For the first LEDC Espresso shot of April 2024, David and Mike dive into the previous month’s report from the UK Parliament’s Public Accounts Committee (PAC) into the progress of the three showcase funds of the Government’s levelling up agenda. These are the Towns Fund (comprising Town Deals and the Future High Streets Fund, which operate in England only); the Levelling Up Fund (UK wide); and the UK Shared Prosperity Fund.
In March 2024 PAC published its report on Levelling Up Funding to local government. It makes grim, if predictable, reading. It finds that by September 2023 local authorities had spent only £1.24 billion (just over 10%) of the promised £10.47 billion from the three funds. By December 2023 the Department had transferred £3.7 billion to local authorities out of the total allocation.
PAC’s conclusions surface themes that will be familiar to regular LEDC listeners: the operational disconnect of DLUHC from the realities of local project delivery and the apparent inability of Whitehall to learn lessons and operationalise basic principles of good fund management. But as David and Mike conclude in the episode, PAC’s recommendations are underwhelming: more fundamental changes will be needed to address levelling up funding in the future.
Why are the Public Accounts Committee recommendations inadequate?
PAC’s criticism of DLUHC’s performance focuses on chronic delays in allocating and spending monies; disruptive mid-stream rule changes in award processes; and major gaps in the evaluation of effectiveness and impact. The report’s recommendations focus on improving DLUHC administrative efficiency and programme management. They are sensible given PAC’s remit and the scope of the study - to diagnose what is wrong with the implementation of the three funds from a financial entry point within the DLUHC silo.
However, this misses the more fundamental problems with the Government’s strategy for levelling up and the way they chose to allocate sub-national levelling up funding.
The fact that all three funds suffered major delays and built-in bureaucratic congestion despite different allocation criteria, timeframes, goals and even DLUHC appraisal and administration teams suggests these problems are endemic. This fragmentation is indeed part of the problem. And, in strategic terms, even had the funds been fully disbursed and spent quickly, there can be no confidence that significant levelling-up results would have been achieved.
What should an incoming government do to make the system work better?
LEDC argues consistently, in both our guest and our current affairs episodes, for empowered local and regional leadership teams with evidence-based and widely-owned strategic plans in receipt of stable, long-term funding from the national government. The case for this type of approach is far simpler. It may be a precondition to addressing what PAC has surfaced from DLUHC’s stewardship of three of its 17 levelling-up funds – i.e. change the rules of the game and operating models fundamentally.
Where their report does add value is in the necessity of giving much greater emphasis to ‘learning’ and evaluation in the allocation of levelling up funding.
David and Mike finished with a plea for institutional memory to embed this learning. Whilst we stand by this plea, on reflection perhaps this is the wrong place to end the espresso short.
The PAC findings provide compelling evidence of performance failures in central government administration. But these setbacks are made worse because they were entirely predictable.
Anyone with any experience of Government sub-national LED funding – both formula-based and competitive – over recent decades, would have expected the PAC findings with high degrees of confidence. Ultimately, even with institutional memory, are we destined to keep repeating the same mistakes? That is the killer question any incoming government has to answer.
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