Inquiry raises concerns over how £3.6bn towns fund was distributed

Watchdog says process was ‘not impartial’ and decisions were ‘politically motivated’

Rajeev Syal

An inquiry by parliament’s spending watchdog into how ministers distributed £3.6bn to help deprived towns has raised serious concerns that funding decisions were politically biased.

The cross-party public accounts committee said it was “not convinced by the rationales for selecting some towns and not others” when the towns fund was distributed by the Ministry of Housing, Communities and Local Government, (MHCLG) last year.

Justifications offered by ministers for selecting individual towns were “vague and based on sweeping assumptions” and raised concerns over the decisions being politically motivated, the committee said.

The highly critical report comes after the communities secretary, Robert Jenrick, earlier this year denied having any role in selecting his constituency, Newark, for a £25m grant under the scheme, despite having boasted about it during last year’s general election.

Jenrick said the award had been signed off by the then communities minister Jake Berry, while he had approved a grant for Darwen in Berry’s constituency.

Meg Hillier, chair of the committee, said the system gave “every appearance of having been politically motivated”.

“MHCLG must be open and transparent about the decisions it made to hand out those billions of pounds of taxpayers’ money, and what it expects to deliver,” she said.

The scheme was originally launched “at pace” in July 2019 to support struggling towns across England.

Officials in the department then drew up a ranked priority list of 541 towns based on need and potential for development for ministers to select from.

While the top 40 “high priority” locations were all confirmed, ministers then picked another 61 “medium and low priority” communities from across the rest of the list including one ranked just 536th.

Although the department was supposed to record the “rationale” for choosing some towns and not others, the committee said it was “not convinced” by some of the reasons given. “The selection process was not impartial,” they concluded.

The committee also complained that the reasons given by the department for not publishing more information about the selection process were “weak and unconvincing”.

It said concerns had been heightened by press statements which wrongly claimed the National Audit Office had concluded that its procedures were “robust”.

While the department’s permanent secretary, Jeremy Pocklington, said he was satisfied the requirements of “propriety and regularity” had been met, the committee said it was “disappointed” that a summary of his assessment remained unpublished.

“This lack of transparency has fuelled accusations of political bias in the selection process, and has risked the civil service’s reputation for integrity and impartiality,” it said.

The MHCLG responded to the report with a statement rejecting the main conclusions. A spokesperson said: “We completely disagree with the committee’s criticism of the town fund selection process, which was comprehensive, robust and fair.

“The towns fund will help level up the country, creating jobs and building stronger and more resilient local economies.”