The Towns Fund – an update

Local Government has always played a crucial part in shaping our built environment.

How we feel about the places where we live and work plays a major role in the economic, social and political success of a location. Regeneration and the obvious links to the prosperity of our towns and cities is a long established part of the public sector’s contract with those they serve. In this article, we explore the next phase of the process involved in accessing funding under the Towns Fund. 

Let’s first remember the context in which this fund is operating. Before the Covid crisis councils were already gearing up to promote and enable prosperity.  Covid has added "recovery" to that mandate. The fund was originally launched with a much smaller available figure for councils to use but this was hugely increased as in late 2019 the Government further recognised the value of that kind of investment.  Now there has been criticism that the success of awards has become politicised but let's leave that for now and focus on the next steps for those councils who have secured funding.  

By way of background, the Towns Fund pot amounts to £3.6 billion. Kickstart funding of up to £1m per town was announced in September and further awards of up to £25 million for each town are to follow. One hundred towns were shortlisted as invited applicants for the Towns Fund. £80m was allocated in this first tranche.  

The fund was always designed to promote growth and to address any constraints councils were encountering which were impacting on their ability to achieve that.  The fund is designed to promote urban regeneration through a number of matrices including increased density of the town centres, strengthening local economic assets; including cultural assets.  It can be used for site acquisition, preparation, remediation and development etc. But it's not just about physical assets.  The fund can be used to create skill and enterprise infrastructure to help promote investment in those areas. On top of that there is also scope to develop local transport schemes and the delivery of improved digital connectivity. So it has really wide application with creative and well advised councils primed to make excellent use of the funds.

The pandemic has, of course, massively heightened the pressure for councils to be successful in their bids.  It’s certainly true that the worst impacted areas are likely to be those areas facing the most acute deprivation.  Additional Towns Fund Guidance was published by the MHCLG on 15 June 2020. This summarises the process for agreeing Town Deals and for implementation. It is this current implementation phase where we are seeing the most calls for legal and project management support. 

Assuming that town investment plans have been approved and the Heads of Terms have been agreed, towns have up to 12 months (maximum) to develop agreed projects in detail, complete comprehensive business cases, and submit a Town Deal Summary Document to MHCLG. This should include details of the delivery arrangements and could include:

  • technical assessments;
  • detailed design;
  • planning processes;
  • community stakeholder engagement;
  • discussions with potential private investors, funders, etc.;
  • Public Sector Equalities Duties and Environmental Impact Assessments;
  • setting in place delivery arrangements; 
  • developing monitoring and evaluation frameworks; and
  • working up Key Performance Indicators.

During this second phase, towns will be in close contact with their named Towns Hub lead and with the external supplier appointed by MHCLG.  Many councils are, however, working with their own appointed advisers to ensure the implementation phase runs smoothly. Having waded through the treacle to get to this point it is crucial that councils have clearly worked up legal and commercial structures to deliver the projects. This also means working closely with officers to carry out the options appraisals to establish the best way to deliver and work with the established Board to help depoliticise the project.  Making sure everyone is "in the tent" saves a lot of time and helps breed confidence with any third party contractors or developers the council may want to work with on the delivery phase.  

Each business case will be fully costed and set out the details of how each project will be delivered.  There are two routes for agreeing business cases.  In most cases the agreed Accountable Body's green book-compliant assurance processes will be used.  For novel and unusual projects the MHCLG's financial processes may be used. MHCLG has produced best practice guidance for the development and appraisal of business cases. HM Treasury guidance Green Book and associated guidance may also be relevant.

Once detailed business cases have been developed, towns must submit a Town Deal Summary Document to the Towns Hub, which should include:

  • a list of agreed projects;
  • details of business case assurance processes followed for each project;
  • an update on actions taken in relation to the Heads of Terms key conditions and requirements;
  • a Delivery Plan (including details of the team, working arrangements and agreements with stakeholders);
  • a Monitoring and Evaluation Plan;
  • confirmation of funding arrangements and financial profiles for each project;
    confirmation of approval of planning applications; and
  • letters of approval from the Town Deal Board and Lead Council.

Further guidance on producing a Delivery Plan and a Monitoring and Evaluation Plan (referred to above) is expected. The MHCLG will then carry out a high-level assessment of the submitted documents before releasing funding. There is a lot of work to do to produce these documents and we are finding councils don't always have the resources to effectively complete these steps and are calling for support.  During this next phase establishing a focused project team will be key to the success of the funding being properly awarded and implemented.    


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