Background to the report
Local Enterprise Partnerships (LEPs) are private sector led partnerships between businesses and local public sector bodies. They were established in 2011 to drive economic growth in local areas. There are 38 LEPs in England, each operating across more than one local authority. The government has committed £12 billion to local areas in England between 2015-16 and 2020-21. Of this, £9.1 billion has already been allocated through Growth Deals negotiated between central government and individual LEPs.
This report has been prepared to update the Committee of Public Accounts (the Committee) on the work of LEPs and the Ministry of Housing, Communities & Local Government (the Department) to address previous National Audit Office (NAO) report recommendations that focused on value-for-money issues; and the Committee’s recommendations on governance and transparency issues. It will also update the Committee on progress to meet the recommendations set out in the Mary Ney’s Review of Local Enterprise Partnership governance and transparency.
Content and scope of the report
This report sets out:
- changes to the role and remit of LEPs since we last reported in 2016 (Part One);
- the Department’s and LEPs’ progress with strengthening governance, assurance and transparency (Part Two); and
- funding spent through LEPs to date and future funding arrangements (Part Three).
We have not evaluated the effectiveness of the Department’s work or the value for money of local growth funding spent through LEPs.
With the significant amount of public funding now delivered through LEPs and the recent failure of the GCGP LEP, there is a clear rationale for more demonstrable good governance in LEPs and better oversight by the Department. We recognise the inherent tension the Department faces in developing a system of governance over a delivery model based on the devolution of funding and responsibilities to ad hoc, business-led partnerships. The Department has responded by implementing the recommendations of the Ney Review and some of those made by the Committee. While the assurance framework is stronger, backed up by checks on compliance, it is not proven yet whether these measures will be effective in detecting and responding to governance failures over significant sums of public money.
The Department’s accounting officer is accountable for the Local Growth Fund delivered through LEPs. However, the Department has made no effort to evaluate the value for money of nearly £12 billion in public funding, nor does it have robust plans to do so. The Department needs a grip on how effectively these funds are used. It needs to act if it wants to have any hope of learning the lessons of what works locally for future interventions in local growth, including the new UK Shared Prosperity Fund.