The Financial Times had reported the Treasury had banned capital spending by Michael Gove's department amid doubts regarding its ability to deliver its flagship policy to reduce regional economic divides.

The agenda was a key part of the Conservative Party's election-winning manifesto in 2019.

Capital spending is the money used to buy, upgrade or maintain physical things like buildings and equipment.

Answering a question on the matter in the Commons, Levelling Up minister Lee Rowley emphasised the change would not have an impact on the department's agenda or ambitions.

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'No change' to budget or objectives, minister insists

"It is absolutely the case that processes change and they also may apply at times in different ways," Mr Rowley told MPs.

"We are working within a new delegation approach with Treasury which involves sign off with Treasury on capital spend.

"We will always work closely with Treasury, we value their value-for-money focus, they value our mission and they share our mission to level up the country as a whole, and we will continue to do that."

He added: "There has been no change to the Department for Levelling Up, Housing and Communities budget whether capital or revenue, no change to our policy objective, no dilution of our ambition and there are no implications for the government's policy agenda."

'Absurd' if Gove can't 'sign off on a park bench'

Shadow levelling up secretary Lisa Nandy said "rogue" spending commitments made by Mr Gove to sort out poor social housing conditions may have led to the decision by the Treasury.

Referring to the Financial Times report, she told MPs: "If this report is true, we are in the absurd situation of having a secretary of state for levelling up who doesn't even have the authority to sign off on a park bench."

The report said Treasury chief secretary, John Glen, has stepped in to prevent the department from signing off spending on any new capital projects because of concerns about whether the department is delivering value for money.

Ms Nandy asked Mr Rowley: "Is it true that this decision by the Treasury was prompted by unauthorised spending commitments made by the secretary of state at the Convention for the North to spend money on improving appalling housing standards after the desperate death of a two-year-old boy in Rochdale?"

"I understand the secretary of state is in Rochdale today. How can he possibly tell housing associations to sort themselves out if he can't sort out his own department?"

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She added: "We deserve to know whether the chancellor of the exchequer believes that a secretary of state who is finally, belatedly, spending money on housing standards is a secretary of state who has gone rogue because that would be a very serious thing indeed."

Responding to the Financial Times report, a Treasury spokesperson denied Mr Gove's speech at the Convention for the North prompted the spending ban.

A government spokesperson said: "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."