The PAC’s report finds that, of £10.47bn in total funding from central government, which must be spent between 2020-21 and 2025-26, local authorities have been able to spend only £1.24bn from the government’s three funds as of September 2023.

Furthermore, only £3.7bn had been given to local authorities out of the total allocation by the Department for Levelling Up, Housing and Communities (DLUHC) by December 2023.

In evidence to the PAC, DLUHC cited project-specific issues and the impact of the pandemic and inflation for a lower-than-anticipated level of spending to date.

The PAC is calling for six-monthly updates from DLUHC, both on the amount of money released to and spent by councils, and on the progress of projects themselves.

The report raises concerns that not enough was done by DLUHC to understand the readiness of schemes and the challenges facing local authorities before funds were awarded.

The PAC’s inquiry also found a worrying lack of transparency in DLUHC’s approach to awarding funds, with rules for accessing funding changing while bids were still being assessed, which was also not communicated in advance to councils.

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Dame Meg Hillier MP, chair of the committee at PAC, commented: “The levels of delay that our report finds in one of government’s flagship policy platforms is absolutely astonishing.

“The vast majority of Levelling Up projects that were successful in early rounds of funding are now being delivered late, with further delays likely baked in.

“DLUHC appears to have been blinded by optimism in funding projects that were clearly anything but “shovel-ready”, at the expense of projects that could have made a real difference.

“We are further concerned, and surprised given the generational ambition of this agenda, that there appears to be no plan to evaluate success in the long-term.

“Our report finds that the government is struggling to even get the money out of the door to begin with.

“The government has not helped the situation by changing the rules for funding mid-process, wasting time and money and hindering transparency.

“We will now be seeking to keep a close eye on DLUHC’s progress in unclogging the funding system. 

“Citizens deserve to begin to see the results of delivery on the ground.”