Agenda item

[To consider a report on Levelling Up Funding]. 

The Cabinet Member for Inclusive City Economy gave a statement on Levelling Up Funding.  The Council had submitted two strong bids in round 2 of the Levelling Up Funding programme announced by the Government.  Each bid had been supported by a Wolverhampton MP.  He was really disappointed that the Council had not received funding for either of the bids, he had been shocked by the news.  The vision for Wolverhampton would however continue and they would continue to champion the bids.  The Council had learnt a couple of weeks before the announcement that there were new criteria for who would receive funding in round 2.  Areas that had received funding in round 1 would not receive any in round 2.  The Council were still awaiting feedback for the failed bid for the Health and Wellbeing Hub for Bilston.  He was critical of the Government process for Local Authorities seeking funding, as had been the Mayor of the West Midlands Combined Authority area. 

The Director of Strategy and the Director of Regeneration gave a presentation on Levelling Up and the Funding bids which had not been successful, a copy of the presentation is attached to the signed minutes.  They described the nature of the bids that had not been successful.  A timeline was provided.  The Bilston bid had taken up 429 hours of staff time and £78,000 had been spent on Consultants costs.  The Green Innovation Hub had taken up 390 hours of staff time and £74,000 had been spent on Consultants costs.  The majority of the Consultants costs had been met by a grant provided by the Government, but it did not cover all the staff time spent on the bids. 

The Director of Strategy commented that the West Midlands were the fourth highest region in terms of funding awarded, out of a total amount of £2.1 billion nationally for round 2 Levelling Up funding.  In the West Midlands there had been 8 successful bids with over £155 million being allocated across the region.  Feedback as to why the Green Innovation Corridor bid was unsuccessful was received on 21 February 2023.  They were in ongoing discussions with the Department for Levelling Up, Housing and Communities.  Nationally only two Local Authorities in Northern Ireland had received funding in both rounds.  A new rule that had been introduced during shortlisting stated that authorities would not receive any round 2 funding, if they had been successful in securing funding in the first round.

The Director of Strategy remarked that the feedback on the Green Innovation Corridor bid was that it was a relatively strong bid.  They said it was:

·       Clearly written and took a guidance led approach to appraisal.

·       There was clear evidence to support the bid.

·       It could have been further strengthened with more detail on consultation and conclusions drawn from engagement, options appraisal and further explanatory notes to support Benefit Cost Ratio calculations, though it was noted the BEIS model was used.

·       Could have been strengthened with more information on governance of Joint Venture and timescales to secure match funding, though it was noted that this was early stages and noted expressions of interest.

·       There was a satisfactory financial proposal, commercial strategy and delivery plan.

·       There was good alignment to national and local strategies, which clearly set out the contribution to Levelling Up missions. 

The Director of Strategy stated there would be a round 3 of Levelling Up Funding, but the Council had not yet been provided with any details of timescales.  She presented a slide showing where Growth Funds were having an impact in the City’s Wards, which had been a previous request from the Scrutiny Board.  She also showed slides showing the external funding bids which had been successful or unsuccessful, this included key transport bids. 

A Panel Member asked about the prospect of Levelling Up Funding to be used to provide affordable housing for people in the City.  The Director of Strategy responded that Good Homes in Well Connected Neighbourhoods was a key part of the Council’s Our City: Our Plan.  She referred to the potential to bid for funding from the WMCA (West Midlands Combined Authority) to deliver the Council’s plans on housing.  It was yet to be announced the timescale and criteria for the Government’s Levelling Up, round 3 funding. 

Members of the Panel expressed dissatisfaction with the extra rule that was added regarding eligibility for round 2 Levelling Up funding, which meant the Council could not be successful in round 2 bids, as the Council had received round 1 funding.  The Council’s external Auditors they believed would be interested in the matter. 

The Cabinet Member for Inclusive City Economy acknowledged the concern of Members and added that it meant the Council could potentially be more hesitant to apply for funding in round 3 of Levelling Up Funding.  He added Belfast had proven to be an exception to the rule, where funding had been awarded in round 1 and round 2.  He was only made aware of the new rule officially by Government two weeks before the announcement of the successful bids. 

A Member of the Panel asked if Wolverhampton’s unsuccessful round 2 bids could be submitted again in round 3.  If the bids could not be submitted again she asked where the funding could be obtained from to bring the projects to fruition.  She thought it would be useful for the Scrutiny Board to receive information in the future on what other funding streams remained available.  The Director for Strategy responded that they would be seeking to clarify what was permissible for round 3 funding.  An announcement from the Chancellor was expected on the 15 March 2023, which could potentially contain details about funding streams.   The Council would continue to look at funding streams and would report back to Scrutiny Board in the future. 

A Panel Member asked for the long list of proposals and the short list of proposals that were considered by the Council to put forward for Levelling Up round 2 funding, to be provided to Scrutiny Board Members.  They believed that some of these proposals were not in the spirit of the Levelling Up ethos.  He expressed concern about whether there had been appropriate consultation and engagement on the round 2 bids.  Culture and heritage he felt did not feature in the final round 2 bids from Wolverhampton.

The Director of Regeneration responded that the long list of proposals was worked on with the local Members of Parliament and was in keeping with the Council’s Investment prospectus.  He was happy to share the long list and the information which shaped the bids. 

A Panel Member commented that the City had in recent times received £1.3 billion from the Government through various funding streams.  She felt this was an enormous amount compared to some other places in the country.  She felt execution was important, as well as obtaining the initial funding.  She praised Walsall for their successful bid, which she felt would benefit Wolverhampton and in particular the Bilston area.  She hoped Wolverhampton’s round 2 bids would be successful in the future.

The Cabinet Member for Inclusive City Economy spoke highly of the City Learning Quarter project, which had been successful in round 1 and the benefits this would bring to the City. 

The Vice-Chair commented that the most important question to ask was whether the right bids had been put forward for round 2, Levelling Up Funding.  He was keen for all Members of Scrutiny Board to see the long list of proposals and to understand how the list was devised, including why some did not make the short list.  He felt Members could have been asked for their ideas for bids.   He referred to Dudley Council who had demanded an inquiry as to why their bids had been unsuccessful.

A Panel Member praised the bid for the Health and Wellbeing Hub in Bilston, which would bring enormous benefits to the area including new jobs and reducing health inequalities.  She suggested that the Council could try and claim some of the costs from devising the bids, back from Government, due to the late change in the criteria. 

A Panel Member asked about the input the Council had already had on round 3 of Levelling Up Funding with the Government and the WMCA Mayor.  He suggested that work needed to take place promptly. 

The Vice-Chair suggested that all Councillors should be involved with the planning for Levelling Up round 3.  Each Councillor should be asked to provide ideas to ensure the community was represented.

A Panel Member stressed the importance of costings of bid formulation and the timetable for round 3 Levelling up funding proposals. 

The Director of Strategy responded that there were no details on round 3 from Government to date.  She had taken on board the points about Member engagement.  The final say on bids in rounds 1 and 2 were from the local Wolverhampton Members of Parliament who had to sponsor each bid.  She did not know if this would change for round 3.  The Leader of the Council had written to the Secretary of State to discuss funding. 

The Chair asked for any feedback on the unsuccessful Bilston Health and Wellbeing Hub to be shared with Scrutiny Board Members as soon as it was received. 

Resolved: That the report on Levelling Up Funding be noted.