History and context
The Upgrading Fund brings together the Department for Transport (DfT), the Department for Upgrading, Housing and Communities (DLUHC) and Her Majesty’s Treasury (HMT) to invest £4.8 billion in high-value local infrastructure across the three transport investment themes; Regeneration of the city center; and cultural. The Fund was first announced during the 2020 Spending Review, with the first round launching on March 3, 2021. All regions of the UK can access the Fund, with local authorities in Britain eligible for to apply. In Northern Ireland, given the different landscape of local authorities, a range of candidates from the public and private sectors are eligible to apply. The DfT and DLUHC share responsibility for the Fund’s Accounting Officer, with the DfT responsible for Majority Transport Projects and the DLUHC responsible for Majority Town Center and Regeneration and Culture Projects.
The result of the first round of the Leveling Up Fund was announced on October 27, 2021, allocating around £1.7 billion to 105 projects across the UK. The first round provides over £170m in funding to Scotland, £120m to Wales and £49m to Northern Ireland.
Building on the success of the first round, the second round of the Fund was launched in March 2022 and will continue to invest directly in communities across all regions of the UK.
Assessment against accounting administrator standards
There is no regularity issue as the department holds the power to award grants to successful applicants across the UK through the new financial assistance powers of the UK Internal Market Act 2020.
My assessment is that the regularity test is satisfied.
The advice covered a number of key areas, including decision-making and recusal arrangements, and the allocation of capacity funding to help local authority applicants develop high-quality bids.
A publication assessment framework was used by officials, with moderate evaluation scores to ensure consistency and indicating that only shortlisted offers were considered by the three decision-making ministers (the Chancellor of the Exchequer, the Leveling Secretary and the Deputy -Parliamentary Secretary of State for Transport (on behalf of the Secretary of State for Transport) An equality impact assessment was undertaken and submitted to ministers before decisions were finalised. the decision-making process can be found in the Explanatory Note to the Leveling Fund.A published list of successful applicants is available.
Appropriate provisions for recusal, which would see ministers recuse themselves from any decision that might affect their constituency, were also considered in the advice, but no recusal was necessary.
My assessment is that the ownership criterion is met.
Value for money
Value for Money (VfM) considerations have been integrated into FUL’s assessment and decision-making frameworks. LUF’s value for money assessment considered monetized and non-monetized benefits, and that these assessments were subject to moderation. To ensure value for money, only the highest-scoring offers and those that scored average or above in terms of value for money, strategic fit and deliverability were shortlisted.
When considering bids to be funded from Britain’s shortlist, decision-making ministers agreed to give priority to bids in general which scored at least 75/100 to give priority to bids from the highest quality but ensuring a fair distribution of successful projects across Britain, and across the 3 investment themes. In Scotland and Wales, two projects were selected which scored below 75/100 but still the high quality bar of 70/100. In Northern Ireland, in order to prioritize a strong allocation for the country, all shortlisted offers were selected except for two which were excluded due to deliverability issues. Further details are provided in the published explanatory note.
To further safeguard value for money, the reporting and evaluation requirements imposed on grant recipients will help monitor the achievement of expected outputs and outcomes. Further details on this are presented in the published LUF monitoring and evaluation strategy.
My assessment is that the price-performance ratio test is satisfied.
There were some feasibility issues, particularly around the evaluation of LUF offers given the potential number of applicants. We have therefore indicated that the Ministry is seeking additional administrative budget from HMT to expand its organizational capacity to manage this process. The department received additional funding of £12.3 million for the 2021-2022 financial year for a number of new upgrade funding schemes, including LUF.
Following the detailed evaluation of the bids (including deliverability), DLUHC concluded that delivering 105 projects in this first round is feasible and that the learning can be used to inform the process for subsequent rounds.
My assessment is that the feasibility test is satisfied.
The above represents a summary of the key points that informed my decisions. If any of these factors change materially during the life of this project, I undertake to prepare a revised summary, setting out my assessment of them.
This summary will be published on the government website (GOV.UK). Copies will be deposited in the Library of the House of Commons and sent to the Comptroller and Auditor General and Treasury Accounts Officer.
May 26, 2022