13 February 2004
The regeneration of 39 of the most deprived areas of England is being hindered by poor financial reporting and strained relations with local authorities, the National Audit Office warned this week.
In its early progress report on the first three years of the New Deal for Communities, the watchdog found that, despite some difficulties, the programme still 'holds potential for future success'.
The £2bn ten-year scheme was set up to improve the employment, education, health and crime levels in England's 39 most deprived areas through community partnerships. The NAO said that 50,000, or 11%, of residents had already been involved in the NDC, a higher level of community engagement than in other international regeneration initiatives.
But the report found that progress had been slower than expected. The NDC partnerships spent only 63% of their allocated funding in 2001/02, and 81% the following year. The NAO attributed some of this slow start-up to delays in – and poor quality of – community consultation, which 'replaced tangible results'. Conversely, this had led to tensions, with communities becoming disappointed by a lack of visible progress.
The watchdog also highlighted poor 'operating procedures' as a priority for the Office of the Deputy Prime Minister to address. The partnerships have set up a variety of financial, governance and accounting procedures that were often found to be insufficiently robust. These have also prevented ministers and the partnerships from gauging both their performance and whether the funds were being allocated efficiently.
In four partnerships, the ODPM was forced to intervene to change either the leadership or decisions.
The NAO makes a number of recommendations, such as more standardised financial and performance systems, strengthening governance arrangements and improving community engagement.
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