Rishi Sunak’s boast at a Tunbridge Wells summer garden party of undoing Labour policy that “shoved all the funding into deprived urban areas” to give more to regions such as Kent looks likely to haunt him as his commitment to levelling up is questioned. At Sunak’s first prime minister’s questions on Wednesday, the Labour leader, Keir Starmer, challenged him over the clip, filmed during the previous Conservative leadership race, which seemed to show his pride in diverting money from poor cities to wealthier towns such as Tunbridge Wells. “I managed to start changing the funding formulas to make sure that areas like this are getting the funding they deserve,” Sunak tells Tory party members at the summer event. Tunbridge Wells is one of the UK’s most affluent towns in one of the least deprived counties in England. Starmer asked why Sunak did not now “do the right thing and undo the changes he made to those funding formulas”? The new prime minister doubled down on his position, saying: “There are deprived areas in our rural communities, in our coastal communities and across the south and this government will relentlessly support them.”
That is strictly true: there are poorer parts of south coast towns such as Hastings, impoverishment on the north Kent coast and struggling parts of the countryside in counties such as Wiltshire. But it is not a strong argument for places such as Tunbridge Wells to get more money from central government, and appears to run counter to Boris Johnson’s levelling-up agenda in which wealth redistribution became fused with the party’s need to keep the “red wall” parliamentary seats in the north of England and the Midlands. Successive Conservative governments have changed funding formulas, including switching the allocation of about £50bn a year in discretionary council funding from a system weighted to reflect deprivation – which tended to push more money into inner cities – to one based on population numbers. According to Jessica Studdert, the deputy chief executive of New Local, a thinktank, this has been happening since 2010. Another alteration to how funding is allocated came in changes to Treasury guidance to other government departments, known as the Green Book, while Sunak was chancellor. A review found too much emphasis was being placed on cost-benefit analysis with insufficient weight given to whether the proposed project addressed strategic policy priorities. According to Prof Tony Travers, at the London School of Economics, this meant investment was more probable in inner-city areas where the benefit in cash terms was more easily realised. Now as Sunak and his chancellor, Jeremy Hunt, prepare to launch a new wave of austerity, his government’s allocation of ever scarcer resources will come under growing scrutiny. Only last week the Institute for Fiscal Studies warned: “Funding systems for schools, councils, public health and the police are ‘not fit for purpose’, do not properly reflect differences in needs, are not set up to tackle inequalities and in some instances actively work against the ‘levelling up’ agenda.” Sunak’s political instincts to keep money flowing to Tory heartlands such as Tunbridge Wells may mean that agenda continues in name only.