Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Acknowledged
Many levelling-up projects 'underway' with few completed and limited tangible impact.
Conclusion
The Department sought to fund ‘shovel-ready’ projects in both the Towns Fund and Levelling Up Fund. The Department told us the latest figures across Rounds 1 and 2 of the Levelling Up Fund show that 284 out of 308 projects have commenced. For the Future High Streets Fund, it is 185 out of the 242 and for the Town Deals, it is 488 out of the 604 projects.9 We challenged the Department on its use of different terms for the status of projects. The Department told us that its use of the term ‘underway’ means a local authority has started to spend the government funding they have been given under these funds and could include, for example, activities such as feasibility studies, seeking planning permission, land acquisition, paying for design fees or site preparation.10 We were also concerned to see that 19 projects under the Future High Streets Fund had been paused. The Department told us it would be in discussion with those local authorities about how to progress the projects.11 By 31 March 2023 local authorities and other organisations had completed 64 projects across these funds.12 We asked for three examples of projects that had delivered change. We felt the examples the Department gave us were, while important to their localities, relatively small scale compared to the substantial and convincing examples we would have expected the Department to have readily available at this stage.13 Projects behind schedule
Government Response Summary
The government acknowledges the committee's observations regarding project status and delivery, stating it has 'implemented' the recommendation (despite it being a conclusion). It clarifies the stages of funding distribution, provides updated figures on projects underway and completed, and explains how it measures success, also noting wider economic factors causing delays.
Government Response
Acknowledged
HM Government
Acknowledged
1.1 The government agrees with the Committee’s recommendation. Recommendation implemented 1.2 Following the setting of a Budget at Spending Review 2021, the distribution of Levelling Up Funds can be seen in four stages: • The announcement of the global figure at Spending Review for the full lifespan on the fund, • The allocation or awarding of funding to a local authority (in most cases), • The transfer or release of funds to that local authority (LA), once it is ready to receive them, and • The spending of money by the LA. 1.3 Figures cited by the Committee compare the amount spent by LAs to the total announced at Spending Review for the lifespan of the funds, less than halfway through the Spending Review Period. However, it is unsurprising that the £1 billion allocated to local authorities in November 2023 had not yet been spent. 1.4 The government considers a fairer measure of success to be the amount of money spent by LAs compared to the funding released to them. This avoids a situation where future funding – or money yet to be received by LAs because of the Spending Review profile – is used to judge performance. 1.5 To date, the government has released £4 billion to local authorities across the three funds and LAs have spent £1.45 billion. Based on forecasts received by LAs, the Department for Levelling Up, Housing and Communities (DLUHC, the department) expects them to spend 70-86% of funding transferred to them in 2023-24. Exact amounts can be confirmed when monitoring returns are received this summer. 1.6 The latest Monitoring Report provides a snapshot of delivery as of September 2023: • The Levelling up Fund has offered 342 projects funding, of which 330 are underway and 8 complete. • The Towns Fund has offered 837 projects funding of which 717 are underway and 79 complete. The UK Shared Prosperity Fund delivery model is substantively different. LAs have discretion to initiate and cancel projects: as such the government does not monitor project data in the same way. 1.7 As the National Audit Office (NAO) report recognised, wider economic factors have caused delays to projects. The department is working closely with LAs to support sure up delivery as set out in section 2.