Lisa Nandy has accused Rishi Sunak of using public money as a “bribe” after the Tory leadership hopeful told a group of party members that he had diverted money away from “deprived urban areas” into places like theirs during his time as Chancellor.
Speaking to Tory Party members at a leadership hustings in Tunbridge Wells, Kent last week, Sunak 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 the Labour Party that shoved all the funding into deprived urban areas. That needed to be undone. I started the work of undoing that.”
Reacting to a leaked video of the event published by the New Statesman today, the Shadow Levelling Up Secretary said: “This leadership race is revealing the Conservatives’ true colours.
“It’s scandalous that Rishi Sunak is openly boasting that he fixed the rules to funnel taxpayers’ money to prosperous Tory shires. This is public money. It should be distributed fairly and spent where it’s most needed – not used as a bribe to Tory members.”
Nandy has written to Levelling Up Secretary Greg Clark urging him to investigate the changes to funding formulas to which Sunak referred.
In the letter, Nandy stated: “This is deeply concerning. The former Chancellor is admitting to fixing the rules to funnel taxpayers’ money to affluent parts of the country at the expense of areas he himself admits are “deprived”.
“Public money should always be distributed fairly and spent in areas where it is most needed. It is completely unacceptable for ministers to allocate taxpayer funds in order to secure political gain for themselves or their party.”
She highlighted past criticism of the Department for Levelling Up, Housing and Communities (DLUHC) by the Commons public accounts committee. The committee concluded in November 2020 that the selection process for awarding the Towns Fund had “not been impartial”.
The committee declared in June that it was “unsatisfactory” that ministers finalised the principles for awarding the first round of levelling up funds only once they knew the identities of shortlisted bidders.
Nandy called on Clark to provide an update on the steps the Department has taken to fix the problems identified by the committee.
The Labour frontbencher stressed: “This is particularly important in light of the fact that the application process for the second round of levelling up funds closed just this week, and communities across the country are anxiously waiting to hear if they have been successful.
“Many of our most deprived communities – in urban, rural and coastal areas – missed out in the first round, and they must have absolute confidence that the process for awarding funds in this second round is fair, transparent and untainted by political bias.”
Following the release of the video, a source from Sunak’s leadership campaign said: “Levelling up isn’t just about city centres, it’s also about towns and rural areas all over the country that need help too. That’s what he changed in the green book and he will follow though as Prime Minister.”
“Travelling around the country, he’s seen non-metropolitan areas that need better bus services, faster broadband or high-quality schools. That’s what he’ll deliver as Prime Minister,” they added.
Labour previously accused the Tories of prioritising constituencies held by ministers over more deprived areas in the process for allocating the Levelling Up Fund. The opposition highlighted in March last year that Sunak’s constituency and those of four other cabinet members at that time had been prioritised to bid for the fund.
The local authority in the former Chancellor’s constituency of Richmondshire was placed in the highest priority category for the fund, ahead of areas such as Barnsley, Flintshire, Coventry, Plymouth, Salford and the Wirral, all of which were placed in the second tier priority group.
Below is the full text of the letter to Greg Clark:
Dear Secretary of State,
I am writing to you in light of comments made by the former Chancellor, Rishi Sunak MP, at a Conservative leadership hustings in Tunbridge Wells on 29 July. In a video published by the New Statesman, Mr Sunak boasts:
“I managed to start changing the funding formulas, to make sure areas like this are getting the funding they deserve because we inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.”
This is deeply concerning. The former Chancellor is admitting to fixing the rules to funnel taxpayers’ money to affluent parts of the country at the expense of areas he himself admits are “deprived”.
Public money should always be distributed fairly and spent in areas where it is most needed. It is completely unacceptable for ministers to allocate taxpayer funds in order to secure political gain for themselves or their party.
As the public accounts committee has said, your department “has past form with this”. In June, the committee said it was “unsatisfactory” that ministers finalised the principles for awarding the first round of levelling up funds only once they knew the identities of shortlisted bidders.
In November 2020, the committee reported that the selection process for awarding the Towns Fund had “not been impartial”, and they raised concerns about the lack of transparency over the towns selected and about the timing of ministerial input for funding awards.
This is particularly important in light of the fact that the application process for the second round of levelling up funds closed just this week, and communities across the country are anxiously waiting to hear if they have been successful.
Many of our most deprived communities – in urban, rural and coastal areas – missed out in the first round, and they must have absolute confidence that the process for awarding funds in this second round is fair, transparent and untainted by political bias.
I would therefore be grateful if you would:
- Urgently investigate the changes to funding formulas that Rishi Sunak is referring to in his comments on 29 July; why those changes were made; what justification was given for the changes; and what impact assessment was made in advance of the changes; and publish the findings of this investigation at the earliest opportunity.
- Provide an update on the steps the Department has taken to fix the problems identified by the public accounts committee as regards the fair allocation of taxpayer funds.
- Publish the measures that have been put in place to ensure the award of funds from the second round of the Levelling Up Fund is fair; and confirm that unlike in the first round, ministers have set the principles for awarding funds before they know the identities of bidders.
It is vital for public confidence in your Department and in the government more widely that the allocation of taxpayer funds is both fair and seen to be fair. These steps will help ensure that confidence can begin to be restored.
Yours sincerely,
Lisa Nandy MP
Shadow Secretary of State for Levelling Up, Housing and Communities