In 2016 the Committee of Public Accounts reported on the governance of Local Enterprise Partnerships (LEPs) and made clear recommendations for improvement which were accepted by the Ministry of Housing, Communities and Local Government (the Department).
Despite this, the Greater Cambridge Greater Peterborough Local Enterprise Partnership (GCGP LEP) provides the latest example of the Department devolving powers and funding to LEPs in a manner characterised by both complexity and confusion.
The Department needs to get its act together and assure taxpayers that it is monitoring how LEPs spend taxpayers’ money and how it evaluates results.
The Department assures us that there was no misuse of public funds in this instance; however, this is 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 GCGP LEP. We are not at all convinced that the issues uncovered in GCGP LEP might not be found elsewhere in other LEPs.
We also put on record our displeasure at the conduct of the former Chair of GCGP LEP when giving evidence. He failed to appreciate the importance of good governance, showed a lack of remorse about the outcome for GCGP LEP, and was evasive when questioned about his potential conflict of interest.
Such an attitude only serves to underline the need for the Department to get a grip of its oversight of LEPs. It 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.
Chair's comments
Comment from Committee Chair, Meg Hillier MP:
"Local Enterprise Partnerships are not an abstract concept on a Whitehall flipchart. They are making real decisions about real money that affect real people.
This troubling case only serves to underline our persistent concerns about the governance of LEPs, their transparency and their accountability to the taxpayer.
The Greater Cambridge Greater Peterborough Local Enterprise Partnership failed to comply with the standards expected in public life. Yet there are also clear failings in oversight by central government.
Taxpayers need to be assured their money is being spent wisely and with adequate protections in place to prevent its misuse.
Central government must move swiftly to ensure the recommendations of the Ney review are fully implemented and we expect to see evidence that this has happened.
But it must also do a far better job of explaining the objectives and anticipated benefits of these local partnerships to local people.
Taxpayers surveying the increasingly complex landscape of local government might reasonably ask what LEPs are for.
It is wholly unacceptable that central government does not have a clear, up-to-date answer to that question."