessibility, encouraging outdoor activity, or reducing social isolation. If these are policy objectives it is important to consider the evidence on whether they will be achieved. As an example, a review of estate renewal interventions found that studies that considered health or wellbeing impacts found mixed results – some positive, some zero.

If funding is ring-fenced and must be spent on physical regeneration, resident outcomes and value for money may be better served by funding well-evidenced interventions designed to improve quality of life, than by funding interventions that have unrealistic goals for economic growth.

Transport interventions, estate renewal, and other ‘public realm’ interventions are likely to increase property values, although the evidence suggests these effects will be limited geographically, rather than benefitting a whole town. Property owners will benefit from these price increases, renters will lose. Unless employment and wages improve to offset any increases in housing rents, some existing residents may be worse off or may be forced to move away.


Evidence Briefing: Levelling Up Fund interventions and impact