Distribution of £3.6bn towns fund may have been 'politically biased', inquiry says
Funding decisions for a flagship Government scheme to plough £3.6 billion into deprived towns may have been politically biased, MPs have warned.
The cross-party Commons Public Accounts Committee has raised concerns over the towns fund, which saw 101 places including five Black Country towns, Wolverhampton and Telford lined up for cash to help with regeneration schemes.
In a new report, the committee said the way places had been picked was "not impartial" and risked undermining the integrity of the Civil Service. Towns had been selected on the basis of "scant" evidence and "sweeping assumptions", it added.
Committee chair, Labour MP Meg Hillier, said the system gave "every appearance of having been politically motivated".
Under the scheme, which was launched in Wolverhampton last year, locations were selected to bid for initial funding of up to £25 million. It was later extended to £50m due to the pandemic.
The committee said officials in the Ministry of Housing, Communities and Local Government (MHCLG) drew up a ranked priority list of 541 towns based on need and potential for development for ministers to select from.
While the top 40 "high priority" locations were all confirmed, ministers then picked another 61 "medium and low priority" communities from across the rest of the list - including one ranked just 536th.
Although, they were supposed to record their "rationale" for choosing some towns and not others, the committee said it was "not convinced" by some of the reasons given.
"The selection process was not impartial," the report said.
"The rationales given for the selection of towns from the medium-priority group are scant and appear based on sweeping assumptions."
The committee also complained that the reasons given by the MHCLG for not publishing more information about the selection process were "weak and unconvincing".
It said concerns had been heightened by press statements which wrongly claimed the National Audit Office had concluded that its procedures were "robust".
"This lack of transparency has fuelled accusations of political bias in the selection process, and has risked the Civil Service's reputation for integrity and impartiality.
"To avoid accusations that government is selecting towns for political reasons, the department should be upfront and transparent about how it reaches funding decisions as the towns fund progresses, particularly the planned competitive round."
In September a first wave of funding of £5.5m was announced for Wolverhampton, Dudley, Walsall, Bloxwich, Rowley Regis and West Bromwich.
Telford was given £1m to create enterprise hubs, regenerate units in Oakengates and Wellington, and for continued investment in the Telford Town Centre's Station Quarter.
The warning comes after Communities Secretary Robert Jenrick earlier this year denied having any role in selecting his constituency, Newark, for a grant under the scheme.
Wolverhampton-born Mr Jenrick said the award had been signed off by the then communities minister Jake Berry, while he had approved a grant for Darwen in Mr Berry's constituency.
An MHCLG spokesman said: "We completely disagree with the committee's criticism of the towns fund selection process, which was comprehensive, robust and fair.
"The towns fund will help level up the country, creating jobs and building stronger and more resilient local economies."
