Levelling up: struggling councils spent £26m on consultants to produce levelling up funding bids

Consulting firms have been paid millions to help resource-starved councils produce bids for levelling up cash, NationalWorld can reveal.

Local authorities in England spent more than £26million on consultants to assist in the production of bids for funding from central government in recent years, in what one senior local government figure described as a “field day” for the industry.

Including staff time and internal resources, the true cost of producing bids for four levelling up funding pots was likely much higher than the £27million which councils were able to account for in FOI responses to NationalWorld, as most had not recorded the internal costs.

Austerity has left councils reliant on private sector for support

Construction companies, quantity surveyors and professional services firms have been among the major winners from the levelling up agenda, as councils in England have spent more than £26million since 2019 on consultants to either completely handle or support the production of levelling up bids.

While some councils have been able to put together levelling up funding bids using only internal resources, particularly larger councils, smaller authorities which have seen their staff numbers cut drastically in recent years have been forced to spend more on external consultants in order to apply for funding.

Council leaders say that a decade of austerity has left many local authorities ill-equipped to carry out the kind of work necessary to bid for competitive funding schemes, which has in some cases discouraged them from applying for vital additional funding.

Based on data obtained by NationalWorld under the Freedom of Information Act (FOI) from 245 upper and lower-tier local authorities in England, we can reveal for the first time the vast amount of resources councils have had to deploy to bid for levelling up money, in some instances resulting in no return whatsoever.

The main four funding pots administered by DLUHC which have distributed cash to councils are the Community Renewal Fund (CRF), the Future High Streets Fund (FHSF), round one of the Levelling Up Fund (LUF) and the Town Deals. A small number of councils which responded to NationalWorld’s FOI requests also included the amount they have spent so far on producing bids for round two of the LUF, the winner of which are due to be announced imminently.

‘For the consultancies it’s a field day’

Speaking to NationalWorld, executive director for growth and sustainability at Barnsley council, Matt O’Neill, said the bidding process diverts internal resources away from other things and that many authorities struggle as a result, particularly smaller councils, which “haven’t got the people, they haven’t got bid writers and their people are doing 10 things already”.

He added: “They’re not going to be able to do it. We’re not in that place, we’ve got capacity, but it actually diminishes the quality of some of the other things we’re doing. For the consultancies it’s a field day, because they keep getting money, which is a resource that should be spent elsewhere.”

O’Neill told MPs on the Levelling Up, Housing and Communities select committee recently that the authority has to “bring in other people” to help produce bids.

He said: “We have a head of economic development and a policy officer who look at funding, but we bring in other people, who are delivering the day-to-day capital projects, to put together funding applications and build them on an ad hoc basis.

“It is in the order of several hundreds of thousands of pounds, but lots of that capacity is not within the council, so we have to commission consultants to provide the evidence for business cases.”

Three of England’s directly-elected mayors criticised the competitive bidding process in a recent select committee session, describing how the system puts strain on councils that are already short of resources.

Mayor of West Yorkshire Tracy Brabin said: “There are local authorities whose budgets have been absolutely slashed, and they’re behind others in the queue because they just don’t have those resources. It’s just not working.”

“The bidding process is ineffective, inefficient and it’s expensive. It doesn’t deliver. And it’s also subject to ministerial changes in the weather, which is not good for the North. And it’s not good for the UK.”

A DLUHC spokesperson said: “Our £4.8 billion Levelling Up Fund is transforming areas and restoring local pride in communities across the UK. It is only right we have a rigorous application process in place to ensure taxpayers’ money is spent wisely. Unsuccessful bidders are also provided feedback and will be able to bid again.”

To read more of this investigation on levelling up funding click here.