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Just 10 per cent of the money intended to regenerate local areas in the UK under the government’s levelling up programme has been spent so far, a parliamentary spending watchdog has warned.
The Department for Levelling Up, Housing and Communities could not provide “any compelling examples of what had been delivered so far”, according to a report published by the House of Commons public accounts committee on Friday.
By December 2023, Whitehall had provided a little over a third of the available £10.47bn to councils, it concluded.
Committee chair Dame Meg Hillier called the delays “absolutely astonishing”. She added that “the vast majority” of projects that secured funding early on “are now being delivered late”, with further setbacks likely “baked in”.
The committee scrutinised the progress of the Levelling Up Fund, Towns Fund and the UK Shared Prosperity Fund since 2020. The pots comprise £10.47bn for economic development projects, as part of the government’s drive to narrow regional socio-economic divides.
It found just 64 of more 1,100 projects have so far been finished, while more than 80 per cent of those due for completion this month will miss that deadline.
Of the £3.7bn that had been allocated, only £1.24bn — or 10 per cent — had actually been spent.
It also recognised recent attempts by the department to evaluate the programme’s success but said it was “concerned it has no long-term plans to measure the impacts” of the funds.
While the government has blamed the Covid pandemic and inflation for delays across the programmes, MPs criticised their design and warned Whitehall had prioritised supposedly “shovel ready” projects that had subsequently turned out to be more complex.
The funds have long attracted criticism for overly centralising economic development expenditure and placing unnecessary burdens on councils facing a sustained funding squeeze.
Three quarters of more than 800 council applications to the first round of the Levelling Up Fund were rejected, with each bid costing an average of £30,000, according to the Local Government Association, the body that represents local authorities in England and Wales.
The department has since taken steps to simplify the programme for councils, but the committee found there was “more to do”.
Successful project bids have also grappled with the impact of inflation, particularly in the construction sector, as well as supply-chain shortages, meaning the government has extended many delivery deadlines.
The levelling up department, which oversees the programme, appeared to have been “blinded by optimism” in funding projects that were far from “shovel ready”, Hillier said.
The levelling up department has been contacted for comment.
