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The government needs to devolve infrastructure decision making and spending

The government has made a mistake by continuing with competitive levelling up funds

While the long-delayed National Infrastructure Strategy contains valuable ‘levelling up’ funding for regions outside London, Alistair Baldwin says the government has made a mistake by continuing with competitive funds and by failing to engage with devolved authorities and sub-national bodies    

Accompanying the Spending Review on Wednesday 25 November, the government published the National Infrastructure Strategy (NIS). Originally due to be published in early 2019, six months after the National Infrastructure Assessment, the NIS set out how the government will “build back fairer, faster and greener”. The IfG called for a National Infrastructure Strategy in 2017, saying that it would articulate a vision for how departmental policies and projects would help meet national objectives. It is good news that it has finally been released, but the NIS contains gaps and missteps too.

There are announcements to welcome in the NIS

There are several positive commitments in the NIS that will help the government with its ambitions to devolve power and ‘level up’. It responds to many of the elements of the National Infrastructure Assessment and confirms funding for strategic roads and rail, flood defences and broadband. Most importantly, there is a pot of £4.2bn over five years for the largest city regions outside London to spend on transport from 2022. This also comes with £50m in advance to prepare schemes, allowing time to be spent assessing early options.

Press attention also focused on the £4bn ‘Levelling Up Fund’, which will be invested in relatively small local infrastructure projects across England and managed by three government departments (MHCLG, DfT and HMT). While the NIS notes that this is “moving away from a fragmented landscape with multiple funding streams”, it will coexist with an array of other funds with similar goals like the Future High Streets Fund, Towns Fund or Local Pinch Point Fund.

Competitive funds cause their own problems for transparency and delivery

The Levelling Up Fund will be another competitive fund that local authorities will be expected to bid into. Past research has indicated that even preparing these sorts of bids will cost tens or hundreds of thousands of pounds for each authority [1], at a time when budgets are under increasing strain. Using bids rather than a formula that allocates funds based on need or past investment also delays how quickly projects can begin. The Transforming Cities Fund was announced in the 2017 autumn budget but, following a competition process, full allocations weren’t made until the 2020 March budget.

Similar funding pots, like the Towns Fund, have also been stung by claims of apparent political bias in how they were awarded. It is unusual too that a fund explicitly based around ‘levelling up’ should be open to every local authority in England, leading to accusations that it could be used to fund pet projects in politically advantageous areas. The chancellor initially announced, then quickly stepped back from the idea [2], that the support of MPs would be required for bids to be accepted. This indicates that the government may be unsure of how it wants proposals to come forward, or that it is nervous about further accusations.

The government appears to want to do things to local areas rather than with them

Over the past five years, groups of authorities and local enterprise partnerships have formed to undertake strategic transport planning and prioritise investments for their area. One of these ‘sub-national transport bodies’, Transport for the North, has received statutory status, giving it powers over strategic planning, ticketing and rail franchising. It was disappointing that the NIS did not mention these bodies at all. While they have different capacities and capabilities, their links to local areas and ability to think strategically make them an important part of infrastructure investment for road and rail. That the DfT has also cooled on putting any more on to a statutory footing [3] may be an indication that the government does not seek to devolve more powers to these bodies.

There is speculation that disagreements with combined authority mayors and local authorities over the Covid-19 response have stymied the government’s enthusiasm for devolution, with the devolution white paper now not expected for at least another six months. [4] But personality disagreements shouldn’t get in the way of good policy making and decision making on infrastructure.

For the NIS to be effective, it will need to use the capabilities of all levels of government. The IfG previously argued that the NIS should provide a roadmap for increasing the capacity of sub-national institutions, and this was conspicuous by its absence.

While there are welcome elements in the NIS, the government needs to use the forthcoming devolution white paper to set out how it will work with sub-national governments to agree infrastructure priorities. The current arrangement is more ‘decide and provide’ rather than allowing areas to influence the infrastructure that affects them.


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