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23.03.16

Government is failing to scrutinise LEP delivery of Growth Deals – NAO

Local Enterprise Partnerships (LEPs) suffer from a lack of oversight from the government, especially around Growth Deals, the National Audit Office (NAO) has warned.

The NAO’s new report says that local government funding of LEPs has grown dramatically, from £1.5bn in 2010-15 to £12bn in 2015-21, via locally negotiated Growth Deals.

But the auditors say that the government has not set quantifiable objectives for Growth Deals and has not defined how LEPs will fit into increased devolution in England.

Amyas Morse, head of the NAO, said: “LEPs’ role 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 [DCLG] 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.”

The report warns that the Department for Communities and Local Government assume that LEPs bidding for Growth Deal funds have implemented processes that are not yet fully in place, and puts pressure on LEPs to spend their Local Growth Fund allocation in-year that creates a risk they will invest in projects without long-term benefits.

It recommends that the Department clarifies how LEPs fit with other devolved bodies to which it is devolving power and spending, distributes Local Growth Funding to LEPs in a form that will give them medium to long-term funding flexibility, sets out specific quantifiable objectives and performance indicators for the success of Growth Deals and ensures that there is sufficient local capacity within LEPs to deliver Growth Deals.

The report says that only 5% of LEPs consider the resources available to them sufficient to meet the expectations placed on them by government and 97% feel they do not or might not have sufficiently skilled staff.

LEPs are likely to face more severe pressure on resources in view of the financial pressures on councils.

Cllr Peter Box, economy spokesperson for the Local Government Association (LGA), said: “Longer term certainty of funding over the next few years should give LEPs the ability to ensure local people and businesses benefit from long-term infrastructure and investment that they really need.

“A radical devolution of powers and funding across the country is also now essential to strengthen accountability and the ability of local areas to work together to drive growth and provide better value for money.”

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