Dundee City Council Calls for Clarity on £20m Levelling Up Funding and Shared Prosperity Fund

Dundee City Council leader, Councillor Mark Flynn, has written to the UK Government seeking urgent clarification on the status of £20 million in Levelling Up funding, the allocation of the UK Shared Prosperity Fund (UKSPF) for 2025/26, and support for rising National Insurance contributions.

These concerns come amid growing uncertainty around the UK Government’s financial commitments to local authorities. With multiple funding streams in question and deadlines looming, Cllr Flynn is calling for transparency and flexibility to ensure vital community projects, employability schemes, and business support programmes in Dundee are not left in limbo.

The £20 million Levelling Up allocation was initially promised to Dundee following a visit from the then-Levelling Up Minister Jacob Young. The funds were meant to support a range of community and infrastructure projects across the city, with a deadline for use set at March 2026.

However, following the UK Government’s latest Budget and shifts in political leadership, the status of this funding has become less clear. In his letter, Cllr Flynn asked for confirmation that:

• The full £20 million allocation will still be provided.

• There will be flexibility in spending deadlines, allowing for funding use beyond March 2026 if required.

• Alternative projects can be considered if business cases for some original projects are not approved.

This request for flexibility is significant, as strict deadlines often force councils to “spend quickly rather than wisely”, leading to rushed projects that fail to deliver long-term benefits. Given the complexity of large-scale infrastructure projects, delays are common. Without the option to extend spending deadlines, Dundee City Council may be forced to make difficult choices about which projects to prioritise and which to scrap.

The UK Shared Prosperity Fund (UKSPF) was introduced as a replacement for EU structural funding following Brexit. For local authorities like Dundee, it has become a key source of funding for community development, employability, and business support initiatives.

The UK Government recently announced an extension of the UKSPF for a fourth year (2025/26). While this should be good news, there’s a catch: councils have not yet received any confirmation of their allocation for 2025/26.

This delay is a major issue for local authorities, as it creates uncertainty for the staff, organisations, and clients who depend on this funding. Contracts for workers in community programmes and business support schemes typically run for fixed terms. Without assurances that funds will continue, local authorities cannot extend these contracts, potentially forcing early redundancies or the closure of crucial services.

Cllr Flynn highlighted this in his statement, saying:

“Making the allocations public as soon as possible will enable local authorities to provide immediate assurances to both staff working on UKSPF projects and their clients, such as employability services and business support programmes, that their contracts or support will be extended into the next financial year.”

The absence of timely information from the UK Government is leaving local authorities in a state of limbo, unable to plan effectively. This creates instability for community services that many vulnerable groups rely on, especially those linked to employability and business support programmes.

Another pressing issue raised by Cllr Flynn relates to the increase in National Insurance contributions. While employers across the UK, including councils, are expected to pay higher National Insurance rates, the UK Government has provided no clear commitment that local authorities will receive compensation for these additional costs.

This increase in contributions is part of a broader effort to fund social care and the NHS. However, local councils argue that the additional financial burden could force them to cut frontline services to balance their budgets.

Cllr Flynn is demanding clarity on whether local government and its partners, including the Voluntary/Third Sector and Cultural Agencies, will receive full support for these additional costs. Without this support, councils may be forced to reduce funding for:

• Charities and community groups that rely on council grants.

• Cultural agencies and the arts sector, which is already under significant financial pressure.

• Public services, including those directly related to community wellbeing and employability.

This issue has sparked broader criticism from councils across Scotland and the wider UK, who argue that government funding decisions are being pushed onto local authorities. If support isn’t provided for the increase in National Insurance contributions, it will further strain council budgets that are already stretched to the limit.

The uncertainty around the Levelling Up Fund, UKSPF, and National Insurance contributions is not just a bureaucratic issue, it’s a real threat to community services, employment support, and cultural programmes in Dundee. If clarity is not provided soon, here’s what could happen:

• Projects could be delayed or cancelled: If the £20m Levelling Up funding is not fully allocated or if its use is constrained by the 2026 deadline, large-scale community projects may be at risk.

• Job losses in employability services: Without confirmation of UKSPF allocations, Dundee City Council may be forced to end contracts for employability support workers earlier than planned. This would leave unemployed residents with fewer pathways to work.

• Budget cuts to community programmes: Rising National Insurance contributions will increase the costs for cultural agencies, charities, and other third-sector groups. If the UK Government does not provide local authorities with support for this, councils will have to cut funding to key community projects to cover the shortfall.

These risks are not hypothetical. Councils across Scotland have already faced tough decisions about service cuts due to rising costs and uncertainty over central government support.

Cllr Flynn’s letter is a clear call for action. His demands for clarity on Levelling Up funds, UKSPF, and National Insurance are not unreasonable. Local authorities cannot operate in a vacuum. They need clear, timely information to manage their finances, plan for the future, and keep community services running.

The lack of transparency from the UK Government is more than an inconvenience, it's a threat to community well-being and local economic development. If the government fails to provide clear answers, the people of Dundee may be the ones who suffer, as community programmes face closure, jobs are lost, and public services are reduced.

It is crucial for the UK Government to communicate clearly and consistently with local authorities. The sooner councils know their funding allocations and support entitlements, the better they can plan for the future. This ensures that services remain stable and that Dundee’s residents don’t face unnecessary disruption.

With deadlines approaching and budgets hanging in the balance, it’s time for the UK Government to end the guessing game and provide the clarity that Dundee, and every local authority, desperately needs.