Government ‘no understanding’ of LEP cash effectiveness

A cross-party group of MPs has criticised the government for having ‘no understanding’ of how effective the £12bn of taxpayers’ money given to local enterprise partnerships (LEPs) has been.

In a new report, the influential public accounts committee warns LEP’s have been ‘dogged by a lack of local accountability’ and ‘there is little evidence that they have levered in the promised private sector funds’.

It also criticises the Ministry of Housing, Communities and Local Government ‘no real understanding’ of the impact which the Local Growth Fund has had on local economic growth.

The government has so far been allocated £9.1 billion through Growth Deals to the 38 LEPs in England to drive economic growth in their local areas, with another £3 billion allocated via other means.

But despite receiving quarterly performance data from LEPs, the report says the Whitehall department has not used this to build up an understanding of the impact that local growth funding has had nationally, nor has it measured what value for money LEPs have delivered so far.

The department has acknowledged that it must do better by including evaluation in the design of the UK Shared Prosperity Fund, the report adds.

The report also adds that many LEP boards are not yet sufficiently representative of their local areas.

According to the report, the department does not require LEPs to be representative of local businesses in the area, despite acknowledging the need for LEP boards to reflect their local areas, nor does it plan to check how representative LEP boards are.

It also adds that LEPs continue to underspend their funding allocation each year, calling into question their capacity to deliver complex projects.

LEPs underspent their Local Growth Fund allocations by a total of over £1.1 billion in the three years to the end of 2017-18.

‘Local Enterprise Partnerships have been given £12 billion of taxpayers’ money to support local economic growth,’ said committee chair, Meg Hillier.

‘But LEPs have underspent their funding allocation by over a £1 billion in the past three years, raising questions about their capacity to deliver complex projects.

‘The committee has previously raised concerns about the transparency and governance of LEPs and more action is needed to ensure they are held properly accountable for spending.

‘LEPs are supposed to be an engine room of local economic growth but they have been dogged by a lack of local accountability and there is little evidence that they have levered in the promised private sector funds,’ added Hillier.

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