Research and analysis

Towns Fund evaluation: interim findings 2 - executive summary

Published 25 July 2025

Applies to England

Frontier Economics and BMG Research were commissioned by the Ministry of Housing, Communities and Local Government (MHCLG) to undertake an evaluation of the Towns Fund. The Towns Fund is an MHCLG fund that aims to drive towns’ economic regeneration and reshape towns and high streets, to ensure future economic sustainability and growth. It is made up of 2 parts: Town Deals (TD) and the Future High Streets Fund (FHSF). The evaluation is expected to conclude in March 2026 and consists of 3 parts:

• process evaluation: a qualitative exploration of how the design, delivery, monitoring and evaluation, and wider processes have worked to date
• impact evaluation: a quasi-experimental programme-level evaluation and a theory-based intervention-level evaluation consisting of 20 case studies of funded projects
• value-for-money evaluation: an assessment of whether the intervention represented an effective use of public resources

A feasibility report for the Towns Fund evaluation was published in January 2024, and an early process evaluation insights report was published in October 2024.

This report sets out emerging, indicative process and impact findings from the first 7 case studies undertaken as part of the evaluation.

The intervention-level impact evaluation examines the individual projects funded by the Towns Fund in detail to understand how they create impact. The evaluation focuses on the key mechanisms behind the projects’ outcomes, exploring how and why these impacts occur.

The intervention-level evaluation does not aim to provide a comprehensive or definitive measurement of the causal, quantitative impacts of the Towns Fund programme. Instead, it complements the programme-level evaluation by enabling a more detailed understanding of how local communities are experiencing interventions and how interventions deliver (or are expected to deliver) different outcomes and impacts. The programme-level evaluation assesses the overall impact of the Towns Fund using a quasi-experimental approach.

The indicative process findings relate to the design and planning, structure and delivery, and monitoring and evaluation of the Towns Fund. The impact findings relate to emerging findings from the intervention-level evaluation for the evaluation questions set out in the feasibility report.

The case studies in this report were selected from completed projects and may not be representative of all projects funded by the Towns Fund. Selection criteria for the case studies are set out in Section 5.2 of the feasibility report. All findings should be considered preliminary and are subject to change following further analysis and data collection from 2025 to 2026.

Emerging process evaluation findings

The key objectives for the process evaluation for this phase are to understand:

• how the Town Deal and Future High Streets Fund application and funding processes work
• what are the barriers and enablers to the design, delivery and monitoring of Town Deal and Future High Streets Fund projects
• how barriers were mitigated
• the lessons for future local growth funding programmes and other programmes, or funds

Emerging process evaluation findings on the structure of the fund, design and planning, delivery, and monitoring and evaluation are set out in this report. Except where otherwise specified, the findings apply to both the Town Deals and the Future High Streets Fund.

Local authorities reported that the funding approaches for Town Deals and the Future High Streets Fund enabled them to meet council objectives. However, the allocation-based approach was seen as better suited to target areas with the greatest need.

Local authorities felt that the allocation-based approach (used for Town Deals) ensures the funding targets areas with the greatest need, such as those experiencing high levels of deprivation. This finding should be interpreted with caution. Only local authorities that received funding were included in the evaluation, which may limit the generalisability of the results. Local authorities also reported that, in competitive approaches such as the Future High Streets Fund, bidding skill can sometimes outweigh actual need. This has led to a perception that consultants are often required to draft successful bids. Local authorities reported that both allocation-based and competitive approaches were helpful for meeting project objectives once the funding was granted and sufficient to cover project costs.

Overall, project teams (local authorities for both funding streams and Town Deal Boards for Town Deals) reported that design and planning worked well to align with the needs and priorities of local areas. This was facilitated by the involvement of a wide group of stakeholders in design and planning.

Local authorities reported that projects were aligned with the needs and priorities of the local area. This was achieved through the involvement of Town Deal Boards, council stakeholders, and consultations with the public and businesses. For Town Deal projects, the diverse composition of Town Deal Boards, which included key stakeholders from the private, public, and third sectors, helped ensure consensus was reached on the projects chosen for funding. Across both funds, economic development officers’ and other senior council officers’ participation in design workshops and discussions ensured projects aligned with the councils’ priorities, such as tackling high unemployment. Moreover, both online and in-person consultations with the public and businesses gave local authorities an overview of sentiment towards project plans (across both funds).

Towns Fund capacity funding was vital during the design stage for Town Deal projects. It allowed places to appoint consultants who supported the development of investment plans, business cases, and project plans. Consultants addressed both resourcing and expertise gaps, particularly in business case development, within local authorities.

Similarly, stakeholders reported that delivery went smoothly overall. However, they noted some challenges at the delivery stage due to contextual factors and a lack of funding for future project operations.

Positive working relationships between local authorities and delivery partners were crucial to progress delivery. Factors contributing to these strong relationships include shared objectives, regular communication, site visits, mutual trust, existing partnerships, and contracts with well-defined responsibilities.

Contextual factors, particularly higher than expected inflation and trade disruptions from the COVID-19 pandemic and the Red Sea crisis, had a negative impact on delivery. While project teams built expected inflation into their project budgeting, costs increased beyond expectations. This cost increase required project leads to remove certain components of the project or absorb additional costs to remain within budgets. Towns Fund capacity funding was unavailable to offset inflation, as it had already been spent at the design and planning stage. The Towns Fund guidance (PDF, 2.3MB) states that capacity funding was meant for preparing proposals and not for covering contingency costs during project delivery. Similarly, trade disruptions delayed equipment and material deliveries, extending project timelines.

For Town Deals, futureproofing the projects proved challenging due to a lack of allocated Towns Fund funding for future operation and maintenance. By the time fieldwork was conducted, local authorities involved in Town Deal projects lacked plans for ensuring project delivery beyond the Towns Fund funding period. They also reported being unaware of any alternative MHCLG or public funding to support these needs. Futureproofing was less challenging for Future High Streets Fund projects due to councils’ existing responsibilities for maintaining the public realm. Additionally, local authorities considered Future High Streets Fund projects to be low-maintenance in the long term. For instance, one local authority expected renovation materials used on the high street to remain in good condition for 20 years.

Local authorities had mixed views on the proportionality and value of MHCLG monitoring requirements.

Local authorities viewed MHCLG monitoring returns as too lengthy and not user-friendly, noting, for example, the lack of auto-fill for duplicate information. Local authorities also reported limited understanding of how MHCLG uses monitoring data after project completion, particularly regarding the achieved outcomes.

Local authorities’ views on the overall value that they derived from MHCLG monitoring returns were mixed. Some found them useful for tracking the delivery of outputs and outcomes and checking timelines. However, other local authorities found that MHCLG’s monitoring returns were duplicative of existing efforts, as they monitored project outcomes and finances more frequently through funding agreements with delivery partners. For Town Deal projects, Town Deal Boards were responsible for actively monitoring project delivery, as well as overseeing MHCLG monitoring form returns and undertaking regular discussions on risks and the development of mitigation strategies.

Emerging impact evaluation findings

The projects included in the7 initial case studies have delivered their immediate expected outputs. These projects were diverse and include the redevelopment and reopening of a local sports centre in Kidsgrove, the redevelopment of a community hub in Loftus (Duncan Place, which includes a library and youth and family services), the regeneration of areas in and around the town centre in Northallerton and Yeovil, the deployment of electric buses in Hereford, and the construction of modern learning facilities at local colleges in Norwich and Redcar. More details on these projects are set out in Section ‎4 and Annex B.

The intervention-level impact evaluation is a theory-based evaluation using a Realist Evaluation approach. This approach attempts to understand ‘what works, for whom, and in what circumstances’ by gathering evidence on the mechanisms by which an intervention is expected to deliver its impacts. Unlike (quasi) experimental methods, Realist Evaluation does not attempt to objectively measure the specific causal impact of an intervention. Instead, it evaluates the strength of evidence for links between an intervention and observed outcomes. For a link to be claimed as causal it requires a clear explanation of how the outcome was generated (the mechanisms) that is backed up by robust and plausible evidence and that alternative hypotheses are rejected. Assessing causality is challenging when outcomes are subjective, time-sensitive and influenced by external factors (such as pride in place).

Evidence for this report has been drawn from a mix of project monitoring data, stakeholder workshops, project and footfall data, and a primary survey of local residents carried out by BMG Research and Frontier Economics.

All findings in this report should be considered preliminary due to the recent completion dates of the projects and the fact that they represent less than half of the planned case studies.

The facilities delivered by the pride in place and local wellbeing-related projects appear to drive changes in residents’ participation in the community and satisfaction with local amenities. Local stakeholders and residents interviewed as part of the case studies were also consistently positive about the overall output of the projects and the early effects that these projects were perceived to have in their communities.

The Kidsgrove Sports Centre exceeded its membership target within the first six months of reopening, with a fifth of local residents reporting having visited the sports centre in the 12 months to May 2024. Visitors to the sports centre reported a net increase in their participation in clubs, classes, or exercise at local sports facilities in the previous 12 months. Much of this usage appears to be additional, as opposed to displacing usage from other sports facilities, based on stakeholder input and footfall data from the closest comparable alternative sports centre. There is also evidence of strong participation in sports programmes for which there are no clear substitutes in the immediate area and from groups with disabilities. Stakeholders primarily attributed the high levels of participation at the sports centre to the centre representing a hub for the wider community (including the provision of space for local banking and community services), as well as the emphasis on community consultation and accessibility in its design.

In Loftus, the library located in Duncan Place has seen an increase in usage since its completion. The Loftus Library saw the single largest increase in active borrowers across any of the 13 libraries in the Redcar and Cleveland area for which data is available in 2023/24. Stakeholders reported this usage was largely driven by an increase in overall library usage rather than displacement from other libraries. Local stakeholders cited significant improvement in the appearance and functionality of the space. They also reported that the new facilities offered new activities and reported benefits from having library services, youth services, and family services in one location. This is consistent with evidence from the resident survey, with more than 50% of visitors reporting that the library had improved since its relocation to Duncan Place. However, there appears to be an unintended negative effect on youth services attendance due to the refurbishment, with the redeveloped sports hall not entirely fit for purpose due to trade-offs made in the design of the building to support its environmental sustainability.

Users were positive about the changes to the Town Square in Northallerton and the High Street in Yeovil. Over 75% of local residents reported visiting the town centre in Northallerton at least once a week, with most visitors reporting that they were satisfied with the redeveloped Town Square and that the Town Square had improved. Stakeholders reported that the increased seating, additional trees, and overall appearance of the works in the Town Square were key enablers of its reception by the community. Similarly, stakeholders in Yeovil were positive about the changes to the High Street area in Yeovil, citing its improved appearance and greater pedestrian access. However, stakeholders and residents in Yeovil expressed more concerns about the ongoing disruption due to construction work in the area on other Towns Fund projects.

Early evidence suggests that the projects are well used and are driving early changes in local satisfaction and attitudes, although evidence on wider changes in overall pride in place is inconclusive at this stage.

Visitors to the Kidsgrove Sports Centre were more likely than non-visitors to report their local area had improved in the previous two years, while visitors to the Town Square in Northallerton reported higher satisfaction with the local area than non-visitors. This effect was stronger for residents who visited the projects more frequently.

This suggests that direct exposure and more frequent visits are associated with higher pride in place and satisfaction levels. However, due to the lack of baseline surveys and the early nature of these findings, it is not possible to robustly assess the impact on overall pride in place. More evidence on this will be available in the final report, as baseline survey data is available for the upcoming case studies.

The limited observed changes in overall pride in place may also be due to other regeneration projects ongoing in the town centres and high streets outside of the completed case study projects. In some cases, this leads to ongoing disruption in the town centres, while in others, projects intended to complement the case study projects have not been completed. There are also wider factors beyond the scope of the Towns Fund projects which may be affecting local pride in place. The primary reasons respondents gave for low pride in place in the post-project surveys were anti-social behaviour, lack of community cohesion, and the appearance of the local area.

There are early signs that direct exposure to facilities is linked to higher resident life satisfaction. However, as with pride in place, it is not possible to draw a causal link from the available evidence, and evidence on changes in other wellbeing metrics is inconclusive.

In Kidsgrove, the reported life satisfaction of those who had visited the sports centre was, on average, higher than those who had not. Approximately 76% of visitors reported their life satisfaction was high or very high, compared to 68% of non-visitors. This suggests that usage of the Kidsgrove Sports Centre is correlated with higher individual wellbeing, although the lack of baseline data means that it is not possible to draw a causal relationship. In particular, this higher reported wellbeing may be due to users with higher wellbeing being more likely to visit sports centres.

Visitors to Duncan Place in Loftus were likelier to report they were very satisfied with their lives, with 36% of the visitors reporting they were very satisfied compared to 26% of non-visitors. Similarly, visitors reported lower anxiety levels and higher happiness levels than non-visitors. This difference in anxiety and happiness levels is stronger for more frequent visitors to Duncan Place. However, as in Kidsgrove, a lack of baseline data makes it difficult to attribute causal impacts, and these results may instead indicate that users with higher levels of wellbeing are likelier to visit libraries and community hubs. This will be investigated in the future with case studies that include baseline survey data.

It is too soon to assess the wider changes in economic and employment outcomes as the projects have only recently been completed.

Initial data suggests that changes in high street footfall to date are limited. In Northallerton, quantitative data did not show a change in footfall to the period ending December 2023 when compared to other towns in the region. Similarly, there has been no clear change in overall footfall in the Yeovil town centre since the completion of the redevelopment of the High Street.

Based on qualitative input from stakeholder interviews, this may be due to lags in impacts and other ongoing regeneration work in the area. In particular, these projects are part of wider regeneration work in the affected areas (including, in some cases, other works funded by the Towns Fund), and the area itself is still under development. This was cited as a particular issue in Yeovil, where long-running construction work is ongoing near the High Street. Similarly, local residents and business stakeholders reported that they expected wider changes in footfall to result from changes in the retail offering on the high street as a result of the redevelopment work rather than directly from the redevelopments themselves. As a result, there may be a lag between the completion of projects and changes in town centre footfall.

The projects in Norwich and Redcar have led to hundreds of learners acquiring training and education at the newly built education facilities. In Redcar, learner and apprentice numbers at courses which use the new facilities increased from 79 in 2022/2023 (the year prior to the facilities opening) to 178 in 2023/24. In Norwich, a total of 886 learners and apprentices used the facilities from April to September 2024 and enrolled in a mix of pre-existing and new courses.

Businesses interviewed were positive about the quality of these facilities and the skills needs they were filling. They reported expected vacancies in the future, which the training provided at the facilities could help to fill. Qualitative input suggests that the new facilities have led to an improved quality of education and an increase in overall learners attending the courses. However, the limited time since project completion and data limitations mean that it is not possible to observe wider business or employment effects from these projects.

Our case studies contain only one project where the primary expected outcome is improved physical connectivity – an electric bus project in Hereford. The electric bus service in Hereford appears well-used, with 15,000 journeys per month, on average. At least a portion of these journeys will likely displace car journeys. In particular, the bus operates a new route, which does not duplicate existing services. It is also free of charge and has its most popular boarding spots at the train station and a major supermarket car park. Stakeholders indicated that this has led to the supermarket car park being used as an unofficial park-and-ride, reducing car journeys into the city centre.

Next steps

The evaluation is currently underway and runs until March 2026. The final report is expected to be completed in Spring 2026. The final report will include process and impact evaluation findings from the full set of case studies, as well as findings from the programme-level econometric analysis and findings from the value-for-money assessment. This evaluation timeline is detailed in Table 1.

Table 1: Evaluation timeline

Evaluation milestone	Date
Evaluation feasibility report published	January 2024
Early process evaluation insights published	October 2024
Cut-off date for project completion, for projects to be included in the impact evaluation	April 2025
Emerging findings from the process and intervention-level impact evaluations	July 2025
Final evaluation report	Spring 2026