The government has admitted that less than one-fifth of the projects approved by Michael Gove to enhance towns across England were completed, highlighting challenges for his leveling up agenda.

In response to freedom of information requests, Gove’s department revealed that fewer than 20% of the projects supported under the £3.6 billion towns fund were on track for completion by the end of February 2024. According to the figures, less than half of these projects will be finished by the next election, even if it occurs in November this year.

This data underscored the struggles the Conservatives had faced in fulfilling their promises made during the last election to utilize post-Brexit opportunities to decrease regional inequality in England.

Last year, it was reported that rising costs were forcing local councils to scale back or freeze their “leveling up” projects. Additionally, Michael Gove’s department was unable to allocate nearly £2 billion of housing funds due to a lack of suitable projects to spend the money on.

Jack Shaw, a local government expert who uncovered the figures, stated, “Given this was a flagship policy priority at the last general election, the expectations on the government to deliver new infrastructure in places that have historically been ignored were high.”

“Inflation and interest rates have prevented some projects from making progress, but the government has also failed to respond to those changes and has instead asked places to reduce their ambition. Come the election, current evidence suggests the government will have failed its pledge to ‘level up’ communities.”
Jack Shaw

The towns fund was announced immediately after the last election, with Gove pledging it would give “underinvested towns the much-needed funding and support to get going on their long-term plans”.

The towns fund played a crucial role in Michael Gove’s initiative to level up and enhance infrastructure in regions outside London and major cities. Notable projects include the development of a new investment zone around Blackpool Airport, the establishment of an industrial center in Grimsby, and the revitalization of Bedford’s train station.

However, challenges emerged since the fund’s inception, with high inflation significantly impacting Gove’s budget and creating obstacles to completing construction projects.

Last year, there was a loss of at least £500 million from leveling-up initiatives due to increasing costs, affecting various aspects such as leisure buildings, high streets, museums, and public spaces.

Councils across the country faced delays or had to scale back their plans due to these heightened costs. Some councils also cited a prolonged and bureaucratic process in obtaining approval from Whitehall officials for modifications to their original plans.

Inflation Affecting Cost

A report from Thurrock Council in November 2023 highlighted the authority’s struggles under the strains of increased inflation.

The council was due to spend £22.8m on improving the Tilbury town center, including a new community hub, a youth center, new cycle paths, and a new jetty. Local officials warned there had been “significant cost price inflation” since the plans were submitted, forcing them to review the entire scheme to ensure the council did not overspend.

The report added, “There has been a significant delay in the confirmation of the business cases due to the need for further reassurance and assessment work on governance by [the leveling up department] and the commissioners.”

Shaw’s findings revealed that out of 973 towns fund projects, only 154 were expected to be completed by the end of February 2024. By the end of November 2024, this number would increase to 385, which accounts for just 40% of the total projects.

Over 170 projects are set to conclude by March 2026, which is the official deadline set by Gove for spending all the towns fund money. Some projects are scheduled to finish after this date, but officials suggest this might be because they were counting on additional funding sources to complete the projects.