MPs warn of slowdown of projects amid concern at Treasury delegation on capital spend at Department for Levelling-Up, Housing and Communities

The Chair of the Levelling Up, Housing and Communities Committee, Clive Betts MP, has written to the Levelling-Up Minister, Dehenna Davison, to raise concerns about the Treasury’s involvement in “signing off capital spend” at the Department for Levelling-Up, Housing and Communities.

The letter highlighted a 7 February article in the Financial Times which reported that the Department had been “banned from making spending decisions on new capital projects”.

Following an Urgent Question in the House of Commons Chamber, Lee Rowley MP, Parliamentary Under Secretary of State, acknowledged that the Department was now working “within a new delegation approach” which involved “sign off with Treasury on capital spend”.

The LUHC Committee has been undertaking an inquiry into the funding for levelling up, an area which will likely be impacted by this change, it suggested.

In the letter, Betts asked DLUHC to provide information in relation to the following questions:

1. What types and definitions of capital spend are included in this new delegation approach?
2. How and to what extent will this change impact current projects in receipt of funding or due to receive funding from the Department. Additionally, will these funds still be delivered to recipients and in a timely manner?
3. Will this impact the future of funding pots such as the Levelling Up Fund, and will the Department have the final say over the amount and final allocations of the fund?
4. What specific concerns were raised by the Treasury about the Department’s ability to deliver value for money?
5. Did the Treasury raise any other concerns prior to taking this decision?
6. What is the impact of this additional administrative burden on the Department’s day-to-day operations?

The committee chair said: “The Treasury no longer appears to trust the Department for Levelling-Up to spend money without Treasury approval. This change raises very real concerns about what this means for the Levelling-up Department and its policies.

“How will current projects be affected? Will councils still receive the monies on time? How will funding pots such as the Levelling Up Fund be affected?

“The Government should also spell out publicly the concerns which were raised about the Department’s ability to deliver value for money.”

A Government spokesperson said that "taxpayers rightly expect the government delivers good value for money, which is why we have a robust spending control framework".

They said the controls were a normal aspect of government finance and helped ensure departments were delivering effectively. The Treasury also retained a central role in overseeing departmental expenditure, they added.

The spokesperson said: “The Government’s central mission is to level up every part of the United Kingdom by spreading opportunity, empowering local leaders and improving public services. DLUHC will continue to deliver its existing programme of capital projects as planned.”

Lottie Winson