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MPs sharply criticise Government approach to awarding Levelling Up funds

The Department for Levelling Up, Housing and Communities finalised the principles for awarding the first round of £1.7bn of Levelling Up funds only once ministers knew the identities and scores of shortlisted bidders, the Public Accounts Committee has said in a scathing report.

It said the DLUHC had “past form” in using this approach, citing criticism made by the committee in November 2020 that the selection process for awarding the Towns Fund had “not been impartial”.

The committee said it remained concerned over the timing of ministerial input for funding awards, and also that realistic bids to the Levelling Up Fund have missed out at the expense of projects claiming to be ‘shovel-ready’ but that have since been beset with delays.

It said Government had spent billions of pounds on various local growth policies over many years without “a strong understanding of what works” or how to measure performance across different geographical areas and timescales.

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Dame Meg Hillier, the PAC’s Labour chair, said: “The PAC has reported too often on the problems the government has with delivery of its major projects, programmes and promises.

“Without clear parameters, plans or measures of success it’s hard to avoid the appearance that government is just gambling taxpayers money on policies and programmes that are little more than a slogan, retrofitting the criteria for success and not even bothering to evaluate if it worked.” 

The report said it had been unsatisfactory that ministers finalised principles for awarding the first round of the Levelling Up Fund only once they knew the identities and scores of shortlisted bidders.

Following an initial ‘pass/fail' gateway, officials scored and ranked bids against published criteria and passed a shortlist of the highest-scoring bids to ministers, who made final decisions after taking these scores into account.

This meant ministers decided on the principles for awarding funding only after they knew who, from the 170 shortlisted bidders, would win and who would not as a result of those principles.

“There is no transparency over the location and type of unsuccessful versus successful bids,” the committee said and called on the department in future determine principles for awarding funds before the identities of shortlisted bidders are disclosed to ministers   

The PAC was concerned by ‘optimism bias’ about how ‘shovel ready’ projects were, while other – more realistic – bidders missed out.

“Local authorities unused to presenting bids in this way, such as those in the devolved administrations, may have been at a particular disadvantage,” the report said.

Attempts by local authorities at long-term planning had been frustrated by the timing, co-ordination, and unpredictability of the ‘alphabet soup' of funding pots to support regeneration, the report noted.

“Unlike Whitehall departments, local authorities do not know what is coming next and have to dedicate time and resource to respond piecemeal to each new announcement, with no guarantee of success,” it said.

Kevin Bentley, the Conservative chair of the Local Government Association’s People and Places Board, said: “Turning levelling up from a political slogan to a reality will only be achieved if councils have the powers and funding they need to address regional inequality, tackle concentrations of deprivation and make towns and communities across England attractive places to live, work and visit.

“Competitive bidding for short-term, small pots of funding creates uncertainty and uses up vital resources in councils, which could be better spent on planning ahead for their communities.”

Cllr Bentley said timely, sustainable funding for levelling up, and a full rollout of UK Shared Prosperity Fund allocations, would help deliver local solutions.

A DLUHC spokesperson said: “The first round of the Levelling Up Fund is delivering vital investment to communities across the UK that have for too long been overlooked and undervalued. 

“The assessment process was transparent, robust and fair and the criteria included the need for projects to be deliverable and to fuel regeneration and growth to level up areas most in need.”

Unsuccessful bidders had been given feedback and are free to apply again.

Mark Smulian

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