Inflation Knocks £170m Off Value Of Local Investment Cash, New Data Suggests
Regeneration work in Slough (Alamy)
Inflation has reduced the value of the government’s Towns Fund, used for regeneration and investment across England, to the tune of more than £170million, according to new data.
Analysis suggests that the economic squeeze means that the £2.35 billion for the fund allocated to 101 towns in England in 2021 is now worth around £2.17 billion, a loss of around £172 million.
The House of Commons Library data, commissioned by Labour MP Mike Amesbury and seen by PoliticsHome, suggests that all regions that were awarded money have seen their towns’ allocations lose value, but the North West has lost the most at around £35 million.
The Towns Fund cash is earmarked to "foster economic regeneration, stimulate investment and deliver vital infrastructure", according to the gov.uk website. It is separate from recently allocated Levelling Up Funds, but forms a part of the government's wider levelling up agenda, and is overseen by Michael Gove's department of the same name, which Labour say is now “in chaos”.
PoliticsHome has previously reported "real real" concern among MPs about the future of their projects supported by the separate Levelling Up Fund, as they have to deal with rising costs and inflation.
Shadow levelling up secretary Lisa Nandy told PoliticsHome that any delays or alterations to Towns Fund backed projects that now arise are "symptomatic of a broken system" and called on ministers to end the "Hunger Games-style" approach.
She said: “The levelling up agenda is in chaos. As a result of the Tories crashing the economy and pushing UK inflation to nearly the highest rate in the G7, vital projects have been delayed and now many face being downsized or scrapped altogether.
“This is symptomatic of a broken system where communities are forced to go cap-in-hand to Whitehall for small pots of money with strings attached. It leaves them especially exposed to economic shocks – not least those brought on by Tory governments."
A Department for Levelling Up, Housing and Communities spokesperson said: “The £3.6 billion Towns Fund will transform communities across the country. We are closely monitoring the impact of inflation on projects and working closely with councils and delivery partners to ensure public services are protected and projects delivered.
“Thanks to the fund we have already opened projects such as a digi-tech factory in Norwich and are on track to shortly open a £2.6 million T-Levels Centre in Doncaster and £2.4 million Education College in Redcar. These projects will create highly-skilled jobs, drive growth and level up across the country.”
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