Sixth Report - Funding for Levelling Up

The government explicitly disagrees with the committee's conclusion, stating that Levelling Up is a whole-of-government mission where all spending contributes. It highlights extensive joint working across departments and with local actors through various initiatives, including devolution deals, partnerships, and Investment Zones.

The government rejects the committee's conclusion, stating that local government's Core Spending Power has seen a real terms increase between 2019-20 and 2023-24. It clarifies that Levelling Up funds are not intended to duplicate core funding and cites the UKSPF as a predominantly revenue-based programme that offers local authorities flexibility.

The government explicitly rejects the recommendation for greater co-ordination and oversight and for setting out specific funding streams contributing to levelling up, arguing it's a whole-of-government mission where such categorisation would be misleading. They assert that sustained joint working already exists, citing numerous initiatives and devolution deals.

The government highlights its published plan for simplifying the funding landscape and its commitment to launch a Funding Simplification Doctrine in 2024, which will encourage allocative approaches over competitive bids where suitable. It cites the UKSPF as a non-competitive fund with a mix of revenue and capital funding, empowering local leaders with flexibility.

The government states it published a plan on 4 July 2023 for simplifying funding and will launch a Funding Simplification Doctrine in 2024 to guide appropriate distribution methodologies. It also highlights the UK Shared Prosperity Fund which provides formula-based allocation rather than competitive bidding.

The government outlines its plan for simplifying the funding landscape, published on 4 July 2023, and commits to launching a Funding Simplification Doctrine in 2024. This doctrine will assess the most suitable distribution methodology, encouraging allocative approaches where appropriate to minimize demands on local authorities.

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.

The government confirms it provided feedback to unsuccessful applicants in both rounds, improving the process in round two by providing detailed written feedback based on lessons learned from round one. They note receiving positive feedback on the round two process.

The government states it is reflecting on lessons learned from past Levelling Up Fund rounds regarding feedback and will apply these lessons to future feedback approaches, but does not commit to specific guidance changes or public feedback.

The government acknowledges the administrative burden of competitive bidding and confirms that a simplification plan will balance their approach, committing DLUHC to work with local authorities for fair and transparent distribution. They also highlight existing measures like capacity grants and support for joint bids, affirming that local priorities are tested in funding assessments.

The government acknowledges the administrative burden of competitive bidding and states the upcoming funding simplification doctrine will balance its approach. It commits to working with local authorities to ensure fair and transparent distribution of competitive funding and to encouraging collaboration, citing existing capacity grants and provisions for joint bids in the Levelling Up Fund.

The government denies that additional metrics were applied after applications closed in round two, stating the decision-making framework and all five wider considerations were outlined in the published Prospectus and Technical Note prior to submissions. They assert a robust and transparent process was followed.

The government refutes the claim of introducing new metrics, stating its decision-making framework was published at the outset. It adds that it has provided £65 million in additional funding to support local authorities with project development, including adapting to inflation impacts.

The government acknowledges the work councils put into previous Investment Zone applications, stating this effort was not wasted but informed policy development for the refocused program. They explain the decision to limit the number of zones and eligible areas, noting other levelling up opportunities are available for non-Mayoral Combined Authorities and that the list of areas will be kept under review.

The government acknowledges the policy shift for Investment Zones was due to a new administration and states that, in the refocused policy, the department tried to minimise wasted effort for local authorities.

The government rejects the premise that IMD is a 'one size fits all' solution, stating their chosen indicators align better with Levelling Up Fund interventions. They clarify that methodology notes and links to data sets for both rounds are publicly available on gov.uk, including a proprietary commercial vacancy rate made public.

The government defends its data collection approach, explaining that its chosen indicators align with Levelling Up Fund interventions and that data sources are primarily government statistical releases, with links provided in published methodology notes. It states it chose to gather data from original sources rather than relying on aggregated data.

The government acknowledges data concerns but states good progress is being made on metrics, with new data publicly available. They also note the Levelling Up and Regeneration Bill will require annual reports and DLUHC is working to publish subnational expenditure data, with an annual report on devolution due by March 2024.

The government outlines ongoing efforts to make data publicly available, including through the Subnational Indicators Explorer and a subnational expenditure project. It also states that an Annual Report on Devolution will be published by March 2024, and the Levelling Up and Regeneration Bill will mandate annual progress reports.

The government clarifies that the Spatial Data Unit (SDU) is transforming data use for place-based decision-making and is already producing granular data, such as LSOA Gross Value Added (GVA) and improved R&D expenditure estimates. The SDU is also supporting the Subnational Indicators Explorer, which is updated quarterly.

The government outlines the Spatial Data Unit's (SDU) ongoing work to transform data use, including subnational expenditure projects, partnerships with the ONS for local statistics, and the development of public tools like the Subnational Indicators Explorer, updated quarterly. It highlights various published data outputs and collaborative efforts.

The government clarifies that the change in capital expenditure sign-off only relates to new projects and has no implications for DLUHC's budgets, policy objectives, or the delivery of Levelling Up. They cite recent funding announcements as evidence of continued investment.

The government rejects the conclusion that the UK Shared Prosperity Fund is not a sufficient replacement for EU funding, stating that total UK-wide funding will at least match previous EU structural fund receipts by 2024-25. They explain their calculation methodology and highlight engagement with devolved administrations on bespoke allocation.

The government reiterates that its UKSPF funding methodology was published in 2022 and claims engagement with devolved administrations took place. It states it will seek to improve engagement and collaboration on any future funding, but maintains current funding is sufficient.

The government notes the UKSPF's alignment with the three-year Spending Review cycle and states it will continue to consider feedback about longer-term funding allocations during preparations for the next Spending Review.

The government states the UKSPF aligns with the three-year Spending Review cycle and will continue to consider feedback on longer-term funding during preparations for the next review.

The government acknowledges shared goals with devolved administrations and outlines its existing close working relationship and consultation efforts across various levelling up initiatives, including joint Freeports, seeking advice on the Levelling Up Fund, and engaging on UKSPF interventions.

The government acknowledges shared goals with devolved administrations and asserts they are working closely across various levelling up areas, citing examples like joint Freeports, and consultations on the Levelling Up Fund and UKSPF to agree bespoke interventions and align with priorities. They do not directly address the specific "wasteful" criticism of the Multiply fund.

The government describes its existing and past close collaboration with devolved administrations on Levelling Up, citing examples like joint Freeport announcements, seeking input on the Levelling Up Fund, and developing bespoke interventions for the UKSPF, asserting it is already working closely across the UK.

The government acknowledges the importance of Section 75 considerations for Northern Ireland. They state that for UKSPF, applicants must describe impacts and collect data on protected characteristics, and they will further embed these considerations. For the Levelling Up Fund, they explain that Memorandums of Understanding were used to ensure compliance with Section 75 principles and allow official engagement without legal risk.

The government outlines existing measures to ensure engagement with Northern Ireland officials is compatible with Section 75 of the 1998 Northern Ireland Act, including requiring UKSPF applicants to describe project impact and using MoUs for the Levelling Up Fund, while acknowledging the challenge of a non-functioning Executive.

The government acknowledges the historic stop-start approach to local growth and states that Levelling Up is a long-term programme, with the Levelling Up and Regeneration Bill enabling missions to continue beyond 2030. It also refers to a recently published simplification plan to improve the current funding system.

The government acknowledges the concern regarding previous short-term initiatives, asserting that Levelling Up is a long-term programme with 2030 missions and legislative backing to continue beyond. It also notes efforts through a simplification plan to streamline funding and reduce administrative burdens.

The government states that the Levelling Up policy is already a long-term program, with missions set until 2030 and provisions for continuation beyond. They also reference a simplification plan to streamline funding and reduce duplication, claiming existing efforts address the recommendation.