Devolve funding to boost housebuilding

December 29, 2016 / Isla MacFarlane
Devolve funding to boost housebuilding

Councils and businesses could boost housebuilding, create jobs and invest in new infrastructure if growth funding was devolved.

Research commissioned by the Local Government Association reveals £23 billion of growth funding is spread out across 70 funding streams managed by 22 government departments and agencies.

Councils warn this is creating a maze of complexity that is hurting the economy by creating significant delays in delivering projects and generating frustration.

The research shows that:

  • In most areas over 63 per cent of the funding streams have little or no connection to local efforts to drive growth and create jobs;
  • Some progress had been made as previous research from two years ago found over £22 billion across 120 funding streams managed by 20 government departments;
  • Areas with devolved deals fare better with influence or control over 47 per cent of funds, however each fund comes with its own objectives, timetables and rules.

The LGA, which represents more than 370 councils in England and Wales, is calling on the government to reform this inefficient and outdated system that channels funding for local growth through scores of separate pots and instead devolves money to local councils and businesses directly through a single investment fund.

For example, mainstream and re-engagement employment and skills funding totals nearly £10.5 billion yet is scattered across 20 different national schemes.

If the Government devolved the main employment and skills funding to local government, then councils will be able to develop a single, place-based strategy which is based on the needs of people rather than separate institutions.

Cllr Mark Hawthorne, Chairman of the LGA’s People and Places Board, said, “Millions of pounds and hundreds of days of officer time are tied up just trying to access vital growth funding.

“This is proving completely counterproductive to our efforts to create jobs, build homes and develop the infrastructure we need to get our economy growing.

“The current system, which requires millions of pounds of public money to be spent on bidding for funds from the public purse, creates uncertainty for businesses and investors. Councils and businesses want to spend this money on improving the economy, not reams of costly bureaucracy.

“Local economies are complex and national funding streams are not as coordinated, flexible and responsive as we need them to be in order to get projects off the ground in good time.”

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