Can Rishi Sunak’s towns fund arrest decades of decline?

Standing on a wobbly flagstone in the pedestrianised centre of the English seaside town of Hastings, the deputy leader of the town’s council cannot hide her frustration.

“Imagine if you were an old person? It’s a total trip risk,” said Labour councillor Maya Evans, pointing at several uneven paving stones and small potholes that have become symptomatic of the decaying fabric of Britain’s towns.

Crumbling provincial high streets, alongside boarded up shops and antisocial behaviour, are the target of the government’s new Long-Term Plan for Towns. Announced by Prime Minister Rishi Sunak this month, it aims to give 55 towns an “endowment” of £20mn over 10 years.

The fund is the latest policy solution to arrest decades of decline in UK towns, where the Conservative vote tends to be stronger but which often suffer from low employment growth and high levels of social deprivation.

Hastings, one of the 55 areas picked for investment, has already been promised £24mn from the government’s first £3.6bn towns fund announced in 2021, but continues to battle a growing list of social and economic challenges.

Announcing the new “long-term towns fund” ahead of the Conservative party conference, Sunak said £1.1bn would be distributed by town boards of community leaders — rather than directly by councils — in order to bring “profound” change to the way support was delivered.

“You have to remember that far more people live in towns than live in cities that often get a lot of attention,” Sunak said at the time. “I wanted to correct that, and make sure people living in our towns everywhere know they have got the backing of this government.”

The latest fund has been inspired by research by the centre-right think-tank Onward, which studied the challenges facing five struggling towns over an extended period. 

Onward deputy director Adam Hawksbee said the government’s approach was “a rare example of regeneration policy done right” and that their research pointed to the need for long-term funding to be “devolved to the lowest possible level”.

“Twenty million pounds might not sound like a lot to Whitehall, but over 10 years, it provides the sort of local capacity that left behind places are sorely lacking,” he added.

However, other regional development experts have warned that the new fund will struggle to make a significant difference given the impact of a decade of austerity following the 2008 financial crisis. 

Tony Travers, a professor at the London School of Economics’ department of government, said the scheme confronted “serious challenges”. For a town such as Wrexham in north Wales, the £2mn endowment was equivalent to £1 in every £2,000 of the local economy, he noted.  

He added that the impact would be similarly small in towns such as Hastings, Chesterfield and Knowsley — among the 55 targeted by the fund — and warned that the “temporary prettification” would not fix underlying problems.

Travers said the new fund marked a departure from previous strategies, like the Cities Growth Commission, which focused on creating city region — or “metro” — centres as drivers of economic growth.

Chaired by Lord Jim O’Neill during the government of David Cameron, the commission also produced the Northern Powerhouse initiative, which aimed to boost underperforming northern cities. 

“That was the polar opposite of the ‘towns’ approach. It focused on rebuilding the downtown areas and letting the wealth spread outwards from there,” Travers added.

Evans, head of regeneration for Hastings, recognised that the town was “genuinely grateful” for the latest investment, but said she was also aware that local challenges go deeper than fixing flagstones.

Like all UK councils, Hastings has suffered from a decade of central government budget cuts with the local authority’s annual budget shrinking by nearly a third, from £22.9mn in 2010 to £16.5mn in the last financial year. 

The new long-term towns fund intends to tackle antisocial behaviour, but the problem has been driven in part by a decade of cuts to youth workers and centres.

Those challenges were visible in Evans’ ward of Hollington, three miles from the town centre, where half the children’s playground is fenced off awaiting repair and the youth centre, which used to be open daily after school, is now only open a few evenings a week.

“There’s an entire recording studio in there,” she said, gesturing at a locked building which houses a music facility that was opened in 2011 by the punk rocker Feargal Sharkey, “but it’s never open now because we just don’t have the budgets to staff it”. 

“There’s a lot of kids hanging around bored,” added a passing resident, 49-year-old John, who has lived on the estate for 20 years. “They get up to stuff, dealing drugs and setting bin fires.” 

Other local budget demands have risen as staff numbers have fallen, with nearly 1,000 people in expensive temporary accommodation, just as the fallout from the cost of living crisis has increased pressure on public services.

Tracy Dighton, chief executive at the 1066 Citizens Advice bureau, said it would take time to feel the benefits of the new fund, with investment not arriving until 2024 and delivery a year or two after. 

“If you’re a mum with a three-year-old in need of a home, matching benefits to inflation is far more important — though, like the council, we’re glad for any new funding,” she added.

Still, at a time when the public finances are highly constrained, the thinking behind the scheme reflects a belief in the importance of hyperlocal democracy, which is passionately shared by some of Sunak’s closest advisers, including his deputy chief of staff Will Tanner, former director of Onward.

Hawksbee noted the latest fund was being targeted below local authority level to individual towns, in order to build capacity in the community. Places that have successfully regenerated “almost always have bodies that are not reliant on the council for their existence”, he said. 

He added that a towns strategy did not have to run counter to a cities one, noting that levelling up secretary Michael Gove has also talked about the need to increase the density of urban centres. “But if you only do agglomeration,” he said, towns can be left without the capacity “to take advantage of the new opportunities or absorb any of the investment.”

Andrew Carter, chief executive of the Centre for Cities think-tank, agreed that the fate of towns and cities are inextricably linked. 

But he said the latest government rhetoric has been based on an adversarial “towns versus cities” approach, distracting from the deeper-seated challenges of narrowing the UK’s economic divides.

An economic analysis of the eight largest cities outside London published by the think-tank last month showed that wealth did “trickle out” from cities to surrounding towns and villages, but that towns that were attractive to higher-skilled workers benefited the most.

However, it found that “interventions to improve their quality of life ‘offer’” — from better schools, housing and transport links, as well as more cosmetic improvements — were key to fundamentally transforming the fates of towns.

“My concern with this scheme is that there’s no discernible theory of change that I can see lying behind it. It’s social policy masquerading as economic policy,” he added.