Oversight of local enterprise partnerships questioned

An influential group of MPs has warned the government is still failing to get a grip on how local enterprise partnerships (Leps) spend taxpayers’ money.

A new report by the public accounts committee claims the case of the Greater Cambridge and Greater Peterborough Lep highlights how confusing and complex funding arrangements are for such partnerships.

In particular, the report starts the Ministry of Housing, Communities and Local Government needs to ‘get its act together’ and assure taxpayers that it is monitoring how Leps spend their money.

The report into how the government oversees the Greater Cambridge and Greater Peterborough Lep found that while the ministry ‘assures us that there was no misuse of public funds’, this was due ‘more to luck than effective oversight’ given that there appear to have been no effective mechanisms in place for identifying conflicts of interest in the LEP.

‘We are not at all convinced that the issues uncovered in Greater Cambridge Greater Peterborough Lep might not be found elsewhere in other Leps,’ the report states.

It also notes the committee’s ‘displeasure’ at the conduct of the former Lep chair, Mark Reeve, when he appeared in front of the panel.

‘He failed to appreciate the importance of good governance, showed a lack of remorse about the outcome for the Lep, and was evasive when questioned about his potential conflict of interest,’ the report states.

The report adds the Ministry of Housing, Communities and Local Government needs to implement quickly the recommendations of Mary Ney’s review of Local Enterprise Partnership governance and transparency, ensure that all Leps and their boards are aware of the Nolan Principles for the standards of conduct expected in public life and ensure that they live up to these principles in practice.

The current Greater Cambridge Greater Peterborough Lep will cease to exist on 1 April and a new Lep will be created, which will be directly linked to the Cambridgeshire and Peterborough Combined Authority.

‘This troubling case only serves to underline our persistent concerns about the governance of Leps, their transparency and their accountability to the taxpayer,’ said committee chair, Meg Hillier.

‘The Greater Cambridge Greater Peterborough Lep failed to comply with the standards expected in public life. Yet there are also clear failings in oversight by central government.

‘Taxpayers surveying the increasingly-complex landscape of local government might reasonably ask what Leps are for,’ added Ms Hillier.

‘It is wholly unacceptable that central government does not have a clear, up-to-date answer to that question.’

The director of the Lep Network, Warren Ralls, said: ‘The Lep Network acknowledges the report from the public accounts committee into the Greater Cambridge Greater Peterborough Lep, and takes seriously the conclusions and recommendations made.

‘All Local Enterprise Partnerships are acutely aware of their public accountability responsibilities. All Lep chairs are fully committed to the highest standards of transparency and governance, and are signed up to the Mary Ney guidelines. Every Lep has a local authority who acts as an accountable body, who recently confirmed with government that their Lep follows the government’s assurance framework.

‘Leps are working with government on its review to enhance the guidelines on Lep transparency and accountability and to strengthen those elements that make Leps a significant driver of local economic growth.’

• To read the full report by the public accounts committee, click here.