Report of the Strategic Director (Growth and Development)

This report provides a summary of the UK Shared Prosperity Fund as it applies to Manchester including the context of the UK Government’s Levelling Up agenda, and the competitive Levelling Up Fund which it sits alongside. 

The committee considered a report of the Strategic Director (Growth and Development) which provided a summary of the UK Shared Prosperity Fund as it applied to Manchester, including the context of the UK Government’s Levelling Up agenda and the competitive Levelling Up Fund (LUF) which it sat alongside.

Key points and themes within the report included:

• Manchester was classed as a Priority 1 area for Levelling Up by the Government, based on need for economic growth, improved transport connectivity and regeneration;
• 2 bids were submitted by the Council in LUF Round 1, of which one – ‘Culture in the City’ – was successful. A bid to regenerate Withington Village was unsuccessful. A bid submitted in LUF Round 2 to regenerate Wythenshawe Town Centre was also unsuccessful;
• Culture in the City aimed to deliver 8,282m² of high quality, affordable, technology and creative work and production spaces at HOME Arches and Campfield Market, with £19,822 million awarded from LUF;
• The Shared Prosperity Fund (SPF) was launched in April 2022 as a replacement for European Structural and Investment Funds (ESIF) following Brexit, and the distribution of this across all areas of the UK meant that Greater Manchester’s proportion of this is substantially lower than that from ESIF; and
• Manchester was allocated a total of £5,013,823 in SPF for Communities and Place funding which was prioritised for investment in district centres.

Key points and queries that arose from the committee’s discussions included:

• Welcoming the Executive Member’s recommitment to investing in Wythenshawe town centre;
• Whether there was any indication from government to increase local funding allocations to account for the fact that some areas had disproportionately been unsuccessful with LUF and other funding schemes;
• Welcoming support for business start-up and incubation, and querying if there were any additional contingencies to support businesses during the cost-of-living crisis;
• Conveying frustration at the government rule introduced during the decision-making process that any applicant council who had been successful in Round 1 would be unsuccessful in Round 2 and the time and resources that this misused;
• How SPF could work with local labour market policies and how this would help residents;
• The process for unsuccessful funding bids;
• The devolution trailblazer scheme for Greater Manchester;
• Whether the Council is consulted on funding simplification; and
• The criteria for SPF and how are resources assigned to evaluate this.

The Executive Member for Housing and Development explained that the UK Shared Prosperity Fund and Levelling Up Fund were two funding pots which the government released as part of their wider Levelling Up strategy. He stated that the Council had submitted a strong bid in round 2 of the LUF for £20million to transform and invest in Wythenshawe which was rejected without formal notification to the Council. He stated that he had some concerns with the LUF allocation process generally as it made local authorities compete against each other, but he reiterated the commitment of the Council’s Labour administration to investing in Wythenshawe.

The Strategic Director (Growth and Development) stated that the Council had tried to access LUF resources to support ambitious developments and plans and explained that the Council had one successful LUF bid for ‘Culture in the City’ despite subsequent unsuccessful bids in Withington and Wythenshawe. She explained that the SPF would be targeted in and around Withington to develop elements of the unsuccessful LUF bid and in Moston in line with the Council’s objectives and Neighbourhood Frameworks. She also stated that some Community and Place funds from the SPF were yet to be allocated and proposals would be developed in line with Neighbourhood Frameworks. 

The Strategic Director (Growth and Development) explained that there was limited funding for business start-up and incubation spaces, but Manchester had received almost £2million of funding for this and a Hub and Spoke model was in place to target support in different areas of the city. She highlighted that the SPF did not provide the same amount of funding as its predecessor ESIF, but officers were working to maximise its impact in the city in consultation with Executive Members.

In response to a query regarding whether the government might increase local funding allocations when an area had been unsuccessful with LUF and other funding schemes, the Strategic Director (Growth and Development) stated that there were no indications of this. She informed members that there would be a third round of LUF bids, and the Council would await further detail on the criteria for this before deciding whether to resubmit the Wythenshawe bid or submit a new bid for other parts of the city.

Members were informed that the Council was seeking greater certainty over funding through the devolution trailblazer negotiations.

Members were also advised that there was no dedicated support for businesses during the cost-of-living crisis within the SPF. The Director of Inclusive Economy advised members that The Growth Company was providing support for business through its “Here for Business Campaign” and the Greater Manchester Combined Authority (GMCA) had brought forward some SPF funding to help The Growth Company with this. This included clinics and in-person sessions in each local authority area in Greater Manchester.

The Director of Inclusive Economy explained that GMCA administered the Supporting Local Business and Work & Skills priorities within the SPF and would work with the Council to design how this would operate in practice. On labour market interventions, she advised the committee that a ‘deep dive’ had recently been undertaken on economic activity in the city which could be used as an evidence base to inform the design. She acknowledged challenges in that the totality of the SPF funding was less than that of ESIF and with a 3-year timeframe with the labour market intervention toward the end of this, this could be an issue for those distant from the labour market.

In response to a question regarding the capital gateway approval process, the Strategic Director (Growth and Development) informed the committee that this was an internal process for submitting an item to the Capital Programme, with proposals progressing from CP1 and CP4 as they are further developed and costed, and she confirmed that those projects which were unsuccessful in the LUF bids would be subject to this process.

The Strategic Director (Growth and Development) explained that various officer groups across the GMCA, such as the GM Directors of Place and GM Chief Executives Group, would review any proposals for a devolved single pot of funding. Various proposals had been put forward with a number of different priorities on issues such as transport, housing and work and skills. This would shape the Council’s approach to funding as it would provide a greater degree of flexibility should the proposals be accepted.

It was also stated that the Council was subject to evaluation around the number of jobs and employment space created, low carbon impacts and training and apprenticeship opportunities arising from SPF funding. This was reported to GMCA who fed back to the government on Manchester’s behalf. The Principal Resource and Programmes Officer advised that this was relatively modest and the Grant Funding Agreement which dictated the level of monitoring was very similar to that of ESIF previously.

Decision:

That the report be noted.