Levelling up department has ‘wasted opportunities’, report from NAO warns

The department has committed billions before learning the lessons from past investments, the analysis says.

02 February 2022

The Government’s levelling up department has ignored Treasury guidance on how to ensure its policies are working before committing £11 billion to spend in communities across the country, a new report has warned.

Officials and ministers have “wasted opportunities” to learn lessons from past investments, and relies on EU-funded research for many of its assessments, the National Audit Office said.

Despite committing £11 billion to try to regenerate towns and communities, the Government has “limited understanding” of what has worked well.

The Department for Levelling Up, Housing and Communities (DLUHC) has “wasted opportunities to learn lessons,” and relies on others to do its research.

“It does not know whether previous policies achieved their aims,” the auditors said on Wednesday.

“Instead, it has built its evidence base for what works in local growth by drawing largely on external sources such as academic studies and evaluations conducted on place-based funding from the European Union.”

The report also shows that at the blessing of the Treasury, the department has cut corners in developing a proper plan for the £4.8 billion Levelling Up Fund.

Instead of going through the normal three-stage process to design a business case for the fund, the department produced a report that did not properly explore the alternatives.

The Treasury said that it had taken this decision because its officials had already been heavily involved in how the proposals were developed. They also built on funds that had already been in place before.

“While there may have been good reasons to move quickly, bypassing the earlier stages of a business case review limits the amount of scrutiny and independent challenge,” the NAO said.

Public Accounts Committee chair Meg Hillier said: “Today’s report again shows a worrying lack of evaluation about what works and what doesn’t when it comes to spending taxpayer money. It means Government is left scratching its head about the best way to try and level up society.

“Understanding the likely effectiveness of public spending is vital to ensure money goes to those people who need it most. However, the NAO report shows inadequate evidence and limited scrutiny when developing the £4.8 billion Levelling Up Fund.

“Government has simply turned on the taps without really knowing where to direct the hose.”

A spokesman for the department said: “This report does not take into account any of the raft of measures published today in our landmark levelling-up white paper, setting out a blueprint for how we will reverse this country’s geographical inequalities, spread opportunity and transform communities across the UK.

“To deliver change on this scale we will take a radical new approach to decision-making, delivering clearer, fairer funding and unleashing a data revolution to help us understand what works.”

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