Recommendations & Conclusions
15 items
4
Recommendation
Fifth Report - Local economic growth
Acknowledged
There remains considerable uncertainty for Local Authorities around funding, structures and responsibilities for local economic growth. The Department extols the virtues of local plans for coordinating and achieving value for money from central government funding. However local authorities’ attempts at long-term planning have been frustrated by the timing, co-ordination, and …
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There remains considerable uncertainty for Local Authorities around funding, structures and responsibilities for local economic growth. The Department extols the virtues of local plans for coordinating and achieving value for money from central government funding. However local authorities’ attempts at long-term planning have been frustrated by the timing, co-ordination, and unpredictability of the “alphabet soup” of funding pots to support regeneration in recent years. 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. Further uncertainty arises from delays in awarding some of this funding, and the patchy integration of Local Enterprise Partnerships (LEPs) into existing structures. While the Department is now consolidating funding and says there are now “indicative allocations” for the UK Shared Prosperity Fund, the scheme itself has yet to be announced. The Department plans to introduce Levelling Up Directors to improve relations between central and local government. However there is, as yet, no clarity on when they will be in place, and limited information on what they will be doing. Recommendation: In its Treasury Minute response, the Department and HM Treasury should set out how they intend to provide greater certainty to Local Authorities to enable them to plan the integrated capital, skills and community investment needed to drive growth in their areas.
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Government response AI summary
The government recognises the local growth funding landscape has been complex and fragmented, and will set out a plan for streamlining the funding landscape this year; a new Levelling Up Cabinet Committee has also been established.
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HM Treasury
6
Recommendation
Fifth Report - Local economic growth
Acknowledged
Accountability for levelling up outcomes remains unsatisfactory. This Committee has reported before that government’s accountability arrangements had failed to keep pace with increasingly complex ways of delivering policies and services. and that this had weakened accountability to Parliament for the use of public funds. The cross-government nature of the levelling …
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Accountability for levelling up outcomes remains unsatisfactory. This Committee has reported before that government’s accountability arrangements had failed to keep pace with increasingly complex ways of delivering policies and services. and that this had weakened accountability to Parliament for the use of public funds. The cross-government nature of the levelling up ambition makes accountability more complicated, and the Levelling Up outcomes (or ‘missions’) in the White Paper relating to pay, productivity, and employment are inherently cross-cutting. While accountabilities for the Levelling Up fund and UK Shared Prosperity fund are clear, the Department told us that those for the 12 Levelling Up missions are still being worked through. Recommendation: HM Treasury and the Department should write to the committee alongside the Treasury Minute response to clarify departmental accountabilities for levelling up outcomes and in particular for cross-cutting missions.
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Government response AI summary
The department has implemented a new architecture across central government to support delivery including the Levelling Up Cabinet Sub-Committee and will write to the Committee separately with further details once arrangements have been confirmed with new ministers.
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HM Treasury
7
Recommendation
Fifth Report - Local economic growth
Acknowledged
The Department does not yet know how it will measure performance on a consistent basis across different geographical areas and timescales. We are concerned that data availability and quality is not yet adequate to track progress against the Levelling Up missions, either at a local level or to allow comparison …
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The Department does not yet know how it will measure performance on a consistent basis across different geographical areas and timescales. We are concerned that data availability and quality is not yet adequate to track progress against the Levelling Up missions, either at a local level or to allow comparison across the UK’s nations. For example, it is not clear how the Department will measure sub- regional productivity, as an outcome measure around living standards, since Gross Domestic Product data is not available at a local level. We welcome the steps the Department is taking to improve its data quality, but we are not convinced that there is sufficient capacity at a local level to make the data quality improvements needed there. We are also concerned that data quality improvements may not be delivered in time to allow year-on-year comparisons or to establish a baseline against which to measure progress. Recommendation: The Department should clarify how it intends to provide performance information on a consistent basis (both year on year and across different geographical areas) and how, in the absence of good quality local data, it intends to establish a baseline against which to measure progress. 8 Local economic growth 1 Design and Delivery
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Government response AI summary
The government agrees with the Committee’s recommendation but disagrees with the conclusion on which it is based, and describes the role of the Spatial Data Unit and ONS in measuring progress against levelling up missions.
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HM Treasury
10
Conclusion
Fifth Report - Local economic growth
Acknowledged
We asked the Department how the part played by the devolved governments on the UK Shared Prosperity Fund compared to their part in deciding the allocation of the European funds it is replacing. The Department explained that for the European Structural Funds, the Devolved National Governments had been the “managing …
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We asked the Department how the part played by the devolved governments on the UK Shared Prosperity Fund compared to their part in deciding the allocation of the European funds it is replacing. The Department explained that for the European Structural Funds, the Devolved National Governments had been the “managing authorities” but that decision-making for the UKSPF will be for the UK Government. We raised concerns that 20 Q 79, 80 21 Q 79 22 Q 80 23 Qq 90, 119–122 24 C&AG’s Report, para 4 25 C&AG’s Report, para 3.2; Committee of Public Accounts, Selecting towns for the Towns Fund, Twenty-Fourth Report of Session 2019–21, HC 651, 11 November 2020, para 2 26 Q 103,C&AG’s report, para 3 and Figure 2; Department for Levelling Up, Housing & Communities, Freeports programme: accounting officer assessment, March 2022; Green Freeports in Scotland: bidding prospectus, March 2022 Local economic growth 11 the arrangements meant that where the Scottish Government, for example, had previously been able to allocate funds to local authorities using its priorities, the equivalent decision for the UKSPF would now be taken by the UK Government and based entirely on UK Government’s assessment of priorities.27 We noted that decisions such as those around how much to allocate, what the criteria were, when to open and close bidding and how to score bids, were taken by the UK government, whereas previously devolved governments would have had significant input.28
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Government response AI summary
The department agrees with the committee's recommendation, but disagrees with the conclusion it is based on and states its priority is delivering effective investment in all parts of the UK and describes existing mechanisms for working with devolved administrations.
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HM Treasury
11
Conclusion
Fifth Report - Local economic growth
Acknowledged
The Department reassured us that it was expecting to work very closely with each of the devolved Governments and with the individual local authorities responsible for delivery. We were, however, sceptical about how close past cooperation with devolved Governments had really been and the extent to which it enabled national …
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The Department reassured us that it was expecting to work very closely with each of the devolved Governments and with the individual local authorities responsible for delivery. We were, however, sceptical about how close past cooperation with devolved Governments had really been and the extent to which it enabled national priorities to be accommodated, though we acknowledged that co-operation between officials appeared to have improved.29 The Department considered the recent experience with Scottish Green Freeports a “really good example” of collaboration between the UK and Scottish governments. We noted, however that Scottish Green Freeports took a long time to agree and suggested that may have been because the Scottish Government eventually secured requirements that it wanted to include but that hadn’t featured in the UK government’s requirements.30 Decision-making when awarding funds
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Government response AI summary
The department agrees with the committee's recommendation, but disagrees with the conclusion it is based on and states its priority is delivering effective investment in all parts of the UK and describes existing mechanisms for working with devolved administrations.
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HM Treasury
17
Conclusion
Fifth Report - Local economic growth
Acknowledged
We queried whether making “up to” £600 million available for 2021–22 at the Spending Review 2020 had set an expectation about the amount that would be awarded in the first year.51 The Department explained that this £600 million was the amount it expected bidders to spend in the first year …
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We queried whether making “up to” £600 million available for 2021–22 at the Spending Review 2020 had set an expectation about the amount that would be awarded in the first year.51 The Department explained that this £600 million was the amount it expected bidders to spend in the first year of funding and not an indication of how much it intended to award in the first round. When asked how much it had paid out this year, the Department estimated that it had so far paid out around £100 million.52 Given it was only four weeks to the year end when we took evidence, that the Department had required bidders to be able to spend some funding in the 2021–22 financial year as part of the pass/ fail criteria, and it expected bidders to spend £600 million in the year, we would have expected this £100 million figure to be much higher.53
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Government response AI summary
The government agrees with the committee's observation, explaining that the initial £600 million for the Levelling Up Fund was an early planning assumption, updated to £200 million at SR21, and actual spend was £128 million due to various economic factors. It provides a spending profile …
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HM Treasury
19
Conclusion
Fifth Report - Local economic growth
Acknowledged
This Committee reported in 2016 that government’s accountability arrangements had failed to keep pace with increasingly complex ways of delivering policies and services and that this had weakened accountability to Parliament for the use of public funds.56 Noting the long timescales and magnitude of the delivery challenge, we questioned witnesses …
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This Committee reported in 2016 that government’s accountability arrangements had failed to keep pace with increasingly complex ways of delivering policies and services and that this had weakened accountability to Parliament for the use of public funds.56 Noting the long timescales and magnitude of the delivery challenge, we questioned witnesses on who was accountable for levelling up outcomes. The Department told us that levelling up was a cross-government exercise which inevitably made accountability more complicated.57 The Department explained that Cabinet Committee would be the formal mechanism for overseeing the Levelling Up work as a whole but that government was still working through accountabilities for the Levelling Up ‘missions’- in reference to the 12 ‘missions’ or Levelling Up outcomes set out in the White Paper.58
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Government response AI summary
The department has implemented a new architecture across central government to support delivery including the Levelling Up Cabinet Sub-Committee and will write to the Committee separately with further details once arrangements have been confirmed with new ministers.
Read full response →
HM Treasury
20
Conclusion
Fifth Report - Local economic growth
Acknowledged
We heard that a lot of the missions were cross-cutting and would require leadership from several departments while others were more focussed and there would be more of a role for a lead department.59 For example, the Accounting Officer from the Department for Business, Energy and Industrial Strategy told us …
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We heard that a lot of the missions were cross-cutting and would require leadership from several departments while others were more focussed and there would be more of a role for a lead department.59 For example, the Accounting Officer from the Department for Business, Energy and Industrial Strategy told us that she was accountable for targets in the White Paper relating to innovation.60 We queried whether HM Treasury, which ultimately holds the purse strings, felt responsible for delivering on levelling up. HM Treasury told us that its accounting officer was not accountable for the Levelling Up Fund or for the UK Shared Prosperity Fund and that the overarching mission relating to pay, productivity and employment was inherently cross-cutting and touched every government department.61 Formal accountability for the UKSPF sits with the Department, it shares accountability for the Levelling Up Fund with the Department for Transport.62 Approach to evaluation
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Government response AI summary
The government agrees, and will implement a new architecture across central government to support delivery, including the Levelling Up Cabinet Sub-Committee. The department and HM Treasury will write to the Committee separately with further details once arrangements are confirmed with new ministers.
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HM Treasury
21
Conclusion
Fifth Report - Local economic growth
Acknowledged
We questioned the Department on why, despite billions of pounds spent on it over the years, there was so little evidence on what works for delivering local economic growth, particularly outside London. The Department’s Accounting Officer pointed to the inherent complexity of understanding how local economies grow, and that the …
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We questioned the Department on why, despite billions of pounds spent on it over the years, there was so little evidence on what works for delivering local economic growth, particularly outside London. The Department’s Accounting Officer pointed to the inherent complexity of understanding how local economies grow, and that the precise mix of interventions needed and the engagement between private sector and society, varied from place to place. He explained that ultimately it was for central government to provide frameworks and funding, and for local areas to determine the right interventions. While acknowledging that the picture of evidence was imperfect, the Department told us that it was “not a counsel of despair” and that the Levelling Up White Paper drew very clearly on lessons from the past.63 As examples of successful local growth projects, he pointed to the Department for Transport’s Transforming Cities Fund and, he said, taking a broader interpretation of what makes a difference at a local level, the Supporting 56 Committee of Public Accounts, Accountability to Parliament for taxpayers’ money, Thirty-ninth Report of Session 2015–16, HC 732, 4 May 2016 57 Q 128 58 Q 128; HM Government, Levelling Up the United Kingdom, CP 604, 2 February 2022 59 Q 128 60 Q 132 61 Q 133 62 Q 36; C&AG’s Report, para 6 63 Q 12 Local economic growth 15 Families programme. Drawing from the White Paper, the Department emphasised the importance of a holistic definition of local growth that included not only investment in physical capital such as transport infrastructure, but how to combine that investment with other forms of investment such as skills.64
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Government response AI summary
The department agrees with the recommendation and will continue to fill evidence gaps through engagement and learning from evaluations; processes to feed evaluation findings into local growth activity and wider levelling up agenda is at the design stage.
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HM Treasury
22
Conclusion
Fifth Report - Local economic growth
Acknowledged
In 2019, this Committee reported that the Department did not understand what impacts its £12 billion Local Growth Fund had had on local economic growth yet had decided not to evaluate it.65 We were encouraged to learn that the Department has now decided to reverse that decision but, as the …
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In 2019, this Committee reported that the Department did not understand what impacts its £12 billion Local Growth Fund had had on local economic growth yet had decided not to evaluate it.65 We were encouraged to learn that the Department has now decided to reverse that decision but, as the NAO’s report highlights, designing an evaluation at the end of a scheme is not best practice as activities such as establishing a baseline against which to assess impact will be extremely difficult.66 The vital importance of embedding evaluation into programmes from the start was also stressed to us more recently by the government’s heads of evaluation and analysis, who are trying to improve practice across government as a whole.67 The Department assured us that this retrospective approach is not one it would take now and stressed the importance of continued evaluation and its prominence in the White Paper.68 We asked the Department how it intended to use the metrics in the Levelling Up White Paper to evaluate what was working and what was not. The Department told us that evaluation was at the heart of its work and, in a break from the past when it left evaluation to local bodies, it was putting evaluation strategies in place up front.69
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Government response AI summary
The department has a strong understanding of what works for local growth, is filling evidence gaps through engagement and forthcoming evaluations, and has established the Spatial Data Unit.
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HM Treasury
23
Recommendation
Fifth Report - Local economic growth
Acknowledged
The Department has been considering an overarching monitoring and evaluation framework for local growth to include common objectives and outcomes, within which individual programme-level frameworks would sit. This would enable it to compare the relative effectiveness of similar initiatives and minimise the data collection burden on local authorities. The Department …
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The Department has been considering an overarching monitoring and evaluation framework for local growth to include common objectives and outcomes, within which individual programme-level frameworks would sit. This would enable it to compare the relative effectiveness of similar initiatives and minimise the data collection burden on local authorities. The Department has not yet started to develop this framework but is now developing detailed monitoring and evaluation plans for each of its local growth funds. These are at different stages of implementation. The Department has previously committed to defining a common set of metrics to aid comparison across places, but without significant progress.70
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Government response AI summary
The department agrees with the recommendation and will continue to fill evidence gaps through engagement and learning from evaluations; processes to feed evaluation findings into local growth activity and wider levelling up agenda is at the design stage.
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HM Treasury
24
Recommendation
Fifth Report - Local economic growth
Acknowledged
When we asked what success would look like for people in areas where, for example, it is hard to get a job or the High Street is struggling, the Department highlighted the importance of taking a broad definition of growth.71 We heard that that success would include people having access …
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When we asked what success would look like for people in areas where, for example, it is hard to get a job or the High Street is struggling, the Department highlighted the importance of taking a broad definition of growth.71 We heard that that success would include people having access to good jobs, a good place to live, a vibrant High Street and pride in the sense of community. The Department for Transport told us that its appraisal includes measures around the role that transport plays in connecting people to jobs and services, unlocking housing and wider investment, and decarbonisation.72 64 Qq 12–15 65 Committee of Public Accounts, Local Enterprise Partnerships: progress review, One Hundred and Fifth Report of Session 2017–19, HC 1754, July 2019 66 C&AG’s Report, paras 19 and 4.10 67 Public Accounts Committee, Oral evidence: Use of evaluation and financial modelling, HC 1055, Wednesday 9 March 2022 68 Q 12–13 69 Q 137 70 C&AG’s Report, para 4.5 71 Qq 14–15 72 Qq 15–16 16 Local economic growth Measuring performance on a consistent basis
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Government response AI summary
The government agrees with the recommendation but disagrees with the conclusion. They will continue to measure progress for most missions consistently, and are undertaking further work to develop those that are exploratory. The Spatial Data Unit will produce indicators, address current data gaps and measure …
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HM Treasury
25
Conclusion
Fifth Report - Local economic growth
Acknowledged
Two of the missions in the Levelling Up White Paper are ‘overarching’ missions. The first is around living standards and includes measures of productivity, pay and jobs and the second is around measures of well-being.73 With reference to the first, we asked the Department how it intended to measure local …
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Two of the missions in the Levelling Up White Paper are ‘overarching’ missions. The first is around living standards and includes measures of productivity, pay and jobs and the second is around measures of well-being.73 With reference to the first, we asked the Department how it intended to measure local productivity. The Department told us it had set out the metrics it intended to use to track progress against the missions in the annexe to the White Paper but acknowledged that while there was regional GDP data, there was very little available below regional level.74 It told us it had: set out a programme of work to improve the quality and timeliness of local data, including data that would make comparisons across the UK’s nations possible; that it was developing a Spatial Data Unit (which the White Paper says will drive the data transformation required in central government); and that it was working closely with the Office of National Statistics to collect statistics that reflect the modern economy.75
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Government response AI summary
The government agrees with the Committee’s recommendation but disagrees with the conclusion on which it is based, and describes the role of the Spatial Data Unit and ONS in measuring progress against levelling up missions.
Read full response →
HM Treasury
26
Conclusion
Fifth Report - Local economic growth
Acknowledged
When we asked the Department whether it expected to be able to get this data quickly enough to be able to measure what impact the funds under its levelling-up agenda were having, the Department told us it would be able to make some progress quickly but some of it would …
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When we asked the Department whether it expected to be able to get this data quickly enough to be able to measure what impact the funds under its levelling-up agenda were having, the Department told us it would be able to make some progress quickly but some of it would need time to develop.76 We questioned whether there was sufficient capacity at a local level to gather and analyse useful data, the Department told us that some local authorities were already doing this but acknowledged that not all would be in that position. The Department considered that conversations with local authorities, communities and businesses about the health of their economies could provide proxy indicators in the absence of good data.77
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Government response AI summary
The government agrees with the Committee’s recommendation but disagrees with the conclusion on which it is based, and describes the role of the Spatial Data Unit and ONS in measuring progress against levelling up missions.
Read full response →
HM Treasury
27
Conclusion
Fifth Report - Local economic growth
Acknowledged
We asked the Department how it intended to pull together all this data to show a big picture, as well as a local picture, to demonstrate the effectiveness of government’s levelling up agenda. The Department told us it had committed to reporting annually on levelling up and its performance against …
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We asked the Department how it intended to pull together all this data to show a big picture, as well as a local picture, to demonstrate the effectiveness of government’s levelling up agenda. The Department told us it had committed to reporting annually on levelling up and its performance against the missions but it had not yet committed to a timescale.78 We encouraged the Department to consult on the contents of these reports and to provide consistent data on a consistent basis that would enable us to compare one year with another.79 73 Q 107; Page 12 – Levelling Up the United Kingdom: missions and metrics Technical Annex (publishing.service. gov.uk) 74 Q 107 75 Q 107; Government’s White Paper: Levelling Up the United Kingdom, Page 150–151 76 Q 108 77 Q 110 78 Q 125 79 Qq 127–128 Local economic growth 17
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Government response AI summary
The government agrees with the Committee’s recommendation but disagrees with the conclusion on which it is based, and describes the role of the Spatial Data Unit and ONS in measuring progress against levelling up missions.
Read full response →
HM Treasury