Watchdog puts Towns Fund selection process under spotlight

The selection process behind the government’s £3.6bn Towns Fund has been put under the spotlight in a new report by the National Audit Office (NAO) report.

The watchdog published a report yesterday (21 July) after concerns of a lack of transparency were raised by opposition MPs.

The government first announced the £3.6bn Towns Fund in July 2019.

In September, it published the list of 100 places that would be invited to develop proposals for the Fund.

The shortlist included 42 places across the Northern Powerhouse and 33 places in the Midlands Engine, including Blackpool, Doncaster and Middlesbrough.

According to the NAO report, an initial assessment of all 1,082 towns in England was drawn up by officials at the Ministry of Housing, Communities and Local Government.

‘Officials provided ministers with information on towns in a prioritised and ranked list, and suggestions on other factors they might consider in their selection,’ the report states.

The watchdog found that officials at the Whitehall department assessed there were 541 towns across England potentially eligible for Town Deal.

The officials then divided the 541 eligible towns into high, medium and low-priority groups.

A total of 40 towns were placed in the high priority group.

‘They were not the 40 towns with the highest scores across the whole of England because the aim was to identify high-priority towns in each region of England,’ the report notes.

A further 181 towns were categorised as low priority, and the remaining 380 were classed as medium priority.

Officials recommended to ministers that all 40 high-priority towns be selected to bid for funding, and that no additional explanation for their selection was required.

When it came to medium priority towns, officials recommended ministers select up to 60, depending on how many low-priority towns they chose, to bring the total number of selected towns to 100.

And rather than ruling them out entirely, officials left it open for ministers to select towns for Town Deals from the group of 181 low-priority towns.

Officials recommended that ministers choose relatively few low-priority towns and record a strong rationale for any selected.

In the end, ministers selected 49 medium-priority towns and 12 low-priority towns.

‘Ministers’ selections resulted in towns being selected with lower scores than some other towns that were not selected,’ the report adds.

‘Officials concluded that the overall selection was acceptable because ministers had selected all 40 high-priority towns and provided a rationale for each of the towns selected from the medium- and low-priority groups.’

In response, a MHCLG spokesperson said: ‘The government’s £3.6bn Towns Fund will help level up our regions by supporting towns to raise living standards and build prosperous futures.

‘As set out in the report the Department put in place a robust process to identify towns for Town Deals, which ministers followed throughout. The selection criteria was set by officials and took into account a range of factors including income deprivation, skills, productivity and investment opportunities. We will deliver on our commitment to level up the country.’

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