Budget 2021 explained: the fund-amentals for communities
The 2021 Budget contained some key updates and information from the UK Government on both new and existing place-based funding streams.
Whether you’re confused by the difference between the Community Renewal Fund and the Community Ownership Fund, unsure what is meant by City Deals and Towns Deals, or wondering what is happening with the UK Shared Prosperity Fund, read our Budget explainer below:
Worth £3.6 billion, the Towns Fund is targeted at driving economic regeneration in towns across England. In September 2019, the Government invited 100 places to develop proposals (i.e. a ‘Town Deal’) for how they would spend money from the Towns Fund.
The first seven Town Deals were signed off by the Government in October 2020.
In today’s Budget, the Government announced that a further 45 Town Deals had been agreed.
City and Growth Deals
These deals support long-term strategies for economic growth in the UK’s cities and regions.
In today’s Budget, the Government announced that £84.5 million will be brought forward over the next five years to speed up six City and Growth Deals in Scotland and Wales.
Levelling Up Fund
Announced at the Spending Review in December 2020, the Levelling-Up Fund will “invest in local infrastructure that has a visible impact on people and their communities”. The fund is worth £4.8 billion, some of which is money diverted from the Towns Fund [paywall].
Although managed by the UK Government via the Treasury, MHCLG and the Department for Transport, the Levelling Up Fund is accessible to local areas from all four nations of the UK.
In today’s Budget, the Government opened applications for the Levelling Up Fund and published a prospectus to provide guidance to local authorities on how to submit bids.
The Government has also given local areas a ranking between 1 and 3, where ‘1’ areas are considered most in need of ‘levelling up’ and will be prioritised for investment from the Levelling Up Fund.
UK Shared Prosperity Fund
As the UK is no longer a member of the EU, the UK will not receive new money from EU structural funding streams. The Government intends to create a new fund, the UK Shared Prosperity Fund (UKSPF), to replace structural funding schemes and reduce inequalities between communities in the UK.
In December’s Spending Review, the Government announced that it would provide funding for communities across the UK to “pilot programmes and new approaches” in 2021/22 and prepare for the introduction of the UKSPF in 2022.
In today’s Budget, the Government revealed that this funding to help communities prepare for the UKSPF will be called the UK Community Renewal Fund.
It is worth £220 million and will be open to bids from local areas across the UK. The Government has earmarked 100 “priority places”, including 13 local authorities in the East Midlands, to receive capacity funding to help them put together their bids.
The Government also published a prospectus on the UK Community Renewal Fund, containing information on investment priorities and guidance for applicants.
Community Ownership Fund
From June 2021, community groups will be able to bid for up to £250,000 matched funding (i.e. matching funds which the groups have raised) to purchase local assets to run as community-owned businesses.
Up to £1 million matched funding could be available to community groups seeking to take over a sports club or ground. A prospectus for the fund will be published in June.
What to make of Budget 2021
As ever, the Budget produces as many questions (how will all these place-based funding streams work together?) and silences (no mention of the devolution white paper again) as it does answers.
But at least we now have a clearer idea of the purpose of the Levelling Up Fund and finally some steps towards the introduction of the UKSPF.
The new Community Ownership Fund in particular looks like a really positive development towards community-powered approaches.
However, there are dangers in that so many of the funds require competitive bids – meaning local authorities risk wasting resources preparing bids, for processes ultimately run by central government.
The budget also leaves a hole in the form of funding for local government. Without proper investment in the vital services councils provide, communities will struggle to level up or build back better – whatever snappily named pots of money they now have within their grasp.Join our mailing list