Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 7
7
Accepted in Part
Paragraph: 27
Simplify Levelling Up funding streams, reduce competitive pots, and provide adequate core funding.
Recommendation
The Government must follow through on its commitment to simplify funding streams and reduce requirements to access competitive pots. The DLUHC must also seek to reduce the number of competitive funding pots. By reducing the number of such pots, by simplifying the funding landscape, and by making the process more accessible, the DLUHC can avoid unnecessary waste of both local and central Government resources. This would address some of the concerns regarding the resource intensive process surrounding competitive bidding. The Government must seek to ensure that those local authorities which need additional resources are supported through adequate essential core funding streams and supported in their applications. Competitive bids for additional funding should in no way be a replacement for the funding that local authorities have historically received and should continue to be allocated. In order to ensure competitive bidding does encourage collaboration and innovation, and is a worthwhile exercise, future competitive funds must be for unique ventures and the amount of funding available must be substantial.
Government Response Summary
The government highlights its published plan for simplifying the funding landscape and its commitment to launch a Funding Simplification Doctrine in 2024, which will guide departments on funding methodologies, including allocative approaches where suitable. It points to the UKSPF as an example of formula-based allocation rather than competition.
Paragraph Reference:
27
Government Response
Accepted in Part
HM Government
Accepted in Part
The Government’s plan for simplifying the funding landscape for local authorities, published on 4 July 2023, sets out a series of concrete steps Government is taking to increase the impact and lessen the administrative burden of funding, supporting local authorities to maximise their return on spending. Government recognises the contribution of competitions in driving value for money and identifying the best projects for certain programmes. We will continue to deploy competitions where they make sense, but we will also encourage use of allocative approaches where they can best achieve specific outcomes while minimising demands on local authorities. The simplification plan commits to launching a Funding Simplification Doctrine in 2024. This new doctrine will require any department developing a local authority fund to assess what type of distribution methodology will be most suitable for delivering their funding objectives. Where a competition does take place, there will need to be a clear rationale for why it delivers value for money. The simplification plan also covers: • A new Simplification Pathfinder Pilot to test the streamlined delivery of capital funding in a small group of local authorities. • DLUHC work to streamline monitoring and evaluation requirements. This includes centralising guidance into one place on gov.uk, strengthening DLUHC-led evaluations to reduce requirements on local places, and rationalising monitoring data requests. • Reforms to be implemented at the next Spending Review, including single departmental-style funding settlements for Greater Manchester Combined Authority (GMCA) and West Midlands Combined Authority (WMCA) to give trailblazer MCAs the autonomy to deliver for their areas. Alongside this, we are looking at how we support local authorities to take a proportionate and consistent approach to subsidy control considerations. The UKSPF is another central pillar of the Government’s ambitious Levelling Up agenda, and a significant component of its support for places across the UK. Launched in April 2022 it provides £2.6 billion of new funding for local investment by March 2025, with all areas of the UK receiving an allocation from the Fund via a funding formula rather than a competition. As set out above, Local leaders have been empowered to shape the design of UKSPF investment plans with local stakeholders. The UKSPF forms part of a suite of complementary Levelling Up funding. Government has made over £10 billion available through the Levelling Up Fund, UKSPF, Towns Fund, Community Renewal Fund and Freeports to support local authorities and places with Levelling Up local areas. The UKSPF’s mix of revenue and capital funding can be used locally to support a wide range of interventions to build pride in place and improve life chances. These can complement larger-scale Levelling Up Fund capital projects, strategic Freeport investments as well as existing employment and skills provision.