Recommendations & Conclusions
4 items
3
Recommendation
Fifth Report - Local economic growth
Accepted
We are concerned that optimism bias has meant realistic bids to the Levelling Up Fund have missed out at the expense of ‘shovel-ready’ projects that have since been beset with delays. The Department told us that, four weeks from year end, it had paid out around £100 million of the …
Read more
We are concerned that optimism bias has meant realistic bids to the Levelling Up Fund have missed out at the expense of ‘shovel-ready’ projects that have since been beset with delays. The Department told us that, four weeks from year end, it had paid out around £100 million of the “up to” £600 million it made available in 2021–22 for the first round of the Levelling Up Fund. Since deliverability was one of the criteria for the first round (£1.7 billion) and the Department required bidders to be able to spend some funding in the 2021–22 financial year (through a pass/fail gateway criteria), this figure should be higher. We are concerned that some bidders may have got through the selection process by being overoptimistic about how ‘shovel ready’ their projects were, while other—more realistic—bidders may have 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. Recommendation: The Department should set out: • Spending profiles for the first round of funding, confirming how much have spent in 2021–22 against the £600 million it anticipated paying; and • Its assessment of optimism bias in authorities’ deliverability plans.
Show less
Government response AI summary
The government agrees, and has a robust process in place to safeguard value for money and ensure deliverability, and has worked with successful applicants to ensure necessary baselining and preparedness for delivery, so they are already addressing the issue.
Read full response →
HM Treasury
9
Conclusion
Fifth Report - Local economic growth
Accepted
Economic development is a devolved power and, since the late 1990s, local growth funding in the devolved nations has been managed by the Scottish and Welsh Governments and the Northern Ireland Executive.24 Since 2020 however, central government’s principle local growth programmes have been UK-wide. The Towns Fund, announced in July …
Read more
Economic development is a devolved power and, since the late 1990s, local growth funding in the devolved nations has been managed by the Scottish and Welsh Governments and the Northern Ireland Executive.24 Since 2020 however, central government’s principle local growth programmes have been UK-wide. The Towns Fund, announced in July 2019, was for England only but the Levelling Up Fund, the UK Community Renewal Fund and the UK Shared Prosperity Fund are all UK-wide.25 The Freeports programme, announced in August 2019, is also UK-wide and while the Chancellor announced Freeport locations in England at the March 2021 Budget, it has taken longer to agree Freeports in Scotland. On 25 March 2022, the UK and Scottish Governments opened bidding for two Scottish Green Freeports.26
Show less
Government response AI summary
The government agrees with the committee's implied recommendation regarding effective UK-wide investment but disagrees with the conclusion's premise. It outlines existing efforts such as specific Levelling Up Fund allocations for devolved nations, engagement with devolved administrations, and the establishment of interministerial groups to discuss levelling …
Read full response →
HM Treasury
14
Recommendation
Fifth Report - Local economic growth
Accepted
The Department’s accounting officer reasoned that we had discussed and reported on the Towns Fund at quite considerable length and that he felt it had a been a valid and fair process.37 In respect of the Levelling Up Fund, he said that there had been a very high level of …
Read more
The Department’s accounting officer reasoned that we had discussed and reported on the Towns Fund at quite considerable length and that he felt it had a been a valid and fair process.37 In respect of the Levelling Up Fund, he said that there had been a very high level of transparency, referring to an explanatory note setting out how decisions were taken, that it had published alongside the list of 105 successful bidders.38 Contrary to the Department’s indications about data published, it did not publish a list of unsuccessful bidders or any thematic distributional analysis of bids and awards and there is no transparency of the location and type of unsuccessful versus successful bids.The Department reassured us that the party of the local MP played no part in the decision-making but that, as they had set out in advance, there was a small allowance in the scoring for where a bid had demonstrated local MP support.39
Show less
Government response AI summary
The government commits to providing information on the balance of successful and unsuccessful bids by theme and geography, directly addressing the committee's call for greater transparency on unsuccessful bids and thematic analysis. It also defends its existing decision-making process for the Levelling Up Fund.
Read full response →
HM Treasury
18
Conclusion
Fifth Report - Local economic growth
Accepted
The Department told us that getting started on delivery was, in many cases, taking longer than expected but that it did not want to penalise places now that they had got through the assessment process. We heard that delays have often been for good reasons such as areas taking more …
Read more
The Department told us that getting started on delivery was, in many cases, taking longer than expected but that it did not want to penalise places now that they had got through the assessment process. We heard that delays have often been for good reasons such as areas taking more time to ensure they have got other project funders in place.54 We asked if the Department had any concerns that bidders may have got through the selection process by being overoptimistic about how ‘shovel ready’ their projects really were, while other—more realistic—bidders may have missed out. The Department told us it did not have any reason to believe that places had been over optimistic.55 47 C&AG’s report, para 3.26 48 Q 60 49 Qq 61, 63 50 Qq 63, 105 51 Q 94 52 Q 95 53 Qq 97–98 54 Q 97 55 Q 99 14 Local economic growth 2 Monitoring, evaluation and oversight Accountability for Levelling Up Outcomes
Show less
Government response AI summary
The government agrees, and has a robust process in place to safeguard value for money and ensure deliverability, and has worked with successful applicants to ensure necessary baselining and preparedness for delivery, so they are already addressing the issue.
Read full response →
HM Treasury