The Levelling Up Fund: Round 3
Round 3 of the Levelling Up Fund is to be launched in November 2023. Jonathan Branton and Alexander Rose look at the lessons learned so far and provide tips on how to secure a grant.
Michael Gove, the Secretary of State for Levelling Up, has confirmed that the third round of the Levelling Up Fund will be launched in mid-November 2023. Speaking in the House of Commons on 16 October, Gove announced that he "will make sure that the Levelling Up Fund Round 3 is brought forward just in advance of the Autumn Statement" which is scheduled for 22 November 2023. At present it is not known when the deadline for submitting bids will be set.
The Government's Major Post-Brexit Regeneration Fund
The £4.8 billion Levelling Up Fund has been the Government's major post-Brexit regeneration programme, providing £3.8bn of grants to support capital investment projects across the United Kingdom since 2021.
It is a highly competitive fund. In Round 2 of the Levelling Up Fund there were 529 bids submitted, of which just 20.9% (111) were successful. This included Lancashire County Council’s Eden Project Morecambe, Ashford Borough Council's international film studio and Gateshead Council’s Gateshead Quays Conference Centre and Area. The chances of securing funding were slightly better in Round 1 of the Levelling Up Fund, when 105 (34.4%) of the 305 bids were successful.
This announcement for the Levelling Up Fund Round 3 is distinct from the recent announcement for a similar level of funding to be committed to Towns Partnerships.
Subsidy Control in the Levelling Up Fund
In the previous rounds the government's prospectus has expressly stated that the Subsidy Control compliance of bids will be tested as part of the appraisal process. The government has published a subsidy scheme for the delivery of certain lower value awards, which is expected to be used in this round, as it was in Round 2.
Tips on how to secure a Levelling Up Fund grant
- The best prepared bids have the greatest chance of winning funding, so methodically work through the requirements and make sure the bid sets out how each is met in a credible manner;
- Focus upon building up a compelling case which is backed up by evidence, not soley in terms of local need but also:
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- deliverability (proof the project will spend on time);
- Strategic fit (reflect the wording in the guidance);
- value for money (prove the economic case).
- Although £3.8bn has been committed to projects, underspend might mean more funding becomes available.
While it has not been a stated requirement, we would tend to expect that those projects which can show they are closest to being ready to go at short notice or "shovel ready" may be considered particularly attractive. This is especially in view of the timings of the current Parliament and the need for a general election before the end of 2024.
Opinion
The announcement of Round 3 is great news and has been long anticipated – over £1bn of public funding will be made available to deliver meaningful regeneration projects. Of course, in order to secure that funding bidders will have demonstrate their need and why their proposal merits particularly favourable consideration against others.
The Levelling Up Fund is a fiercely competitive regeneration fund and there's bound to be significant interest from across the country in securing the remaining funding. The best bids tend to have been carefully prepared, with a clear case as to how they will be delivered quickly and compliantly.
Conclusion
News that there will be a third round of the Levelling Up Fund will cause excitement and anxiety.
This appears to be the final round of the fund and the expectation is that c. £1bn of grant funding will be available. Bidders will want to give themselves the best possible chance of securing funding, which means preparing detailed bids which explain how they meet the strategic objectives of the fund, will be able to spend quickly and meet the compliance requirements.
Jonathan Branton and Alexander Rose are Partners at DWF.
