The Department for Levelling Up, Housing & Communities (DLUHC) has allocated £9.5bn across three major funds to support local government initiatives
However, a recent report by the National Audit Office (NAO) revealed that projects are behind expected progress, and local authorities are unlikely to meet the original deadlines.
The Towns Fund and Levelling Up Fund, designed to support local projects, have experienced delays, with some projects yet to start or on hold as of March 31, 2023. Of the 1207 projects, only 64 were completed, and 76 are yet to begin.
DLUHc targets unlikely to be met
According to NAO, the delays and associated delivery risks have meant that the DLUHC’s initial deadlines are unlikely to be met, with significant proportions of construction contracts unsigned for Levelling Up Fund projects scheduled for March 2024 and 2025.
NAO’s report assessed DLUHC’s efforts across three funds: the Levelling Up Fund (£4.8bn), the UK Shared Prosperity Fund (£2.6bn), and the Towns Fund (£3.2bn), totalling £10.6bn. The report also argued that while the funds have common investment themes of regeneration, culture, and transport, the DLUHC distributed funding in a way that makes it challenging for local authorities to align their plans.
The DLUHC has donated £9.5bn to support over 4,300 projects in the UK between 2020 and 21 and 2025 and 26. However, delays in the project delivery have prompted an extension of the original deadlines. By the end of March 2023, £2bn had been distributed to local authorities, with £0.9bn spent across all three funds.
Inflation, skills shortages, and challenges in the construction industry likely caused project delays. Departmental decisions, including delayed funding announcements, led to local authorities delaying their work.
What has caused the delays?
According to NAO, communication issues, such as the timing differences between Levelling Up Fund bids and Town Deals offers, have hindered effective planning.
The DLUHC say they are working to improve project delivery by simplifying the process for local authorities to make changes to ongoing projects and testing a more flexible funding approach. The Department also provides £65m in support for local authorities managing Levelling Up Fund projects.
Although the DLUHC has made progress in evaluating funds, the NAO suggests that the Department should specify additional actions if projects cannot meet existing deadlines. This might involve adjusting expectations considering the increasing cost pressures.
“DLUHC is in a better position to understand the benefits these funds deliver following significant improvements in its approach to evaluation. But the department and local authorities will need to work together to unblock projects which are delayed or have not started and set realistic expectations for delivery,” said Gareth Davies, head of NAO.
“It is important that DLUHC shares the insights from its evaluation work with local decision-makers to help them achieve better value for money and reduce regional inequalities by improving the places people live,” he concluded.
