Background to the report

‘Levelling up’ is a government-wide approach to reduce geographical inequality in a broad range of economic and social measures across the UK.

Jump to downloads

The Department for Levelling Up, Housing & Communities (DLUHC) leads on three significant funds – the Towns Fund, the Levelling up Fund, and the UK Shared Prosperity Fund – which government’s 2022 Levelling Up white paper identified as supporting the levelling-up agenda by providing investment into local places.

Between them, these funds are worth up to £10.6 billion and aim to allocate £9.5 billion to local places to be spent by 31 March 2026.

Scope of the report

This report examines whether DLUHC’s three significant levelling-up funds are likely to deliver value for money. We have carried out our study at a relatively early stage in the lifecycles of the three funds so that we can identify lessons for securing value for money for the funds committed to date and inform decisions around future funding rounds. To reach our conclusions we considered whether:

  • the three funds have clear aims and objectives and have been designed and allocated as part of a joined-up approach
  • the three funds have been distributed in line with their objectives and if they are delivering projects as planned
  • DLUHC has an effective approach for the evaluation of the three funds

Conclusions

In 2021 DLUHC had a poor understanding of what had worked in its previous local growth programmes and was not well placed to manage the increase in grant-making required by its new £4.8 billion Levelling Up Fund and £2.6 billion UK Shared Prosperity Fund. However, more recently the GIAA has found that DLUHC has improved its oversight of its major levelling-up funds.

DLUHC was slow to agree funding across the Towns Fund, Levelling Up Fund and UK Shared Prosperity Fund. Towns Fund and Levelling Up Fund projects are experiencing delays, which has led to many projects needing to be adjusted or rescoped.

Projects are being delivered in the context of rising costs and pressures on public finances. Reflecting this context, DLUHC has taken steps to understand local authorities’ delivery challenges and is piloting a more flexible approach to move money between Towns Fund and Levelling Up Fund projects. However, at this stage it appears unlikely that local authorities will be able to complete projects by the original deadlines.

The ability of projects to deliver all their intended benefits will rely on DLUHC and local authorities working together to unblock those projects which are delayed or have not started and set realistic expectations for delivery.

DLUHC has made significant improvements in its approach to evaluation, which puts it in a better position to understand future impacts delivered by these funds. DLUHC has ambitious plans for the evaluation of each fund, has sought external input and is undertaking feasibility work before committing to final approaches.Most of this work is still to come and further funding will be needed to understand the effect of the projects over the longer term.

Equally important is that any high-quality learning from this evaluation work is shared with local decision-makers to support better value for money in future economic growth approaches.

To secure value for money and maximise the desired benefits from these funds DLUHC should review expectations for what outcomes can be delivered by when and support local authorities and their partners to deliver the long-term benefits for people in their local places.

Downloads

Publication details

Press release

View press release (17 Nov 2023)

Latest reports