A flagship “Housing Infrastructure Fund” announced by the Conservative government in 2016 has delivered far more cash to London and southern England than to the north of the country, according to analysis by the Labour party.
The scheme, which provides crucial infrastructure needed for new housing estates such as transport improvements and GP surgeries has so far allocated £3.3bn.
The figures underline the challenge Boris Johnson’s government faces in meeting its commitment to ‘level up’ the UK by investing more money in public services and infrastructure in areas of the north and midlands.
Labour’s research showed that on a per-head basis the fund has delivered just £18 to the north-east and only £4 to Yorkshire & The Humber — against £98 per to London.
“These figures make clear that the Conservatives are neglecting the north of England,” said John Healey, shadow housing secretary. “Despite a decade of under-investment in northern towns, the government is piling up investment in London and south rather than giving the north the infrastructure boost it needs . . . the Tories’ boast to be ‘levelling up’ is just hot air.”
Meanwhile a separate report by the Tory think-tank Onward has found “dramatic” differences in spending to the advantage of London in recent years — in terms of transport, innovation, housing and culture.
“The new government must rethink an approach which has meant that for decades growth enhancing spending has been skewed to the areas which are already the most productive and richest,” said Neil O’Brien, the Tory MP who wrote the Onward report.
In his election manifesto last year Mr Johnson promised to ramp up the Housing Infrastructure Fund from its current £5.5bn to £10bn in order to support the delivery of new homes in local authorities “across every English region”.
But analysis of the £3.3bn spent so far suggests a heavy imbalance towards the prosperous south.
The scheme is made up of two different types of funding. The smaller allocation of £758m, called “Marginal Viability Funding”, is used to provide the final piece of infrastructure funding to get existing development sites unblocked quickly.
The larger £2.5bn element, called “Forward Funding”, is intended for a small number of strategic, high-impact infrastructure schemes.
Examples include £250m for the Greater London Authority to deliver the Old Oak North development in west London; £95m for the A320 improvements in Woking town centre; and £102m for the A40 “Smart Corridor” in Oxfordshire.
The overall allocations were hugely skewed towards southern England, according to Labour’s calculations.
They amount to £2.17bn for London, the south-west and south-east — against just £290m for the north-east, north-west and Yorkshire & Humberside.
A Conservative party spokesperson defended the government’s record and insisted it was committed to closing economic inequality between London and the south and other parts of the UK.
“As set out in our manifesto, we are creating a new £10 billion Single Housing Infrastructure Fund that will help to provide key local infrastructure such as GP surgeries and schools for people buying new homes right across the country,” the spokesperson said.
The report by Onward, called “the Challenge”, argued that government spending has for years been skewed towards the most prosperous parts of the country, in part because of the Treasury’s “Green Book” — which sets spending criteria.
Onward found capital spending on transport in London at £6,600 per head between 2008 and 2019, compared with the English average of £2,400.
The think-tank found direct government spending on innovation — for example through research funding for universities — was nearly twice the UK average in London, at £3,900 per head versus £2,300 per head from 2001 to 2017.
Meanwhile it discovered that London received 47 per cent of Arts Council England spending and central government funding of arts institutions over the same period. On a per head basis culture funding in London was £687 — five times the English average of £144.