The Chamberlain News

LEPs are lacking in transparency and expertise, National Audit Office warns

England’s Local Enterprise Partnerships do not have staff with sufficient expertise to deliver £12 billion of regeneration projects and are failing tests of openness and public accountability, according to a critical report by the National Audit Office.

The 39 LEPs rely on their local authority partners for staff and expertise while private sector input has not yet materialised to the extent expected by the Government, the NAO found.

Only five per cent of LEPs considered that the resources available to them were sufficient to meet the expectations placed on them. Many of the LEPs said they had limited access to staff with expertise in complex areas such as forecasting, economic modelling and monitoring and evaluation.

In addition, 69 per cent of LEPs reported that they did not have sufficient staff, and 28 per cent did not believe their staff were sufficiently skilled.

The NAO report raised questions about standards of governance and transparency.

All of the LEPs had frameworks in place to ensure regularity, propriety and value for money. However, the Department for Communities and Local Government “had not tested the implementation of such assurance frameworks at the time that Growth Deals were finalised”.

The report found that the availability and transparency of financial information varied across LEPs.

Almost 90 per cent of LEPs failed to register senior staff remuneration in publicly available accounts, while 42 per cent do not publish a register of interests.

Amyas Morse, head of the National Audit Office, said:

The role of LEPs has expanded rapidly and significantly but they are not as transparent to the public as we would expect, especially given they are now responsible for significant amounts of taxpayers’ money.

While the Department for Communities and Local Government has adopted a ‘light touch’ approach to overseeing Growth Deals, it is important that this doesn’t become ‘no touch’.

The Department needs to do more to assure itself that the mechanisms it is relying on ensure value for money is effective.

Mr Morse added that it would be difficult to assess the success of Growth Deals because the Government had failed to set clear objectives for what it wanted to achieve.

The role and remit of LEPs has grown significantly and rapidly since 2010, but as things stand, the approach taken by DCLG to overseeing Growth Deals risks future value for money, the NAO found.

The Government encouraged the establishment of LEPs as private sector-led strategic partnerships which would determine and influence local growth priorities.

With the advent of the Local Growth Fund, the amount of central government funding received by LEPs is projected to rise to £12 billion between 2015-16 and 2020-21 via locally negotiated Growth Deals.

Pressure on LEPs to spend their Local Growth Fund allocation in year creates a risk that LEPs will not fund those projects that are most suited to long term economic development, according to the NAO.

LEPs reported that they have pursued some projects over others that, in their consideration, would represent better value for money. LEPs have also found it challenging to develop a long-term pipeline of projects that can easily take the place of those that are postponed.

The LEP Network, representing the 39 LEPs, said the partnerships had secured £5 billion of private sector leverage, created 115,000 new jobs and 71,000 new businesses since 2010.

Addressing the LEP Network annual conference last week, Prime Minister David Cameron said:

I believe that local business leaders and local authorities must work together to make the best decisions for their area. This Government is pushing forward with the most ambitious devolution of power in a generation and business must be at the forefront of this.

A new round of the Local Growth Fund worth £1.8 billion was announced in the Budget.

Communities Secretary Greg Clark said:

We’re completely changing the way business is done in this country, ending the top-down, ‘Whitehall knows best’ mentality of the past and instead putting power back where it belongs – in the hands of local communities.

With this offer of a Growth Deal to communities across the country, we’re backing this devolution revolution with billions of pounds, releasing vital investment in projects across the country to boost local skills, deliver new homes and create jobs.

 

Business leaders urged the Greater Birmingham and Solihull LEP to enter the bidding round for Growth Deals.

Russell Jeans, membership and business services director at the Greater Birmingham Chamber, said:

We welcome this announcement about more funding for the regions, and would urge the Birmingham and Solihull Local Enterprise Partnership to take full advantage.