MILLIONS OF pounds are being wasted on bureaucracy in funds aimed at boosting local economies, new research has found.
The study commissioned by the Local Government Association (LGA) shows £23bn of growth funding is spread across as many as 70 schemes and managed by 22 different government departments and agencies.
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represents more than 370 councils in England and Wales, is calling on the Government to reform this ‘inefficient and outdated’ system that channels funding for local growth through scores of separate pots and instead devolve money to local councils and businesses directly through a single investment fund.
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.”
The LGA has dubbed the current situation “a maze of complexity”, with different departments using different bidding processes and operating to their own timescales.
The research shows that in most areas more than 63 per cent of the funding streams have little or no connection to local efforts to drive growth and create jobs and areas with devolved deals fare better.
One example is employment and skills funding which totals nearly £10.5bn yet is scattered across 20 different national schemes.
If the Government devolved the main funding to local government, the LGA says councils would be able to develop a single strategy which was based on the needs of people rather than separate institutions.
Councils also have to stay on top of a host of different schemes for things like housing and transport.
The report follows a similar study two years ago which backed up the LGA and members’ concerns that the plethora of central government funding pots for growth and regeneration acted as a barrier to effective and joined-up action to support local economic development and regeneration.
That earlier study showed that in 2013/14 there were by comparison more than 100 different pots of funding, totalling over £22bn across 20 different central government departments and agencies.