Michael Gove’s government department has been banned from spending money on new capital projects without Treasury approval amid concerns about how well public money is being managed.
Insiders had signalled that Gove’s speech in Manchester on 25 January had prompted fears of rogue spending as he announced plans to fund a new round of local grants in northern counties.
It had also been claimed that Gove’s pledge in the same speech to provide £30m to fund improvements to substandard housing, after a two-year-old boy in Rochdale died after being exposed to mould in his family’s flat, had prompted fury among Treasury officials. The Treasury denied this.
Normally, the Treasury intervenes only to lower or remove a department’s spending budget over concerns about whether it is delivering value for money. Before this move, the Department for Levelling Up, Housing and Communities (DLUHC) could spend up to £30m on capital projects.
A government spokesperson told the Guardian: “The government’s central mission is to level up every part of the United Kingdom by spreading opportunity, empowering local leaders and improving public services. DLUHC will continue to deliver its existing programme of capital projects as planned.”
Levelling up was a central part of the Conservative party’s 2019 winning election campaign. It was trumpeted as an agenda aimed at breaking down the wealth gap between the north and the south, but Labour analysis has revealed that London will receive more funds than Yorkshire and the north-east.
Gove repeatedly denied that the latest announcement of £2.1bn for 100 projects was a tilt away from funding the north of England.
The spending ban came as Rishi Sunak conducted a timid reshuffle of his government in an attempt to shore up support within his cabinet.
Gove has led the department for a year and a half, save for his brief spell as a backbencher after he was sacked by Boris Johnson in his last act as prime minister.
The former victims minister Rachel Maclean became the 15th housing minister since 2010, and the fifth since 2015, as she replaced Lucy Frazer in Gove’s department during Sunak’s reshuffle.
