Senior officials at the Department for Levelling Up, Housing and Communities have been subjected to new complaints about the management of the government’s controversial Levelling Up Fund, in which areas bid to get government support for flagship regeneration projects.
Members of parliament’s Public Accounts Committee have previously criticised DLUHC’s oversight of the fund because its rules allow ministers to finalise the principles for selecting winners with the knowledge of which schemes – and local areas – will benefit as a result.
After a new tranche of 111 projects was awarded a combined £2.1bn in the second round of Levelling Up Fund allocations last week, it emerged that some local authorities had unknowingly wasted their time and money on bids that would not succeed because of rules ministers subsequently introduced.
Committee chair Dame Meg Hillier told DLUHC perm sec Jeremy Pocklington and director general for regeneration Emran Mian the situation represented a significant escalation of MPs’ original concerns about the lack of transparency over the principles by which winners would be chosen.
“You’ve done almost egregiously worse this time by saying ‘if you won in round one, you don’t win in round two’,” Hillier said at Monday’s session.
“That wasn’t clear at the time that they bid, so they wasted time and money bidding for a round two bid when they’d already won in round one.”
Mian said that the Levelling Up Fund’s second round had been significantly oversubscribed, with more than 500 applications.
“There were difficult choices to be made,” he said. “What we said in the prospectus was that one of the considerations that ministers would take into account was previous investment – previous government investment – in an area. But equally, the spread of successful projects across the country.
“As a consequence of both of those considerations, ministers ultimately decided – and we’ve said this in the explanatory note – not to allocate funding to places in round two that were successful in round one.”
Hillier said ministers had only decided on the rule to exclude first-round winners after local authorities had already submitted their round-two bids.
“You can put in as many words as you want that you’ll take into account previous investment, but if it’s a very good project that’s desperately needed that doesn’t stop people putting the bid in,” she said.
“And they did put the bids in. But it became apparent very quickly after they put the bids in that they would not be successful.”
Mian was asked for information on the amount of money local areas had spent on preparing their Levelling Up Fund bids. He said bidders did not need to provide that information to DLUHC.
After the Levelling Up Fund’s round-two winners were announced last week, Conservative mayor of the West Midlands Combined Authority Andy Street described the process as a “broken”. Former Department for Exiting the European Union perm sec Philip Rycroft said the system of allocating regeneration funding from Whitehall was “crackers” and called for it to be devolved.
DLUHC perm-sec Pocklington was asked on Monday whether he agreed.
“I don’t agree with those statements,” he said. “The department is continuing to take action, as is the government, across the missions for levelling up.
“As a result of the actions we’ve taken, over 50% of the population now has a devolution deal. We’ve made considerable progress on that over recent months.”
He added: “In the department, we’re continuing to deliver our funds.”