The Treasury has banned Michael Gove from increasing capital spend on levelling up, after concerns were raised about the ministry’s ability to deliver value for money.
John Glen, chief secretary to the Treasury, has stepped in to prevent the Department for Levelling Up, Housing and Communities from signing off spending on any new capital projects, because of concerns it has lost control of its finances.
Such interventions are typically reserved for departments about which the Treasury has particular financial concerns.
A government insider said the move was triggered by a speech Gove made in Manchester on 25 January. The Treasury did not deny that it had blocked Gove from announcing larger grant pots in the speech.
The decision to rein in Gove’s expenditure, taken last week, means that any new capital spending decision “however small, must now be referred to HMT before approval and the department is not allowed to make any decisions itself”, said one Whitehall insider.
Previously the department had been allowed to sign off new capital spending up to £30m, exactly the size of the fund to improve substandard social housing announced in the Manchester speech.
