Levelling Up Fund Round 2: frequently asked questions

Frequently asked questions on the Levelling Up Fund Round 2.

Round 2 application process

When does the application window open and what is the closing date?

The application portal for the second round of the Fund will open on Tuesday 31 May 2022. Eligible local authorities must submit their bid and all relevant pro-formas through the portal by 12 noon on Wednesday 6 July 2022. It is expected that decisions will be made for this funding round by autumn 2022.

How can places apply for this funding round?

A link to the application form will be made available when the application portal opens on Tuesday 31 May 2022. Prior to that date, the published application guidance contains questions that will be asked in the LUF Round 2 application form. Before applying, applicants should also familiarise themselves with the prospectus and the technical note.

Capacity funding: can you provide more details on when it will be paid out, what it can and can’t be used for and the time period it is meant to cover.

We are aiming to make a single payment of £125k by the end of May to those places who are now eligible to receive capacity funding, and have not previously received capacity funding relating to the Levelling Up Fund. The capacity funding will be made available as a non-ringfenced RDEL payment made through Section 50 of UK Internal Markets Act. Places are expected to use that to develop high-quality bids to the Fund. The one-off payment will cover the life of the Fund.

All authorities in Scotland, Wales and Northern Ireland received capacity funding as part of the first round of the Fund, so will not receive further capacity funding in round 2, even if they have now moved to be a Category 1 place in the Index of Priority Places.

Bid questions

What type of funding is eligible to be a local financial contribution representing at least 10% of total bid costs?

As set out in Table 1 of the technical note, we encourage a minimum contribution of 10% which can come from a local authority or other third party (public or private sector). This funding cannot be “in kind”. Any contribution made must be in the form of an actual financial contribution. A contribution is expected from private sector stakeholders, such as developers, if they stand to benefit from a specific bid.

Can we bid for a project to add onto an existing programme/project?

Yes, providing it meets the gateway and eligibility criteria. It will be important that the application demonstrates additional value from the existing programme/project. All applications will be judged according to the published criteria.

Are you still eligible to bid for funding for a project you have already received government funding for?

Yes, however bidders will need to clearly demonstrate the additional value that further investment will bring. This will be required throughout the different sections of the application, for instance as part of the strategic fit assessment we ask that bidders set out very clearly the case why government investment is needed. All applications will be judged on their individual merits according to the published criteria.

Site acquisition is stated as being an eligible cost for this fund. Where such a proposal is put forward, would the applicant have to show that they had approved plans/planning permission in place for the future redevelopment and use of the site?

The case for investment and management case of the application will need to demonstrate the strategic fit and deliverability of the proposal. Table 1 of the technical note sets out the types of areas that we would expect to see covered.

Package bids: What can be submitted as part of a package bid, can projects be divided into sub-projects and what is meant by “a coherent set of interventions”?

Package bids can include 2 or 3 projects. The maximum number of projects within a package bid is 3.

Package bids can include a mix of projects from the Fund’s 3 investment themes but should not include multiple unrelated investments.

Projects within a package bid should support common objectives and be mutually supportive so that the package delivers greater benefits than the individual projects would achieve in isolation, in this way demonstrating a coherent set of interventions. For example, a transport intervention and public realm regeneration project in a local high street, may together support greater footfall than the projects on their own.

Package bids must clearly explain how their component elements are aligned with each other and represent a coherent set of interventions. Package bids can be concentrated in a specific location or cover a wider area.

How has my remaining bid allowance been calculated?

Section 2 of the technical note sets out how bid allocations for the second round have been calculated for local authorities in England, Wales and Northern Ireland

Constituencies have been used to allocate the number of bids local authorities can make. Does this mean only one bid can be made in each constituency?

No, eligible local authorities are able to submit multiple bids in a single constituency area, providing they have sufficient remaining bids as per Annex F of the updated technical note. However, as set out in the prospectus, we expect applicants submitting bids to consider how to spread their proposed interventions fairly and equitably within the authority boundary and across their full range of constituencies, targeting pockets of deprivation as appropriate.

If we submitted a large culture project in round 2 which was unsuccessful, would you be open to reconsidering that bid as a smaller culture project and, if successful, funding it in round 2?

Each bid is considered on its own merits and there is no opportunity to resubmit a scaled-down version of a bid or otherwise amend it once the deadline has passed. As such, large culture bids will be assessed at the funding amount requested. There will not be a provision for any large culture bids which are unsuccessful to be amended and reconsidered as a regular culture bid.

Will a large culture bid count towards our remaining ‘constituency balance’ bid allocation?

Yes, a large culture bid would be counted towards a local authorities remaining constituency allowance.

If, as a lead authority in category 2 or 3, you submit a joint bid with one or more local authorities in category 1 – does that mean your bid is now assessed as a category 1 bid?

As the updated LUF technical note sets out, when assessing joint bids against the characteristics of place criterion we will reflect the index category that relates to the location of where the majority of the project or projects are being delivered in terms of spend.

Are you able to provide us with further details on the weighting to be assigned to the 4 criteria?

As outlined in the updated technical note, at the assessment and shortlisting stage, the 4 criteria – characteristics of place, strategic fit, deliverability and economic case, or strategic fit, deliverability and economic case in Northern Ireland – will carry equal weighting. Explanation of the weighting of the sub-criteria is available in the Table 1 of the technical note.

Funding use

If eligible expenditure is incurred to progress plans between the start of the financial year and the announcement of successful applications to LUF round 2, can this be accounted towards the spend profile for the 22/23 financial year for successful projects?

We will accept eligible expenditure incurred from the start of the 2022/23 financial year in the spend profile of successful projects. However, this will be conducted at the applicant’s own risk, government will not cover incurred costs should an application be unsuccessful in bidding for funding.

Can an award from the Levelling Up Fund be used as match funding for other central government funding streams?

For separate government funding streams, applicants are advised to check the individual application requirements for the specific fund.

When will funding from the Levelling Up Fund need to be spent by?

We would expect all funding provided from the Fund to be spent by 31 March 2025, and, exceptionally, into 2025-26 for larger schemes.

Bid assessment

Is the minimum VfM pass mark confirmed?

To be considered for funding, applicants will need to demonstrate that the monetised and non-monetised benefits that the proposal is expected to generate will at least be equal to the costs of the proposal.

How will the economic case for bids be assessed?

The Economic Case section in Table 1 of the updated technical note provides details on what will be assessed under this criteria. Annex C of the technical note then provides further guidance on the assessment of requirements for Value for Money assessment.

How should wider and non-monetised benefits not included in the BCR be accounted in the Economic Case assessment?

The Economic Case assessment should, where appropriate, identify non-monetised benefits and benefits that are not included in the BCR. These should be identified and included as part of the sub-criteria ‘value for money of proposal’.

For large bids of over £20m in grant value, what additional information do you require?

No additional information is required in your bid for a large transport or culture schemes of over £20m in grant value and a maximum of £50m. Applications for large bids should be submitted via the online application portal in the same way as other bids are submitted. For all successful large bids the Department for Transport or Department for Levelling Up, Housing and Communities will require a more detailed business case to be submitted and approved prior to funding being released.

Is there any further information on requirements for successful large bids?

For successful large transport projects, the business case should be in a transport business case format and be compliant with the Green Book’s 5 case model and the Department for Transport’s guidance on transport analysis (TAG). To assist successful applicants in preparing for this, a checklist for large transport bids has been prepared and will be available shortly. For successful large culture bids, these will also need to be compliant with the Green Book’s 5 case model and any further information requirements will be published in due course.

Northern Ireland

Who is eligible to bid into LUF in Northern Ireland?

As set out in the LUF technical note, we have confirmed that in Northern Ireland, given the different local government landscape, we will accept bids from a range of local applicants, including but not limited to businesses, universities, voluntary and community sector organisations, and local councils.

Northern Ireland Executive (NIE) departments and their Arms Length Bodies (ALBs) are eligible to bid under the transport theme only. This exception has been made in recognition that NIE departments, (particularly the Department for Infrastructure) have the levers and typically deliver transport projects of the size envisaged by this Fund.

NIE Departments and their ALBs are not eligible to bid for projects under the culture and regeneration themes, where the lead applicant should operate at a more local level.

How will local areas with the highest level of need be identified and have funding targeted towards them to address existing regional disparities and imbalances given that Northern Ireland is not part of the index?

As with the first round, bids to the second round of the Levelling Up Fund from Northern Ireland will only be assessed against Strategic Fit, Economic Case and Deliverability. As part of the strategic fit assessment, Northern Ireland applicants will be expected to provide evidence of the specific local challenges and barriers to growth that exist.

Are there restrictions on the number of successful bids an eligible applicant in Northern Ireland can submit in the second round of the Fund?

No. Applicants in Northern Ireland are encouraged to prioritise bids by submitting those that applicants believe will have the highest impact.

Will the NIPPP (NI Public Procurement Policy) or PCR be applicable to any procurement in Northern Ireland?

The Round 1 and 2 technical notes request an appropriate rationale for procurement strategies. Projects in Northern Ireland do not have to follow PCR2015, but may follow the NI Public Procurement Policy – as long as they can demonstrate the project governance is adhering to those rules.

Published 13 May 2022