Whitehall isn’t working

Like ships in the night, the rhetoric and reality of this policy agenda sail past each other once again, with the government seemingly unwilling to learn the lessons from past mistakes.

“the PAC report did not pull any punches”

The PAC report did not pull any punches: ministers decided the principles for awarding the funding only after they’d seen the applicants; there was no transparency about the location and type of unsuccessful bids; local councils’ time, capacity and precious resources have been wasted repeatedly as they’ve attempted to make sense of a kneejerk policy agenda directed from the centre. Despite the billions that have been spent, the government are still no closer to understanding what impact their money has had or indeed, what they should be spending future money on in order to address the regional inequality that marks the UK out as a considerable outlier amongst OECD countries.

“a degree level textbook for economic policy development”

The PAC’s recommendations read like a degree level textbook for economic policy development: be clear about what outcomes you are trying to achieve; develop some indicators so that you know your investment is working; consider the evidence about what can be learned from past efforts to deliver the desired outcomes. The fact that ministers and civil servants aren’t even getting to basecamp on some of these foundational questions shows a contempt for the communities who are supposed to be benefiting from this investment as well as a disregard for the accounting of public money. All £11bn of it.

And arguably, that £11bn doesn’t even replace the money that was taken from local government during the decade of austerity, a figure which has been estimated at £18bn between 2010 and 2019. It’s painfully inadequate given the real and growing need for economic change in communities all across the UK in the wake of Brexit, Covid-19, inflationary pressures and the environmental crisis.

“levelling up was never anything more than an electoral strategy”

And what is even more depressing about the conclusions of the PAC is that they confirm our worst fears – that levelling up was never anything more than an electoral strategy and the announcements on funding were simply headlines to provide window dressing for a press release. And of course, you cannot read the conclusions without worrying about how little of this has been taken on board in respect of the UK Shared Prosperity Fund, the prospectus for which was published before the PAC report.

But this report also highlights a real failure on the part of the Treasury to give a damn about levelling up. They seem to have been content to allow DLUHC to make a meal of it so that they could say “told you so” and dig up some trope about how investing money in local economies is just jam spreading.

It could have been different. £11bn is not an inconsiderable sum of money. Instead of holding the purse strings at Whitehall and completely failing to establish clarity of purpose, this money could have been delegated to combined and local authorities for the long term. That’s what is really needed to address regional inequality.

“it could have been different”

The money could have been spent encouraging and facilitating creativity and innovation at the local level, building on the relationships that local authorities have built with partners in the third and private sector during the pandemic. It could have laid the groundwork for investment in key sectors such as health and social care as the basis of a stronger and more resilient foundational economy. Local areas might have been able to use it to make wealth work differently in their communities – for example, by focusing less on inward investment and more on support for local small businesses and social enterprises who have chosen to invest locally, to provide decent work and opportunity to their employees and to innovate in order to meet the challenges of our time such as net zero and digital transformation.

£11bn, not exactly down the drain, but as the PAC report shows, certainly not going where it is needed most. What hope now, for the Shared Prosperity Fund, or whatever headline grabbing fund this government next dreams up? One thing is clear – the way we disperse funds to our communities needs a radical review.