Capital Projects: Spending Decisions

Baroness Scott of Bybrook Excerpts

Monday 20th February 2023 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

My Lords, with local government having lost £15 billion since 2010, communities up and down the country are desperate for investment. Unfortunately, many of the successful bids to the first round of the levelling-up fund are yet to put shovels in the ground because the impact of inflation has made construction unviable. Given that we are now told that the Secretary of State no longer has the authority to sign off spending, does the Minister expect local authorities to fill this funding gap themselves?

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

No, we do not expect local authorities to fill the funding gap. There has been an issue—that of inflation—across many of the programmes. There is no additional funding, but we are working with local authorities to ensure that local priorities can still be delivered. Where requests for rescoping are submitted, we are looking to deal with those flexibly, provided that the changes are still likely to represent good value for money. We are also providing £6.5 million of support for local authorities. We will be evaluating, and those evaluations will be made public.

[Baroness Pinnock (LD)]

My Lords, I remind the House of my relevant interests. The highly respected and independent Institute for Government wrote last month that the levelling-up fund

“is another ineffective competitive funding pot that is neither large enough nor targeted enough to make a dent in regional inequalities.”

Does the Minister agree? If not, what is wrong with that statement?

[Baroness Scott of Bybrook (Con)]

No, I do not agree. I think that a £9.9 billion investment into levelling up shows a Government who are putting their money where their mouth is. They are delivering levelling up across the country and will do so in future. They have already done so with the future high streets fund, the towns fund, the UK shared prosperity fund—which is about to come out—and even small funds such as the community renewal fund. These are all delivering things for people in this country.

[Lord Young of Cookham (Con)]

My Lords, on the issue of capital spending, three local authorities have made disastrous capital investments and are now having to raise their council tax by more than the cap in order to rebuild their balances. Should not they have been obliged to hold a local referendum to explain their imprudence to the local electorate, rather than blaming the Government for the increase?

[Baroness Scott of Bybrook (Con)]

I think my noble friend is speaking about the significant failures in Thurrock, Croydon and Slough. These authorities have asked the Government for flexibility to increase their council tax by an additional amount. Given the exceptional financial difficulties which, I have to say, were driven by poor decision-making in the past, the Government felt that we should not oppose their request. It is important that the councils remain working to deliver services, but I assure the House that we are working with them, challenging them, and have people in there to make sure that they improve and recover.

[Lord Hain (Lab)]

My Lords, is not the levelling-up money—whatever pots the noble Baroness mentions that there might be—pitiful compared with the £180 billion of austerity cuts taken mostly out of those local communities that need levelling up? Surely what is needed, rather than prettifying town centres and projects like that, is investment in local skills in the local economy to build the new economies of the future, to make these communities have some hope instead of despair.

[Baroness Scott of Bybrook (Con)]

My Lords, if you look at the missions in the levelling-up Bill, you can see that all those things are important. It is up to local authorities, though, together with the private sector and the voluntary sector, to put forward their ideas in their places, as to how they feel that they can deliver those improvements, such as economic investment in their area. It is up to local authorities—but I agree with the noble Lord that there are many more things that we can do in order to encourage, in those particular areas, a true economic development.

[Lord Trefgarne (Con)]

My Lords, can the Minister offer any advice to Woking Borough Council, where I live, which is more than £1 billion adrift?

[Baroness Scott of Bybrook (Con)]

I am very sorry to say to my noble friend that no, I cannot. I am sure that there are people within the department who will be working with that borough council in order to help it through its difficulties.