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Javid challenges LEPs over governance standards

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Communities secretary Sajid Javid has challenged local enterprise partnerships to tackle corporate governance issues and become more transparent.

The Department for Communities & Local Government is currently conducting a review of LEPs and speaking at the LEP Network’s annual conference in London yesterday Mr Javid urged LEPs to do more to involve and support more businesses in their areas.

Brexit, along with mayoral elections on 4 May, were “going to bring challenges”, said Mr Javid but he added the changes also presented LEPs with opportunities “to grow, to diversify, to make even more of a difference to the communities you serve”.

Mr Javid said: “But as you look for opportunities for expansion and diversification it’s important you don’t neglect the basics.”

Last year public accounts committee chair Meg Hillier (Lab) said the accountability and scrutiny of LEPs was “poor” in some places and added the committee had seen examples of LEP board members failing to declare conflicts of interest, not publishing the minutes of their meetings, and favouring their own businesses with public funding. LGC reported last week that the National Audit Office has launched an investigation into the Greater Cambridgeshire and Greater Peterborough LEP following questions raised over the way finances have been allocated for projects built by its chair’s construction firm.

In his speech Mr Javid issued a “big ask” of LEPs to “take a good look at your corporate governance”. He said: “We all know last year’s headlines about fat cats investing in their own businesses do not reflect the actions of the vast majority of LEPs.

“But if we’re going to get the maximum value of taxpayers’ money, and if the public are going to trust you’re going to deliver, you have to make sure every penny you spend is transparent and justified.

“That’s why we’ve strengthened the rules around how funds can be spent and invested.”

Mr Javid also warned LEPs against becoming a closed club. He said there were “still too many businesses and well over half” in some areas who are “not aware of their local LEP”.

While Mr Javid said he got “a lot of positive feedback” from larger businesses about the support LEPs gave them he added: “I want you to ask yourselves if you’re doing enough to communicate with the smaller businesses and those outside the LEP bubble.”

“Are you talking to people who don’t have a lobby group to speak up for them? Are you meeting the needs of everyone in your area and not just the ones reaching out to you? If we’re going to make this a country that works for everyone it’s not enough to just focus on the easy wins,” he added.

The prime minister is due to trigger Article 50 tomorrow and leaving the European Union will bring an end to areas receiving European funding.

Mr Javid said: “On the surface this can be worrying. But remember the chancellor has already issued a series of guarantees about EU funding over the Brexit period and we’re already working on our replacement for EU funding over the longer term. This isn’t just about changing the name on all of the EU funding pots, it’s also an opportunity to rethink how funding works and it’s also an opportunity to make it truly local.

“Whatever the final outcome you will no longer be jumping through hoops made in Brussels trying to satisfy a criteria set by anonymous EU bureaucrats.” Mr Javid then joked: “We’ll make you jump through traditional British hoops instead.”

Mr Javid said he wanted to “work with” LEPs on future funding arrangements and added: “I want to hear your thoughts and ideas on how to reshape and develop the role of LEPs in delivering local growth.”

Responding to a question about the future funding of LEPs Mr Javid encouraged LEPs to “make sure” they are trying to access all available funding pots and gave the housing infrastructure fund and national productivity funds as examples.

He encouraged LEPs to respond to the housing white paper, the Department for Education’s fair funding review, and do more to get involved in town centre regeneration.

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