Funding towns: Good policy or electioneering?

By Prof Cathy Parker

Whilst the current political and economic uncertainty surrounding Brexit is generating division and negativity at a national level, there have been a lot of new policy announcements recently that are, paradoxically, good news for local town centres and high streets.

The Budget of October 2018 promised to cut the business rate bills of small retailers by one-third; a package that is worth nearly £1bn[1].  At the same time, the £675m Future High Streets Fund was launched to support the transformation of England’s high streets, from mono-functional retail centres to multifunctional community hubs. The October 2018 Budget also announced the creation of a High Streets Task Force, to provide much-needed expertise, training, data and insight to the place leaders and partnerships that are reinventing their local areas, with a budget of just over £8.6m for 5 years. The Institute of Place Management is leading a consortium of partners to run the High Street Task Force, which will be fully operational by July 2020.

In March this year, Theresa May announced a £1.6bn ‘Stronger Towns’ fund to “give communities a greater say in their future after Brexit”. In July this was increased by another £1bn to fund a total of 100 towns, by the new Prime Minister, Boris Johnson. Shortly after this, the Future High Street Fund was increased from £675m to £1bn, with the announcement that an additional 50 high streets would be funded (taking the total amount of high streets to 100). So, if I have done my maths correctly, this means around £3.6bn of funding for high streets and town centres (including the heritage high street action zones and High Streets Task Force) without including the additional rate relief.

As an academic who has been researching town centre change for over 20 years, I have never seen this level of investment or such a commitment to local decision making and action from any previous Government.  However, as a researcher, given the current political and economic uncertainty we are facing AND the unprecedented levels of commitment to town centres and high streets, I have to ask, are the two related?

The Stronger Towns Fund was explicitly related to Brexit. When the fund was launched it was soon nicknamed ‘The Brexit Bribe’, and, my analysis of the EU referendum results of those 100 towns on the list reveals the mean score for ‘leave’ in this group of towns is 60.4% – compared to the 51.89% for the UK as a whole. This appears to support those critics that say the fund is ‘pork barreling’, or a way of ‘buying’ local votes (encouraging Brexit voting areas to vote Conservative in a General Election). What is more, 62 of the towns on that list have majorities less than 5,000.

So, surely this allocation of funding is politically motivated? What could be the policy rationale for giving money to places that want to leave the EU more than those that do not? Or towns that are in marginal constituencies? According to a spokesman for the Ministry of Housing, Communities and Local Government “(a)ll 100 towns were chosen according to the same selection methodology. This included analysis of deprivation, exposure to Brexit, productivity, economic resilience and investment opportunities.”[2]

Whilst I don’t know how the scoring was undertaken, there are two criteria on that list which are fairly easy to investigate; exposure to Brexit and deprivation. The other (obvious) influence we are interested in is the extent to which a town represents a marginal seat.

First, I wanted to know if there was a relationship between the extent to which an area voted to leave the EU in the 2017 referendum and its ranking in terms of indices of multiple deprivation[3]. The new indices were published last week[4] and I found a moderate negative correlation (-0.38) for the towns on the list between the leave vote (as a percentage) and the average ranking (with 1 being the local authority with the most deprivation).

So, whilst the Towns Fund is undoubtedly a fund for leave voting areas, there is some relationship between the more an area voted to leave and the average level of deprivation it has. In wider studies, when both leave and remain areas are analysed, researchers have found “that areas with deprivation in terms of education, income and employment were more likely to vote leave”.[5] In other words, a leave vote may well be a proxy measure for deprivation.

Secondly, I wanted to investigate the marginal nature of the constituencies associated with many of the towns on the list. To do this, I looked up the most marginal seats in the UK after the 2017 General Election[6] and found that over a quarter (26%) of constituencies had majorities of less than 10%. Further, of the 100 most contested seats in the last election, more than 2/3rds of these represent towns.  In this respect, the whole policy of supporting towns could be said to be politically motivated, in that towns represent so many marginal seats that to form a government in the next General  Election any political party needs to win a significant amount of them.

Finally, I revisited the list of towns, and looked at all three criteria (deprivation, Brexit and marginality) consecutively. I looked at deprivation first and found 62 towns on the list were in local authority areas that ranked in the top 100 in terms of average deprivation. Therefore, there is, arguably, a genuine need for these places to receive funding. Of the 38 remaining, I looked at ‘exposure to Brexit’ and found 32 of the remaining 38 had voted above the national average to leave the EU. Local authority wide rankings of average deprivation may mask local economic and other problems, so ‘leave’ may be a proxy for more localised deprivation. For example, Dudley, one of the towns to get the funding, voted to leave the EU by 67.6%. Further analysis of deprivation at a town level would be more conclusive, but at the moment I am treating “exposure to Brexit” as a valid funding criterion (a proxy for income/employment and other domains of deprivation).

This leaves six towns that are not in the Top 100 most deprived local authority areas and were more positive about the EU when compared to national average of results in 2017. These towns are Bedford, Cheadle, Glastonbury, Milton Keynes, Newhaven and Staveley. Of these six, four have majorities of less than 5,000 (Bedford, Cheadle, Milton Keynes and Staveley). The other two (Glastonbury and Newhaven) are both in Conservative constituencies with majorities over 5,000. These six are the towns that stand out to me, where I might question the motivations behind allocating funding. However, there is a ‘need’ argument for the majority of towns on the list. There is also a need argument for towns to feature far more in Government policy full stop. Whilst we may find reasons for disagreeing with the funding decisions for some of the towns, overall this policy (and all the other policies) that are supporting town centres and high streets are to be welcomed. However, if we are going to fix a divided society on a town-by-town basis, much more funding will be needed, whoever is in power.


[1] https://www.theguardian.com/business/2019/aug/26/struggling-high-streets-fund-increased-to-1bn

[2] https://www.manchestereveningnews.co.uk/news/greater-manchester-news/boris-johnsons-choice-left-behind-16891216

[3] The domains of deprivation are income, employment, education, health, crime, barriers to housing, and living environment.

[4] https://www.gov.uk/government/statistics/english-indices-of-deprivation-2019

[5] Sascha O Becker, Thiemo Fetzer, Dennis Novy, Who voted for Brexit? A comprehensive district-level analysis, Economic Policy, Volume 32, Issue 92, October 2017, Pages 601–650, https://doi.org/10.1093/epolic/eix012

[6] https://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-8067#fullreport