Businesses and council leaders have hit out after a town missed out on a share of a multi-billion pound government fund to help its regeneration.

Gravesham council leader John Burden said the move to leave Gravesham out of the Levelling Up fund is a "blow" and he struggles to understand the decision.

Cllr Burden (Lab) added the "much needed future regeneration" of Gravesend town centre was now at risk.

"I am at a loss to understand the government’s thinking here," he explained. "Especially when I look at the other areas of Kent that have been successful and the fact that for both funding rounds Gravesham was identified as a priority one area for Levelling Up, and yet here we are with nothing to show for it.

"When our first bid was unsuccessful, we were told we had missed out by the narrowest of margins."

He added: "Huge amounts of work went into our second bid, and we had the support of significant bodies such as the South East Local Enterprise Partnership, Kent County Council, Kent and Medway Economic Partnership, the Thames Estuary Growth Board, and Kent Invicta Chamber of Commerce.

"Many local businesses wrote in support, and we had cross-party support within the council.

"They could all see the value of our bid and the desperate need for significant investment in Gravesend town centre."

The council made a second bid for £20 million from the Levelling Up Fund – a project which aims to boost more deprived areas across the country – to fund the development of St George's Square.

The money would have been used to create a new community, retail and leisure spaces, a new Civic Centre, new theatre and new homes.

Cllr Burden added the decision is even more difficult to understand when the demographics of Pelham ward – where the development is earmarked for – were taken into consideration.

He added: "If the Levelling Up Fund is aimed at raising the standards of living of some of the most deprived areas of the country, then our bid meets that aim.

"Gravesend town centre has an unemployment rate of around 7% compared to the national rate of 4.5%; around 25% of adults living in the ward have no qualifications; childhood obesity stands at 26% against a national average of 20%; and 16.5% of children are from low-income families, compared to the national average of 15.6%.

"Added to that we have more than 1,000 households on our housing register and historically high numbers of families in temporary accommodation; there is a desperate need for quality new homes in the town centre.

"There are some very searching questions to be answered by government as to why our bid was unsuccessful.

"We remain committed to the St George’s Square development as we know the economic and social benefits it will bring are vital for the town’s future.

"But we now have to go away and try to plan how we are going to tackle the huge social inequalities in the borough without support from the Levelling Up Fund."

Businesses in the town also reacted to the news with disappointment.

Owner of The Panic Room in Gravesend, Alex Souter said: "We have been really wanting to invest ourselves and push our business into Gravesham so it is disappointing the government has not seen the same potential of the area.

"It would have been nice to have seen the government believing a bit more in our town and having faith we can deliver something great for its residents.

"It is a town with a lot of potential and it is disappointing they have not seen that.

"The good thing is there are a lot of really dedicated local businesses here who do."

The areas receiving a share of the pot were announced last night with projects across Dover, Sheerness, Canterbury and Folkestone being given a major cash injection.

A total of 10 projects in the South East have been allocated a cash boost, six of which are in Kent.

Prime Minister Rishi Sunak said: "Through greater investment in local areas, we can grow the economy, create good jobs and spread opportunity everywhere.

"That is why we are backing a number of projects with new transformational funding to level up local communities in the South East.

"By reaching even more parts of the country than before, we will build a future of optimism and pride in people’s lives and the places they call home."

It has been confirmed that there will be another round of the Levelling Up fund in the future.

Adam Holloway MP for Gravesham was approached for comment.