NAO warns on lack of accountability in LEPs

23 Mar 16

The lack of accountability for taxpayer funds spent through local enterprise partnerships is putting value for money at risk, government auditors have warned.

In an examination of their expanding role, National Audit Office head Amyas Morse said their responsibility had increased “significantly” through the programme of locally negotiated growth deals, agreed under the coalition government.

Around £2bn in annual funding to LEPs has been made available through the ‘single pot’ growth programme from 2015/16 to 2020/21, with £7.3bn allocated as of March 2016. Speaking at the annual conference of LEPs yesterday, local government secretary Greg Clark announced another £1.8bn funding round under the scheme.

However, Morse said the 39 LEPs in England were “not as transparent to the public as we would expect, especially given they are now responsible for significant amounts of taxpayers’ money”.

He added: “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 are, in fact, effective.”

Today’s Local Enterprise Partnerships report highlighted that the role of LEPs has grown significantly and rapidly since 2010, particularly through the growth deals programme. The review found DCLG had not set specific quantifiable objectives for what it hopes to achieve through these deals, meaning that it will be difficult to assess how they have contributed to economic growth.

In addition, the NAO found that LEPs themselves had serious reservations about their capacity to deliver. Only 5% of LEPs considered that the resources available to them were sufficient to meet the expectations placed on them by government. More than two-thirds (69%) reported that they did not have sufficient staff and 28% did not think that their staff were sufficiently skilled.

Pressure on LEPs to spend their growth fund allocation in-year also creates a risk to value for money, the report stated, as LEPs are not incentivised to fund those projects that are most suited to long-term economic development. Some LEPs reported that they have pursued some projects over others that, in their consideration, would represent better value for money due to these constraints.

The partnerships also told the NAO they rely on their local authority partners for staff and expertise because private sector contributions have not yet materialised to the extent expected.

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