Fragmented funding for local growth 2016/2017

In 2014, Shared Intelligence worked with Local Government Association (LGA) to undertake research into the funding landscape of the coalition government. The report was written in light of the LGA’s Rewiring Public Services: Rejuvenating Democracy campaign in which ambitious proposals were presented to give local areas greater control over public money. This report was published under the title Fragmented Funding. Following the changes to the government and priorities in 2016, Si and the LGA updated the analysis of central government funding streams for local economic development and regeneration. In addition to the 2014 report, we considered the ability of local authorities to influence funding streams at a local level, gauging the level of devolved power and input to designing the required solutions to local issues.

An immediate issue when refreshing the 2014 work was that was discontinued after the 2015 General Election. Access to the detailed departmental budgets that existed before was therefore restricted. The updated report used transcriptions and supplementary documents from the 2015 Autumn Statement and 2016 Budget, along with the new Single Departmental Plans to add new funding streams. There remained live funding streams which lacked financial information, meaning they could not be included in the overall analysis.

After obtaining the data for funding streams we gave each funding stream a RAG rating. We offered two ratings, one for devolved deal areas by March 2016 and one for England excluding devolved areas. The criteria used was:

– Red: Limited or no involvement in the funding process. Local authorities may either be consulted or able to set out a wish list but ultimately it is up to government to design the scheme.

– Amber: Local authorities have some involvement with the responsible department to influence the funding process, on what the funding can be spent on, and policy from inception but the money is held by government. It includes co-designing and co-commissioning but no option to pool funding.

– Green: Fully devolved/full financial devolution to local authorities. Funds can be a competitive process and green if local authorities can spend the funds without restrictions.

Headline figures included:

– 70 live funding streams, totalling £23.5bn;

– 11 delivery agencies and 11 government departments responsible for the 70 funds;

– A breakdown of the funding streams by RAG rating;

RAG rating Devolved areas Rest of England
Red 37 42
Amber 23 19
Green 10 6

During the time that has passed since the report was written a lot has changed. Britain voted to leave the European Union, Theresa May became Prime Minister and Philip Hammond was appointed Chancellor (and then abolished the Autumn Statement). Although the new administration has re-affirmed its commitment to devolution, the new Industrial Strategy should give more clues on the future approach to achieving a more integrated system for local economic development and regeneration. Responding to the November 2016 Autumn Statement, Cllr Martin Tett, the LGA’s Economy spokesman, said:

“Its Industrial Strategy is a real opportunity to bring together fragmented national growth-related funding schemes in a way that gives local areas the power to target funding at projects that will benefit local people and economies”.

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