Twenty-First Report - Levelling up funding to local government

Select Committee

Public Accounts Committee HC 424 15 March 2024

Report Status Government responded

Conclusions & Recommendations 25 items (10 recs)

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Government Response (AI assessment · 23 of 25 classified)

Accepted 19

Acknowledged 1

Rejected 3

Government response

Treasury minutes: Government response to the Committee of Public Accounts on the Twenty-first report from Session 2023-24 · published 28 May 2024

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Recommendations & Conclusions

3 results

3 Recommendation Rejected

Set out clear principles and transparent decision-making process for awarding future Levelling Up funds.

Recommendation

The Department changed the rules for applying for the Levelling Up Fund during the application process, wasting scarce public resources, disadvantaging some local authorities and hindering transparency. The Levelling Up programme was sub-optimal in this respect and it is important … Read more The Department changed the rules for applying for the Levelling Up Fund during the application process, wasting scarce public resources, disadvantaging some local authorities and hindering transparency. The Levelling Up programme was sub-optimal in this respect and it is important that lessons are learnt. There is as worrying lack of transparency in the Department’s approach to awarding funds with the Department changing the rules for the Levelling Up Fund as it went along. Having seen how many bids were submitted, the Department decided that local authorities that were successful in Round 1 would not be awarded any funds in Round 2. On average, local authorities have historically spent £30,000 pursuing each competitive grant, such as Levelling Up grants, yet we now know that 55 local authorities who had received funding in Round 1 and then bid in Round 2 had, in fact, no chance of being successful in Round 2. The Department also changed the rules for Round 3, deciding it would not run a new competition but instead restrict the allocation of Round 3 funding to unsuccessful Round 2 bids, meaning those waiting to bid in Round 3 missed out. The Department said that, on balance, this was the best approach to remove the significant effort of bidding. But the downside is that local authorities that did not bid under Round 2 (for example, because they were not ready) did not get a chance to fund their projects. In addition, only around 25% of bids across Rounds 1 and 2 of the Levelling Up Fund were successful: the Department should have better anticipated the expected demand for funding and, given the available funding, set sufficiently stringent criteria to help avoid local authorities investing in bids that had little chance of success. Recommendation 3: In its Treasury Minute response the Department should set out the principles it will apply and the decision-making process for awarding future Levelling Up funds for reducing regional inequality. The Department should ca Show less

Government Response Summary

The government rejects the recommendation, stating that decisions about the rules of future programmes for awarding Levelling Up funds are a matter for Ministers at the time.

HM Treasury

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13 Conclusion Rejected

Department changed Levelling Up Fund rules mid-process, excluding successful Round 1 bidders without notice.

Conclusion

We questioned the Department on why it changed the rules for the Levelling Up Fund between the rounds. It told us that having seen how many bids were submitted for Round 2 of the Levelling Up Fund, ministers decided that … Read more

Government Response Summary

The government disagrees with the committee's implied criticism about changing rules for the Levelling Up Fund between rounds without prior communication, stating that future programme rules are a matter for Ministers. It refers to the new Funding Simplification Doctrine which advocates for allocation over competition for future funds, but this does not address the specific past issue raised by the committee.

HM Treasury

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14 Conclusion Rejected

Levelling Up Fund Round 3 allocation disadvantaged local authorities unable to bid previously.

Conclusion

Round 3 of the Levelling Up Fund was run as an allocation to some of the unsuccessful bids that were submitted in Round 2. We challenged the Department that this disadvantaged some local authorities who might have wanted to submit … Read more

Government Response Summary

The government disagrees with the committee's implied criticism regarding the Round 3 Levelling Up Fund allocation, stating that decisions on rules for future programmes are a matter for ministers. It defends the approach of allocating funds to unsuccessful Round 2 bids as a way to reduce burdens and maximise efficiency, moving away from competition by default.

HM Treasury

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