13.The Department told us that it had not completed its analysis of the 13 plans submitted by the first cohort of towns but its early impressions of the quality of the plans and the range of interventions proposed were positive. It described how it was assessing town investment plans against local need, including the extent to which the plans show that towns have started to put together the partnerships they will need to deliver their plans successfully.
14.Given our concerns in the past about the Department’s failure to put in place quantifiable objectives to help it measure the impact of its interventions on local economic growth, we asked the Department how it intended to approach this for the Towns Fund, to properly measure impacts such as job creation and improved wellbeing. The Department explained that it hopes its monitoring regime will measure outcomes that gauge improvement in the health and vitality of towns. The Department expects outcomes to depend on the nature of each project, but it wants to be able to look at a basket of measures at three different levels: the project level, the town investment plan level, and the overall programme level. It outlined how it plans to monitor the impacts of the Towns Deals on employment, income and wellbeing against the baseline of what is happening in those towns and, in due course, compare the performance of towns that have benefitted from the Towns Fund with other, similar towns.
15.The Department told us that it is looking to probe each project to gauge how convinced it is that towns can deliver their plans successfully, and that it will build in robust monitoring and evaluation processes from the start, agreeing key outputs and outcomes such as jobs created and footfall before projects begin, and tracking them every six months. It has developed a prospectus and guidance which sets out a list of possible measures including jobs created, footfall, qualification levels, levels of private investment and commuting times. The Department told us that it wants the measures, when chosen, to mean something to local people. As an example, it cited how it is considering how it can reflect and measure sustainable, rather than short-term, employment. But we remain concerned that the Department could only set out to us in general terms how it might monitor and evaluate the impact of the Towns Fund; the detailed measures are still to be developed.
16.The Department’s rationale for opting for “a deals-based approach” to funding, rather than a competitive bidding process, was because towns most in need of investment would have been disadvantaged in a competitive bidding process due to a lack of leadership, resources or experience of dealing with government departments. The Department explained that a deals-based approach to selection enabled it to provide advice and support to help towns develop their bid and build capacity. With this in mind, the Department allocated around £14 million of “capacity funding” to towns that are eligible for the Towns Fund, to support them in developing their plans. The Department cited project management as an example of a common area where towns would need some help.
17.The Department further told us that it had entered into a contract worth around £8 million with Arup, a professional services company, to provide towns with specific expertise in areas such as real estate valuation. The Department described the efficiency benefits it envisages in such an arrangement, whereby towns will access consultancy services centrally so that they do not have to look for that consultancy support separately.
18.The Department told us that it is working at pace to agree the funding that will be available for the 13 towns in the first cohort and would like to be able to make decisions in October. But the Department did not want to guarantee it would meet that deadline and warned that it could take up to 12 months to agree business cases and issue final approvals before projects can begin. The Department told us that, while it would like to see as many projects as possible happen as quickly as possible, given the nature of construction projects and minor infrastructure works, if they are to happen robustly and safely, it would be some time before we see many projects on the ground.
19.The Department has developed a funding profile for the Towns Fund over the next four financial years but does not know yet whether it aligns with towns’ individual investment plans. The Department explained that it wants the profile of funding over time to be led by what works in terms of project delivery and that, as part of its assessment process, it wants to properly understand the profile of the individual projects that towns have put forward. Once it has this understanding, it will consolidate it at programme level to see if the funding profile is appropriate. However, the Department explained that the availability of this information requires towns to draft individual business cases for each project and that it would probably be well into next year before it had detailed financial profiles across the individual towns, and then at programme level.
20.The £3.6 billion Towns Fund has three separate strands of funding comprising:
21.The Department confirmed that, despite the impact of Covid-19 on government spending plans, the £3.6 billion funding allocated to the Towns Fund is secure. It told us that it had no plans to do anything other than continue with the Towns Fund and to deliver the fund in a way that maximises the long-term economic growth and productivity of the towns.
22.We asked the Department whether, given the scale of change happening, it will bid for higher levels of funding to support the Future High Streets Fund. It explained that, as many of the towns that are eligible for Future High Streets funding are also eligible for Towns Fund funding, it will probably want to take a view on the Towns Fund as a whole and these two elements of it before deciding what the right level of future funding would be.
23.The Department told us that many of the bids are aligned with other funds, both from central and local government, and highlighted the importance of aligning the Towns Fund projects with other interventions. But the specific aims of the Towns Fund and how it fits with other, similar programmes of government funding remain unclear.
24.A consistent theme highlighted in the town plans that the Department has seen so far is the impact of Covid-19, leading towns to think about a more diverse range of uses for the high street. The Department told us that its guidance steers towns to think carefully about investments that increase retail space in towns, given that Covid-19 may have accelerated some of the challenges for the high street. The Department shared with us some example projects such as Darlington’s plan to expand the provision of T-levels and build a new centre to teach T-levels in town, and the repurposing of retail space as a library in Margate.
25.How the impact of Covid-19 will influence decisions about how the Department allocates the Towns Fund is unclear. Whether towns that have been adversely affected by Covid-19 will have a greater likelihood of selection, or whether events may mean that some of the plans set out in winning bids are now less of a priority, is still to be determined. The Department told us that it will help towns to meet the challenges of Covid-19 by giving towns with exceptionally good and well-evidenced plans more than £25 million, the original maximum funding limit, and that towns that have been more adversely affected by Covid-19 may have a greater likelihood of securing funding.
26.The Department explained that because of Covid-19 and the recent demands that have been placed on local government, the private sector and other members of the Town Deal Boards, it has left towns and the Town Deal Boards to determine which wave of funding they wanted to work towards. While the Department wants to maximise private sector co-investment, the impact of Covid-19 may reduce the ability of towns to secure match funding from other sources.
27.The Department has brought forward £80 million of the Towns Fund, with each eligible town receiving between £500,000 and £1 million for projects that will make a difference to the area, such as new green spaces, the creation of pop-up businesses spaces, pedestrianisation of streets to encourage walking or cycling, and creating new community hubs to support those living alone. The Department told us that towns have told it what kind of immediate measures they may be able to take in this financial year, and the brought-forward funding will support them in this.
30 Qq 60, 72–73
31 Q 60
32 Qq 85–86
33 Q 88
34 Qq 85–86
35 Qq 60, 85
36 Q 85
37 Q 88
38 Q 34
39 Q 63
40 Q 63
41 Qq 76, 92
42 Q 92
43 Qq 79–80
44 Qq 80–81
45 C&AG’s Report, para 1.2
46 Qq 33, 57
47 Q 28
48 Qq 74, 91
49 Q 67
50 Qq 68–70
51 Q 77
52 Q 74
53 Qq 27, 75;
54 Q 27
Published: 11 November 2020