The government is “gambling” with hundreds of millions of pounds of taxpayers’ money through the chaotic administration of its flagship Levelling Up Fund, MPs have warned.
A committee of MPs has delivered a scathing report on the government’s levelling up funding, saying money is being wasted on “policies and programmes that are little more than a slogan”.
The report, by the cross-party public accounts committee, also questions the efficacy of the £11bn “alphabet soup” of levelling up funding pots, adding that the level of transparency was “unsatisfactory”.
Committee chair Dame Meg Hillier said: “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 committee, which is mostly made up of Conservative MPs, pointed out that ministers finalised the principles for awarding the first round of £1.7bn of levelling up funds only once they knew the identities and scores of shortlisted bidders. The report added: “DLUHC has past form with this” – a reference to the highly controversial allocation of the 2019 Towns Fund, which appeared to reward Conservative-run councils and election targets.
It added that while monitoring of the impact of funding had improved – a low bar, as the government said in 2019 that it “did not know” the impact of its £12bn Local Growth Fund – the committee concluded that “accountability for levelling up outcomes remains unsatisfactory”.
Among other concerns raised in the scathing report was the possibility that “optimism bias” had led to realistic bids to the Levelling Up Fund missing out, at the expense of supposedly “shovel-ready” projects that have since been beset with delays.
It also stated that local authorities were struggling to keep up with an ever-changing funding landscape and multiple funding pots.
“Despite billions spent on local growth policies over many years, the government still does not have a strong understanding of what works,” the report stated. “Local authorities have faced a confusion of different funding pots and have had to respond piecemeal to each new announcement over the years.”
In 2021-22 alone, the National Audit Office’s report identified 10 live funds, but DLUHC said that only a small number of those still had future money to be allocated. It is now attempting to slim that down to two significant funds: the UK Shared Prosperity Fund, awarded by formula; and the Levelling Up Fund, awarded through competition.
In the 2020 spending review, £600m of levelling up funds were announced as available for 2021-22. However, barely £100m has been allocated.
Hillier said that the committee had “reported too often” on the “problems the government has with delivery of its major projects, programmes and promises”.
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