You know a lot has changed when the birth of ‘levelling up’ feels like a lifetime ago. The launch of the flagship fund by then-Chancellor Rishi Sunak was in *checks notes* 2020, but it already feels like the tectonic plates of politics have shifted beyond recognition.
Hot on the heels of the Towns Fund, the Levelling Up approach – not just the fund but the wider strategy – was aimed at closing the gaps between the high-productivity economies (mainly in the south) and, well, everywhere else. Alongside wide-ranging policy interventions, it targeted a slew of specific locations with cash for capital projects.
But, in the short time since, inflation has rocketed to a 40-year high and the days of being concerned with the speed of the post-pandemic bounce-back seem like a fever dream.
As social impact developers, we’re delivering regeneration projects being in part backed by various such funds. Through change in circumstance, many of these projects across the country are now facing a staggeringly different picture than when first conceived, with higher construction costs – everything from materials to trades – and inevitably higher operating costs when they’re done.
It’s making achieving levelling-up ambitions harder, especially when you consider that the very objective of the strategy is to deliver stuff in areas with inherently lower values posing viability challenges from the get go.
We’ve recently been in situations where delaying decisions by just a matter of days would add hundreds of thousands of pounds or millions to the bill. Contractors that can only hold costs for a week before they’re revised up again. It makes delivering a project that can take years a nightmare.
It’s a race against time for local authorities and the winners will be those who can keep the pace.
Take the Goods Yard, the £60m neighbourhood we’re delivering with Stoke-on-Trent Council. It’s the area with the highest levelling up settlement and, as a project, among the single biggest awards. When complete, it’ll turn a fairly unloved industrial site into a buzzing neighbourhood with homes, edgy workspaces and green public spaces.
We’ve made rapid progress. In less than 18 months we struck up the partnership with the council, designed, consulted on and consented a new major neighbourhood and are now underway on site. It’s not unheard of for that to take years. But we knew it was an absolute priority for the council and pulled out the stops to make it happen.
Call it fortuitous, but if we were just 6 or 12 months behind, we may be having some very difficult discussions now.
Critical to keeping this pace is partnering ambitious local authorities with like-minded private sector partners when it comes to both delivery and long-term viability. The Goods Yard is a significant investment in Stoke-on-Trent, but like all projects, it’s vital it has a sound business model.
Rather than doing something for the sake of ticking the levelling up box, these projects up and down the country need a carefully crafted case and long-term plan to ensure they not only deliver a return (whether economic, social or cultural – preferably all three), but don’t saddle local authorities with more long-term running cost burdens. At a time of rising costs, we must avoid projects being mothballed just a few short years after delivery because the idea didn’t translate from paper to practice.
Whilst the political plates have shifted, levelling up looks set to live on in a slightly different guise. Friday’s unveiling of the new Chancellor’s ‘The Growth Plan’, the mini-come-maxi budget, unveiled planned Investment Zones and a focus on speed to stimulate economic growth. The cynical may say the focus on speed is down to the election cycle. Perhaps. But, at this moment, it’s a must.
If the new policies incentivise investment, streamline the planning process and put a laser focus on getting development sites going quickly, then they could work. It could help those major levelling up projects weather the economic storm and avoid becoming a casualty of inflation before spades have even broken ground.
That said, this doesn’t mean local authorities need compromise on vision. Being conscious of cost doesn’t mean you have to compromise a bold design approach; cut back green and inclusive spaces for people to meet; or retreat to bland and personality-free development.
In fact, all the more reason to double down on those creative principles.
Levelling up should leave behind a special legacy of which local authorities can be proud, ideally one that reflects the diversity and identify of place, and embraces this to create new opportunities.
Even better, it offers a rare chance to deliver catalytic communities – projects that may have not been viable without the funding, but will make massive strides in creating a local market and, in time, spurning a growth ripple effect from which local authorities can reap rewards.
For us, a non-negotiable will always be the social impact that our communities generate. At a time of severe cost constraints, that’s one thing both we and the levelling up agenda can’t afford to cut.
Tim Heatley is co-founder of Capital&Centric.
