Sir Keir Starmer is considering pumping tens of billions of pounds of extra funding for community projects into poorer areas where Labour is under threat from Reform.
Last year the prime minister announced £5 billion of funding in 146 areas in England over the next decade in a programme called Pride in Place. But senior figures in No 10 are concerned that the funding does not go far enough.
A report from the Independent Commission on Neighbourhoods (Icon), being considered by ministers and backed by influential Labour MPs, suggests a new funding pot of £50 billion for a “neighbourhood recovery fund” over 20 years to “throw the kitchen sink at disadvantaged areas”.
Government sources said that Starmer sees Pride in Place as one of the defining schemes of his premiership and it is likely to be a significant focus of the campaign for local elections in May.
Of the areas selected for funding already, 25 areas held local elections last year, with 23 of them won by Reform, one by the Greens and one by an independent.
The report suggests expanding the list of areas to 424 neighbourhoods. Just under two thirds of these neighbourhoods are in seats held by Labour, and in about half of cases Reform UK came second at the last general election.
Analysis by The Times of the last detailed constituency polling by YouGov shows that about three quarters of the proposed areas are in seats forecast to be won by Reform, compared with less than a quarter for Labour.
Nigel Farage’s Reform is leading in the polls in most of the areas targeted by the fund
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Under the current programme, the money is allocated in each neighbourhood by a board formed of respected local figures, but the local MP has veto power over its chair and significant influence over how the money is spent.
The boards have the power to buy up derelict pubs or shops and convert them into community-run assets.
Ministers want to make these community spaces a place where various parts of the state work together under one “umbrella” banner of Pride in Place, for example by having GPs, work coaches, basic skills training and community police in one building.
The Icon report recommends boosting funding for the areas from £20 million each over the next decade to more than £120 million. A further 70 neighbourhoods would be added from 2029, with 90 more added in 2032 and another 118 from 2035.
Chris Webb, the Labour MP for Blackpool South, said the programme would be a “decades-long effort, similar to how we rebuilt Britain after the Second World War”.
Chris Webb, the Labour MP for Blackpool South, backed the scheme
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The northwest would see the most communities benefit, followed by Yorkshire and the northeast. Just two London communities would receive the funding.
An announcement of extra funding could come alongside the spring statement delivered by Rachel Reeves, the chancellor, in March.
Icon said it had already identified issues with how Pride in Place was being implemented since its announcement in September. “We have found considerable variation of capacity within local government and within government departments,” the report says. “Some local councils have a clear vision and dedicated neighbourhood capacity. Many do not.
“Central government also lacks the knowledge of how to design programmes and guidance effectively because it has not undertaken a neighbourhood regeneration programme at scale for over a generation.”
Steve Yemm
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Steve Yemm, Labour MP for Mansfield, said: “Areas like mine have been overlooked for too long. We bore the brunt of de-industrialisation, which ripped the economic heart out of our communities, and then a reckless austerity experiment made things worse.
“The good news is that this government is delivering record levels of investment for the Midlands … This report is right to call on the government to build on these early achievements ahead of the next election.”
Sureena Brackenridge, Labour MP for Wolverhampton North East, said the report “sets out an ambitious but deliverable agenda for government”, while Lorraine Beavers, the Labour MP for Blackpool North & Fleetwood, said Pride in Place had to be “the first step towards a whole-of-government effort that rebuilds seats like mine”.
A government spokesman said it would “always look at other ways we can go even further” on top of the billions of funding announced last year.
“We’re committed to tackling decades of underinvestment and that’s exactly what Pride in Place delivers: the power, tools and funding for local people to revive their communities and shape their futures,” the spokesman added. “They know their areas best and we’re backing them to deliver the changes they want to see.”
A government source said they had “ensured fairness by targeting the places most in need using deprivation and community need measures, using a robust metric”.