Gove announces simplification of levelling-up funding for councils

Mr Gove said all local authorities that have Towns, Levelling Up and Future High Streets funding will also have “more flexibility” over their projects, “free to make output, outcome and funding changes up to a threshold of 30% without needing to seek any departmental approval”. 

It follows the commitment in the Levelling Up White Paper to deliver a more “transparent, simple, and accountable approach to funding”.

The government is also changing how it provides growth funding to councils, with Mr Gove pledging a move away from competition to allocation. 

He said: “I do believe that an element of competition in the allocation of funds can help encourage innovation, but you can have too much of a good thing.

“From next year, all departments must consider whether they can use existing funds to deliver new money or can use an allocation methodology to distribute it rather than launching another new competition. This must be done before any new fund is launched. And where we can improve existing fund allocation we will. 

“So we will take a new approach to the next round of the Levelling Up Fund. We have heard your concerns and will announce further details shortly.”

By reducing administrative burdens, this plan will support local authorities to maximise their return on spending, generating the best outcomes for communities, he said.

The plan includes three main phases. First is the immediate simplification of existing funds, followed by a new ‘funding simplification doctrine’ that will require departments to strive for a “simpler and more streamlined” way of delivering funding to councils, including considering allocative distribution approaches.

The third involves reforms to be implemented at the next Spending Review, including multi-year, single departmental-style funding settlements for the mayoral combined authorities.