Treasury to approve all capital project spending by DLUHC

The Department for Levelling Up, Housing and Communities (DLUHC) will now require Treasury approval for capital projects.

This comes after increasing doubts about the department's delivery of the flagship Conservative policy and its current ability to reduce regional economic divides.

According to the Financial Times, chief secretary to the Treasury John Glen has prevented DLUHC from signing off spending on any new capital projects.

Led by Michael Gove, the DLUHC has overall responsibility in central government for local authorities’ funding. It has been under scrutiny since the National Audit Office's February 2022 Report, Supporting local economic growth, found:

"DLUHC had a poor understanding of what had worked well in its previous local growth programmes because it had not consistently evaluated them. Contrary to HM Treasury guidance for evaluations (the Magenta Book), DLUHC had
not systematically assessed whether individual policies had achieved their aims and could not say which have been most effective. Instead, it had built its evidence base for local growth by drawing largely on external sources."

"DLUHC had not consistently applied lessons and key policy principles from its own research or from external scrutiny to the design of its new local growth interventions. DLUHC provided limited evidence that it had designed the current interventions using robust evidence about what works best to stimulate local economies."

"The way the interventions currently work makes it hard for local authorities to plan the joined-up investment strategies that DLUHC’s research suggests are needed to promote local growth. Multiple funding pots and overlapping timescales, combined with competitive funding, create uncertainty for local leaders."

Department for Levelling Up, Housing & Communities; Departmental Overview 2021-22

A Government spokesperson said: "The Government’s central mission is to level up every part of the United Kingdom by spreading opportunity, empowering local leaders and improving public services.

"DLUHC will continue to deliver its existing programme of capital projects as planned."