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We explore mechanisms for allocation and delivery. We aim to provide actionable lessons for policy reform to improve funding allocation mechanisms, thereby positively impacting policy, people, and places. Our analysis emphasises how the complex nature of the funding landscape. Key findings include that:

• A very limited number of funds studied are specifically geographically targeted with a high proportion of funds allocated to administrative geographic areas. However, where funding has been available to particular kinds of administrative areas, there might still be an implicit/’de facto’ targeting of geographic inequality in the spread of funding to certain administrative areas across urban and rural areas in England.
• Whilst the majority of the funds analysed focus on reducing geographical inequalities, only a quarter of the funding provided is targeted at addressing spatial inequalities. Rather almost three quarters of the total funding considered is focused on achieving aims that are not geographically specific.
• The majority of funds analysed involved competitive processes for allocation, although formula funding made up the greatest proportion of total funding awarded.
• Recent years have seen the introduction of multiple, often short-term funding streams.
• More than half of the funding programmes analysed had as one of their aims to reduce geographic inequalities or support disadvantaged regions. This would appear to be positive in terms of the potential to address geographical inequalities. However, this only represents 25% of the total funding analysed.

The report makes ten recommendations. These include:

1. Better aligning funding levels for initiatives aimed at addressing regional inequalities with the ambitious goals outlined in policy to ensure meaningful impact on geographical disparities.
2. Increasing targeted funding specifically directed towards the country’s most disadvantaged or ‘left behind’ areas.
3. Form a cross-sector working group including representatives from various government departments and regional experts with practical experience in managing diverse funding streams, to devise innovative approaches to funding allocation, management, and evaluation.
4. Streamline and reduce the number of funding streams accessible to local and combined authorities by consolidating them thematically (e.g., transport, skills, business support, health, crime). This effort should also explore private-sector funding models, including philanthropic contributions. While steps are being taken towards simplification (e.g., the Funding Simplification Doctrine), further acceleration across departments is needed to empower local prioritisation.
5. Develop a data observatory to establish standardised datasets to support funding allocation. This includes creating a geographic and economic baseline to track progress.
6. Create a national Monitoring and Evaluation Institute along with a capacity-building programme to highlight effective practices, showcase successful initiatives, and facilitate peer-to-peer learning. This should involve leveraging the strengths of advanced institutions to bolster the development of regions / institutions with more limited capacity and experience.
7. Improve access to central and local government web resources related to previous funding calls to facilitate the identification of application criteria, analyse trends, and share good practices in funding allocation.
8. Assess and refine the approach used in the UK Shared Prosperity Fund prospectus for launching future funding streams, ensuring a stronger alignment between funding streams and economic policies. This would likely improve the quality of regional and local funding applications and enhance capacity outside London.
9. Increase flexibility for local and combined authorities to determine their capital and revenue funding allocations, both at the initial stages and during the implementation of funded programmes.
10. Foster a bottom-up approach to economic equality funding by empowering local communities to define their priorities and methods for addressing inequalities. This could involve supporting community development initiatives and strengthening the role of community-based institutions in governance and leadership.

Meet the Authors

Dr Abigail Taylor

Abigail is a Research Fellow at City-REDI with significant policy experience including secondments to the Industrial Strategy Council and the Smart Specialisation Hub.

She is passionate about leading and contributing to research and evaluation policy analysis that informs and influences regional and national growth policies, being qualified to practitioner level in Better Business Cases. She is skilled in writing for policy audiences including reports on , identifying international best practices, in developing and . The key outputs from the reports were discussed in webinar launches with Andy Haldane and Dame Kate Barker. She has also written a range of academic journal articles, book chapters blogs and articles examining current policy issues, including contributing to a report by the .

Dr Sanne Velthuis

Sanne is a Research Associate at the Centre for Urban and Regional Development Studies (CURDS), within the School of Geography, Politics and Sociology. Her main research interest centre around spatial inequalities at the regional, local and neighbourhood level, and the impact these have on individuals and households. She is additionally interested in the role of geographic mobility and immobility in shaping both individual outcomes and places.