Levelling Up Fund Round 3

In January 2023, Secretary of State Michael Gove revealed a third round of bidding, expected after the budget in March 2023. Rounds 1 and 2 had short bidding windows. From announcement of the Levelling Up Fund (LUF) Round 2 to the original submission deadline was 10 weeks, although this was later extended because of technical issues. Local authorities need to be working up bids now, ready for the announcement of Round 3.

Insight Author

Gareth Jones


What are your chances of a successful Levelling Up Fund bid?

In Levelling Up Fund Round 1, 34% of bids were successful. They were awarded a total of £1.7 billion at an average of £16 million each. In Round 2, only 21% were successful, and they were awarded £2.1 billion, an average of £19 million each. With around £1 billion of the £4.8 billion total fund remaining for Round 3, there could be around 50 to 60 successful bids if average project sizes remain the same.

Local authority areas have been categorised as priority 1, 2, or 3, based on a range of factors. Our analysis shows that, so far, 98 local authorities in Categories 1 and 2 have not yet been awarded funds (but not all of these have bid). Only eight of 107 Category 3 local authorities have been awarded Levelling Up Funds so far.

Number of local authorities successful in LUF rounds 1 and 2

Areas previously awarded funding are unlikely to be eligible for further support. Category 1 and 2 areas are most likely to receive funding. So, there are now improved chances of success if a strong submission can be prepared.

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What are the assessment criteria for a Levelling Up Fund bid?

Whilst Round 3 guidance is yet to be published, Round 2 bids were assessed on four criteria: characteristics of place; deliverability; strategic fit; and the economic case. The guidance stated that these were given equal weight.

However, there have been press reports that DLUHC has been banned from signing off any new capital expenditure without HM Treasury approval, due to concerns about delivering value-for-money (see articles in the Financial Times and Guardian in February 2023). This will inevitably mean greater scrutiny of both the strategic and economic cases within the next round of bids for LUF from a HM Treasury perspective.

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