MPs raise concerns over £9.1 billion local enterprise partnerships

A Whitehall department has been told it needs to “get its act together” to ensure public money is not being wasted in a critical report from the Commons spending watchdog.

Sajid Javid’s Ministry of Housing, Communities and Local Government (MHCLG) was condemned by MPs on the Public Accounts Committee (PAC) for the way it oversaw local partnerships between councils and businesses.

Some £9.1 billion of taxpayers’ money has been committed to growth deals with Local Enterprise Partnerships (LEPs) between 2015 and 2021, but the way the process is handled has been characterised by “complexity and confusion”, the cross-party PAC report said.

The MPs said that although MHCLG had assured it there was “no misuse of public funds in this instance”, that was “due more to luck than effective oversight”.

They said the GCGP situation had been “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.”

PAC chairwoman Meg Hillier said: “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.”

She added: “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.”

The MPs said GCGP LEP “did not comply with expected standards in public life, particularly in terms of accountability and transparency” and singled out former chairman Mark Reeve for criticism.

The MPs pressed Mr Reeve about a potential conflict of interest because his construction company had the contract to build on a site, while the LEP was advising on what infrastructure should be at the location.

In their report, the MPs recorded their “displeasure” at his conduct when giving evidence, adding: “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.”

An MHCLG spokesman said: “Local Enterprise Partnerships help drive economic growth and we have put clear rules in place to ensure they are transparent, avoid conflicts of interest and use taxpayers’ money effectively.

“We have committed to fully implement the findings of an independent expert into the way they are governed.

“We will take swift action if any LEPs are found not to have followed our rules.”