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What Starmer’s election means for Labour strongholds ‘left behind’ by Tories

Labour strongholds which claim to have been locked out of investment during 14 years without an MP in government say they are expecting to receive crucial funding under Sir Keir Starmer.

Politicians in Labour safe seats told i they believe a funding allocation system used by the Conservatives has unfairly punished their areas for years.

The Labour Prime Minister has indicated a return to a system based more closely on economic need, which was a priority under Tony Blair and is widely supported across the party, they said.

Dame Margaret Hodge, who was the Labour MP for Barking from 1983 to 2024, said a different approach to distributing money to different areas was one of the big changes she expects to see.

“The heart of one of the differences between Labour and Conservatives is that when we did our all our funding formulas formerly in government, we always looked at real need, however you measured it,” she told i.

In 2021, the Public Accounts Committee found education funding had been redistributed from richer to poorer areas, with funding cut by 1.2 per cent in the most deprived areas but increased by 2.9 per cent in the least deprived.

Dame Margaret said: “Schools funding has been dramatically altered to support Conservative areas. That’s outrageous and hopefully that will change.

“I also think it’s outrageous that politics can come into these issues. There ought to be much greater transparency about how formulas are established so the public understand the criteria you’re using, because we shouldn’t be using political criteria – we should be using much more objective criteria.

“The Tories have really, really shovelled all their money – whether it’s levelling up, or whether it’s health formula, or whether it’s housing formula, or whether it’s local government formula – they have shovelled all the money in the areas where they have political control. That’s absurd.”

Dame Margaret, who was a minister during most of the Blair and Gordon Brown years, said they were “constantly” looking at their formulas to make sure they were addressing need.

“That’s what we’re about: equalising life chances,” she said.

Dame Margaret, who stepped down at the last election, claimed the unfair distribution of funding is “one of the reasons inequality has grown so intensely over the last 14 years”.

During his 2022 bid for the Conservative leadership, Rishi Sunak admitted to taking money out of deprived urban areas to give it to areas such as Tunbridge Wells.

In footage obtained and published by the New Statesman, he said: “I managed to start changing the funding formulas to make sure that areas like this are getting the funding that they deserve.

“Because we inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas. That needed to be undone. I started the work of undoing that.”

Tunbridge Wells was long considered a Conservative safe seat and was held by the party from 1974 to 2024.

In January 2023, Mr Sunak was criticised for granting £19m of levelling up money to rejuvenate a high street in his wealthy constituency of Richmond in North Yorkshire.

The scheme was criticised for favouring the South of England over the North, with the South East receiving £210m compared with £120m for Yorkshire and the Humber.

No money was given to Stonehouse in Plymouth, a community in the bottom 0.2 per cent for economic activity, or to the cities of Birmingham, Nottingham and Stoke.

Alex Norris, Labour’s shadow communities minister at the time, accused the government of ignoring deprived areas in favour of areas in the top quartile economically.

Dame Margaret said a change in Government will make it easier for Labour strongholds to advocate for their priorities.

She said she had access to Tory ministers as a Labour MP but it is “inevitably easier” to lobby on behalf of an area “if you’re in the same political party”.

Clive Betts, Labour MP for Sheffield South East, said Labour safe seats, particularly in cities, could benefit from lower housebuilding targets.

He said having “fair targets” across the country “will mean taking these extra requirements to build in the cities away because it was just a Tory ruse to make up for the lack of pressure on the more rural areas”.

Mr Betts, a former chair of the Housing Select Committee and an MP since 1992, said the distribution of levelling-up funding was a “nonsense” under the Conservatives.

“It was a bidding process,” he told i. “There were some suspicions that areas where Tory MPs were worried about re-election got a bit more money.

“What I hope Labour will do now is to see mayors and local authorities as being the proper way to receive money, distribute it in a proper way according to need, and then let those areas get on with doing their own improvements and renovation schemes.”

The Conservatives publicly clashed with Labour mayors such as Andy Burnham and Sadiq Khan, but Mr Betts said he believed the shift in power could make it easier for the Westminster Government to give these areas more decision-making powers.

“Keir Starmer has always expressed his clear commitment to devolution,” he said.

‘We’re a deprived area – but got no levelling-up funding’

Barnsley is among deprived areas that have felt unfairly neglected by the Conservatives. The former mining town in South Yorkshire has a Labour-led council and is home to two Labour stronghold constituencies.

Sir Stephen Houghton, leader of Barnsley Council, said one of the town’s ex-mining constituencies, Barnsley East – now replaced with Barnsley South – did not receive any levelling-up funding during the last parliament and had its bid rejected last year.

The council was told Barnsley East “didn’t fit their criteria” but they “can’t find out how the allocations work” because the details were not disclosed.

“When we’ve tried to examine that, we simply can’t understand why,” he told i . “There is a view that the local MP was critical of the government and that’s why, but obviously that’s been denied. It’s one of the most deprived parts of the borough and the country, and they haven’t had a single penny. So how does that work?”

Barnsley was rejected for Levelling Up funding, while wealthier neighbours received more money (Photo by Historic England Archive/Heritage Images via Getty Images)
Barnsley was rejected for levelling-up funding, while wealthier neighbours received more money (Photo: Historic England Archive/Heritage Images via Getty Images)

Stephanie Peacock, the MP for Barnsley South and previously Barnsley East, was a shadow minister under Sir Keir up until the polls closed.

“She’s obviously furious that nothing came through on leveling up for her constituency and so are we,” he said.

Barnsley is unable to meet local needs through council tax, which is capped, so it depends heavily on central government grants for funding. Most of its properties are in Band A, the lowest council tax band, which means the council does not raise as much money as wealthier areas through taxation.

He said nearby constituencies that had Tory MPs, such as neighbouring Sheffield, as well as Doncaster and Rotherham, received levelling-up funding.

“All those constituencies are economically much stronger than Stephanie Peacock’s,” he said.

The council had been hoping to use the funds to invest in the Elsecar Heritage Centre, a historic village and tourist site, which would have paid for infrastructure improvements.

Barnsley Central, now Barnsley North after boundary changes, got £10m, but Mr Houghton said this was still a low figure compared with other areas. Barnsley East received some funding from the Towns Fund, which was the previous iteration of the Levelling-Up Fund.

Transport is administered for the wider area of South Yorkshire, which had a majority of Labour-held constituencies during the last parliament.

Barnsley East received less funding than wealthier Tory-held areas during the last Parliament
Barnsley East received less funding than wealthier Tory-held areas during the last parliament

“We got nothing out of one of the transport funding pots one year when others were getting tens of millions,” he said. “We got nothing in South Yorkshire, which was an astonishing position to take. We need to improve bus services, we need to improve rail services, all the transport infrastructure. That’s not just Barnsley – South Yorkshire as a whole is desperate for investment.”

Sir Stephen said Labour have said “they’ve got to change local government finance” – another funding area that has hurt communities like Barnsley.

“We’re lobbying hard to try and get a better deal and to make sure local government finance is based on need, not on economic growth,” he said. “That’s one area that obviously we’ll be talking to the Government about over the coming months ahead, as I suspect most councils will be.”

When Labour was previously in power, Mr Houghton said the Government would assess the area’s needs, look at how much money the council could raise locally to meet them, and give a grant accordingly to bridge the gap.

“The grant-based position has been reduced, and councils now get money on the basis of the economic growth that’s occurred in their area,” he said.

“Effectively it moves money from poorer places to ones where there’s economic success. It’s dividing local government and it’s dividing the country.

“Could you imagine a local hospital saying ‘we’re no longer going to do operations because we don’t have enough economic businesses in the area’? There’d be a national outcry. Yet that’s exactly the model we’re moving on in local government for keeping children safe and looking after older people.

“That’s ludicrous. It’s not only nonsense, it’s dangerous nonsense. But that’s the model that’s been developed over the last few years.”

For places like Barnsley, economic stagnation has been the outcome.

“If you’re not getting the money, you don’t get the growth, and if you don’t get the growth, you don’t get the funding for your services,” he said.

“It’s a vicious cycle the Conservatives created. We need to break out of that and hopefully Labour will break out of that.”

Election 2024

The general election campaign has finished and polling day has seen the Labour Party romp to an impressive win over Rishi Sunak‘s Tories.

Sir Keir Starmer and other party leaders have battled to win votes over six weeks, and i‘s election live blog covered every result as it happened. Tory big beasts from Penny Mordaunt to Grant Shapps saw big losses, while Jeremy Corbyn secured the win in Islington North.

Nigel Farage’s Reform UK also outdid expectations with four MPs elected.

But what happens next as Labour win? Follow the i‘s coverage of Starmer’s next moves as the new Prime Minister.

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