Asked by
To ask His Majesty’s Government, following the publication of the
National Audit Office report Levelling up funding to local
government on 17 November, what action they are planning to take
to improve the delivery of projects approved under their
levelling-up agenda.
(Lab Co-op)
My Lords, I beg leave to ask the Question standing in my name on
the Order Paper and refer the House to my relevant interest as a
vice-president of the Local Government Association.
The Parliamentary Under-Secretary of State, Department for
Levelling Up, Housing & Communities () (Con)
My Lords, the department has implemented several measures to
support local authorities in their delivery of levelling-up
projects. These include committing over £65 million for capacity
support to unblock delivery issues and giving authorities greater
flexibility over spending decisions. The National Audit Office
report covers the progress of projects up to March 2023, and in
the eight months since then the department has paid out over £1.5
billion of further funding to local authorities.
(Lab Co-op)
I thank the noble Baroness for her comments. The report from the
National Audit Office makes shocking reading: it tells of money
allocated but not spent, contracts not signed and projects not
delivered. Can the Minister explain to the House how a flagship
programme of the Government is in such a mess?
(Con)
My Lords, the report itself highlights a number of issues that
have delayed some of the delivery, including rising costs and
inflation and other outside factors. That is why we are working
with local authorities to address those issues. As I say, in the
eight months since the report, the department has paid over £1.5
billion of further funding out to local places. We have already
seen several projects completed or near completion, which are
making a difference to the lives of people in those
communities.
(Con)
Further to the Question asked by the noble Lord, Lord Kennedy,
the NAO was not entirely critical of my noble friend’s
department. It did say that evaluation was better and that the
grant management process had improved. But it also said that a
number of projects would not be completed by the proposed
deadline. Where there are good reasons for that delay, will there
be some flexibility in those deadlines? Otherwise, some very
worthwhile projects will be abandoned.
(Con)
I thank my noble friend for drawing out some of the positives of
that report, as there were indeed some. He is right that, while
we are keen to see the delivery impact of this investment as soon
as possible, there have been some delays. For example, we have
talked about inflationary pressures, so for the levelling-up
fund, the prospectus for both rounds 1 and 2 said that we
expected all funding provided to be spent by March 2024 and March
2025 respectively. However, those deadlines can be extended by
one year on an exceptional basis. Similarly, for the future high
streets fund, we have given a six-month extension for the spend
deadline, taking it to 30 September next year, giving local
places additional time to deliver their transformational
projects.
(LD)
My Lords, I remind the House that I am also a vice-president of
the Local Government Association. As has been pointed out, one of
the reasons for the problems we have is rising cost pressures,
both inflation and interest rate levels, and in some cases, of
course, withdrawal of contractors. Will the Minister assure the
House that, in such circumstances, it cannot just be an
“exceptional case”? I quote the phrase that she used in her
previous reply. The NAO has shown that there is an average delay
of almost 10 months across projects as a whole. That is simply
too much, and I ask the Minister to consider very carefully extra
money to support the budgets of projects where there is a case
and, secondly, for an automatic extension to the length of
budgets, otherwise we will carry on having some of the problems
that we have seen.
(Con)
My Lords, as I have said, we are keen to see the delivery impact
of the investment as soon as possible. That is why we have not
moved to an automatic extension to the deadlines involved.
However, we have moved to give local authorities more flexibility
about how they spend their money without coming back to central
government, to enable delivery. We have also put in place both
more funding and more support to local authorities in the
delivery of their projects, to help them meet their own
deadlines.
(CB)
My Lords, the noble Baroness will know that some of the most
difficult cuts in local government spending over the last decade
were in the support for children and families. The probation
inspectorate looked at the number of young people in secure
accommodation and reported that many of these young people could
be accommodated in the community with the right kind of support.
That is not only in the interests of the young people but
considerably cheaper. Could the noble Baroness do all that she
can to make sure that the money that has been allocated is
properly spent?
(Con)
The Government are really focused on ensuring that the
levelling-up funds deliver value for money and provide
transformative outcomes for the local areas that they deliver
for. The Government set out a really clear approach to the
evaluation of these projects to make sure that they do just
that.
(PC)
My Lords, I draw attention to my interest chairing the slate
quarrying levelling-up fund on Gwynedd Council, which is also
facing the challenge of meeting the deadline of April 2025. If
indeed the pressures arise from a systematic shortage—a capacity
shortage—within the system, will the Government lean towards
giving the flexibility of an extra year to ensure that worthwhile
projects are not lost?
(Con)
My Lords, as I have highlighted, the department is very happy to
speak to any project that sees that it is facing perhaps
unavoidable delays in delivery. Our first priority should be
looking at what we can do to reduce those delays, but, as I have
said, we have also put in place flexibility in the system to
extend some of the deadlines.
(Lab)
My Lords, will the noble Baroness tell the House how much damage
to levelling up is being done by the cancellation of HS2 to
Manchester? Is she aware that, once HS2 is built to Birmingham
but not to Manchester, it will take 40 minutes from Euston to
Birmingham but 2 hours and 10 minutes from Euston to Manchester?
What does she think that will do to business investment decisions
over the next generation, and does she not see that this will
decimate the economic prospects of the north of England?
(Con)
I am afraid I completely disagree with the noble Lord. There is a
choice to be made about where that investment goes, and the
Government have made the choice to invest in transport projects
that will connect towns and cities within the north far better.
It will deliver more improvements to more people faster than the
continuation of further legs of HS2.
(LD)
My Lords, is not the key finding of all this that centralised
Whitehall one-off bidding is not the key to level up across this
country?
(Con)
My Lords, we deliver funding to local authorities in all sorts of
ways. We are looking to deliver more funding to local
authorities. That is why we are taking forward an approach of a
single departmental settlement to those mayoral combined
authorities in Birmingham and Manchester. We have a commitment to
roll that out further to those areas that have directly elected
representatives.
(Lab)
My Lords, as the Minister knows, councils up and down the country
spent millions of pounds preparing for their application to bid
for the levelling-up funds. I am glad that the Government have
changed the system now. Do the Government have any idea how many
millions these cash-strapped councils have spent on preparing
their applications—or maybe the Government did not ask that
question because they did not want to know the answer?
(Con)
My Lords, after announcing round 2 of the levelling-up funding,
we recognised how many high-quality bids we had from councils
that we were not able to meet during that round. That is why we
took a different approach in round 3, looked at those existing
bids and were able to make the allocations that were announced
earlier this week. All in all, over 200 places have benefited
from funding from the levelling-up funds. We recognise that there
is a cost involved in bidding in these processes. That is why we
provided those local authorities that were assessed as most in
need in rounds 1 and 2 with additional funding to support the
development of the bids in the first place.
(LD)
My Lords, the Government have talked a lot about the need to
reduce bureaucracy and to cut the size of the Civil Service. Yet
this entire scheme is extremely bureaucratic and takes a great
deal of Civil Service time for the competitive allocation of very
small funds, and a great deal of local government time in
preparing for competitive bids, some of which are unsuccessful.
Has not the design been unfortunate? Would it not be better for
the Government to do something about devolving spending decisions
to local government in a much more thorough way?
(Con)
My Lords, as I have set out, we took a different approach in
round 3 of the levelling-up fund. Instead of having a competitive
process, we looked at the existing bids that we had. That is all
part of the Government’s funding simplification plan for local
government that we published last year, which looks at
streamlining the different forms of funding that go to local
government, while making sure that it is spent in the most
effective way, delivers value for money and that there is
accountability for what is spent.
