Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Set out lessons learned to ensure timely success and application to future levelling up funds.
Recommendation
We are concerned the Department did not do enough to understand the readiness of project proposals and the challenges facing local authorities before it awarded funds. As we have found before, optimism bias has put impactful bids to the Levelling Up Fund at risk of missing out at the expense of so-called ‘shovel-ready’ projects. The Department gave many reasons why projects are delayed and how it needed to balance deliverability against requiring local authorities to have everything in place to start building as soon as they are awarded funds. But this optimism has meant the Department has had to allow local authorities to extend the deadline to spend their money for all projects in the Levelling Up Fund Rounds 1 and 2 and the Future High Streets Fund. So far, the vast majority (60 out of the 71) of Levelling Up Fund Round 1 projects which were due to have spent their government funds by the end of 2023–24 have reprofiled their spend into 2024–25 and the Department expects some of the remining 11 to do so as well. We found this astonishing given Round 1 of the Levelling Up Fund was awarded to ‘shovel-ready’ projects that were supposed to be completed and delivering for local people by March 2024. As Round 3 of the Levelling Up Fund has been allocated to those unsuccessful bids made under Round 2, the Department could not assure us these same delays would not be repeated. Furthermore, the Department could have been much more inquisitive about the realistic delivery timetable of each project it funded, for example in regard to obtaining planning permission and acquisition. Levelling up funding to local government 7 Recommendation 2: In its Treasury Minute response, the Department should set out what it has learnt to ensure proposals have the best chance of timely success, and how it will ensure this learning is applied to future funds. It should also set out how it is sharing its experiences with the Levelling Up programme both within the Department and across governm
Government Response Summary
The government agrees and outlines implemented measures to ensure timely project success, including a project adjustment request process, funding for capacity, and reducing complexity through the Funding Simplification Doctrine. It also highlights the shift away from competition in Levelling Up Fund and the greater flexibility of the UK Shared Prosperity Fund and Long-Term Plan for Towns.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented On Levelling Up Fund, the government prioritised proposals from places that were confident of getting started quickly so that local people could experience the benefits as soon as possible. On the Towns Fund, places had longer to prepare. However, in both cases the department sought robust delivery plans from places as a condition of payment. The NAO report recognised that wider economic factors have caused delays to projects. The department has implemented several programme-wide measures to support local authorities with managing changing project costs. This included providing greater flexibility through a project adjustment request (PAR) process; funding to improve capacity and capability; and reducing complexity to simplify the funding landscape. These commitments are set out in the Funding Simplification Doctrine. The department has reflected on lessons learned through the simplification pathfinder pilot and stakeholder feedback regarding the burden on local authorities. It is moving to a funding system which has a simpler and more streamlined landscape, increased flexibility for local authorities and partners and longer-term funding settlements. The department is putting this plan into action. For example, it has taken a new approach to the third round of the Levelling Up Fund, moving away from competition and making use of the large number of high-quality bids submitted in Round 2. This reduces burdens and maximises efficiency. The UK Shared Prosperity Fund provides local authorities more flexibility with a three- year allocation that they can spend on local priorities or projects. Its mix of revenue and capital funding can be used to support a wide range of interventions to build pride in place and improve life chances. These can complement capital projects as well as existing business or employment and skills provision. Acting on lessons learned, the department has offered greater flexibility and certainty through the 10-year, endowment-style Long-Term Plan for Towns. The department creates regular opportunities to share learning with and between its partners, including the annual ‘Towns conference’ and seminars on specialist topics led by expert delivery partners. Further information about Delivery Associates can be found at 5.2.