Council funding 'too complicated'

Updated: 

PA

The number of separate streams of local council funding has doubled since a Government-commissioned review called for them to be reduced two years ago, town hall leaders claimed.

Research by the Local Government Association (LGA) found there were now 124 individual pots of money, twice the number when ex-cabinet minister Lord Heseltine delivered his call for streamlining to promote regional growth.

And with around half of those requiring councils to submit bids for a share of the cash, the LGA said that millions of pounds of taxpayers' cash was being poured into clawing back state funding.

A new £2 billion Local Growth Fund set up in response to Lord Heseltine's recommendations had incorporated only six existing funding streams representing less than 10% of all central spending on local growth and regeneration, according to the LGA analysis.

Peter Box, chairman of the LGA's economy and transport board, said: "It is farcical that government persists with a system which requires millions of pounds of public money to be spent on bidding for funds from the public purse, whilst creating uncertainty for businesses and investors.

"Millions of pounds and hundreds of days of officer time are tied up just trying to access funding. This is proving completely counter-productive to our efforts to create jobs, build homes and develop the infrastructure we need to get our economy growing.

"The complex maze of bureaucracy Whitehall is clinging on to appears to have been designed to create work for civil servants rather than jobs for the people in the rest of the country.

"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."

The research suggested the average bid cost £30,000 and used 33 days in officer time.

John Allan, national chairman of the Federation of Small Businesses, said: "This research clearly shows the problems that result from having such a fragmented system for promoting regional economic development.

"Having so many different funding streams each with their own timetables and objectives makes it very difficult to produce programmes that impact meaningfully on businesses.

"It also wastes resources on bidding processes that could be better used elsewhere. What is required is a far more co-ordinated approach focused on fewer schemes that actually work over the longer term."

Alex Pratt, chairman of the Local Enterprise Partnership (LEP) network, said it exposed "damaging instability, inefficiency, and delays in realising economic opportunities.

"Economic and business development require long term consistent approaches that fully reflect the needs on the ground and against which businesses can plan with certainty and not the haphazard, last minute, bureaucratic surprises often characterised by national silo responsibilities."

A Department for Communities and Local Government spokesman said: "The Government's long-term plan is returning economic growth to all parts of the country by putting power into the hands of local people, building vital infrastructure, cutting paperwork for businesses, creating two million new jobs and 1.8 million more apprenticeships.

"In the coming days, Growth Deals will be announced with every Local Enterprise Partnership in the country, supported by the £12 billion Local Growth Fund. These deals have cut bureaucracy and costs
by ensuring local areas can plan for the future, with the power to take more spending decisions than ever.

"This is a genuine revolution in how our economy is run. For the first time ever, housing, infrastructure and other funding is being brought together in a single pot, and put directly into the hands of local authorities and businesses to spend the way they know best."

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