Billions of pounds of taxpayers’ money have been distributed by ministers to towns across England in a process lacking transparency fuelling fears of “political bias”, MPs have found.

The cross-party Commons Public Accounts Committee said the process for selecting communities to benefit from the £3.6 billion Towns Fund was “not impartial” and risked undermining the integrity of the Civil Service.

In a scathing report, it said ministers in the Ministry for Housing, Communities and Local Government (MHCLG) had picked towns on the basis of “scant” evidence and “sweeping assumptions”.

The committee chair Meg Hillier said the system gave “every appearance of having been politically motivated”.

The warning comes after Communities Secretary Robert Jenrick earlier this year denied having any role in selecting his constituency, Newark, for a £25 million grant under the scheme, despite having boasted about it during last year’s general election.

Mr Jenrick, said the award had been signed off by the then communities minister Jake Berry, while he had approved a grant for Darwen in Mr Berry’s constituency.

The scheme was originally launched “at pace” in July 2019 to provide support struggling towns across England.

Officials in the MHCLG then drew up a ranked priority list of 541 towns based on need and potential for development for ministers to select from.

While the top 40 “high priority” locations were all confirmed, ministers then picked another 61 “medium and low priority” communities from across the rest of the list including one ranked just 536th.

Although, they were supposed to record their “rationale” for choosing some towns and not others, the committee said it was “not convinced” by some of the reasons given.

“The selection process was not impartial,” the committee said.

“The rationales given for the selection of towns from the medium-priority group are scant and appear based on sweeping assumptions.”

The committee also complained that the reasons given by the MHCLG for not publishing more information about the selection process were “weak and unconvincing”.

It said concerns had been heightened by press statements which wrongly claimed the National Audit Office had concluded that its procedures were “robust”.

While the MHCLG permanent secretary Jeremy Pocklington insisted he was satisfied the requirements of “propriety and regularity” had been met, the committee said it was “disappointed” that a summary of his assessment remained unpublished.

“This lack of transparency has fuelled accusations of political bias in the selection process, and has risked the Civil Service’s reputation for integrity and impartiality,” it said.

“To avoid accusations that government is selecting towns for political reasons, the department should be upfront and transparent about how it reaches funding decisions as the Towns Fund progresses, particularly the planned competitive round.”

The committee was also critical of the way ministers took decisions without consulting local stakeholders such as MPs and local enterprise partnerships.

“Of particular concern is that directly elected mayors were not consulted, despite officials specifically recommending to ministers that they do so,” it said.

“Ministers explicitly rejected the recommendation, deciding they wanted to make decisions themselves without seeking local views.”

Ms Hillier said recent Government programmes to provide support through the coronavirus pandemic had underlined the potential cost of schemes launched in haste without the usual legal checks and controls.

“That makes it all the less acceptable to now be looking at billions of pounds handed out in an opaque process that has every appearance of having been politically motivated – long before Covid struck,” she said.

“MHCLG must be open and transparent about the decisions it made to hand out those billions of pounds of taxpayers’ money, and what it expects to deliver.”

An MHCLG spokesman said: “We completely disagree with the committee’s criticism of the Town Fund selection process, which was comprehensive, robust and fair.

“The Towns Fund will help level up the country, creating jobs and building stronger and more resilient local economies.”