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Jacqui McKinlay: LEPs need to develop a culture of accountability

Jacqui McKinlay
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Amid the current focus on council finances, it is easy and understandable that attention moves away from other aspects of our complex and slightly dysfunctional world.

Local enterprise partnerships (LEPs), with their increased government funding, pressures on corporate governance and tussles with combined authorities, continue to deserve some serious attention.

LEPs have always been odd creatures but interesting ones for those of us concerned with governance. Set up to be light-touch and led by business, they were meant to bring a more dynamic approach to bear on how public money is invested in economic development. The leaden governance systems we use in local government had no place for these partnerships; they would plough their own furrow, proving their worth (and their acumen) by bringing together private and public sector to achieve economic growth. Accountability was about judging them by that outcome.

Things aren’t that simple, though, and early grumbles about LEP governance have risen to a crescendo recently. The National Audit Office was first to systematically point out many LEPs were failing to meet even the minimal standards of governance set by the government, and in the last year LEPs themselves and government have taken a deep breath and embarked on a rethink and review.

Why should this matter to us and why now? With more funding and more clout, LEPs are now (outside combined authorities) the key lever for promoting local growth. For councils seeking a sustainable future of somewhat localised business rates, securing and embedding that growth is going to be critical. The LEP has to be the principal partner in doing that.

LEPs have local councillors sitting on them, but local people (and councils more generally) demand more. The government plans for enhanced governance arrangements, sketched out by the Ney Review late last year, and now addressed more fully by the government as it revises LEPs’ national assurance framework, are a good start.

But there’s also a need for LEPs themselves and partners to do what the government can’t: address culture. LEPs need to understand how business-like, entrepreneurial but also transparent and accountable behaviours can be fostered within their governance regimes. Addressing this issue, a common set of values, expectations and outcomes for individual LEPs will be crucial in securing success.

A big part of meeting this cultural challenge is being open to scrutiny. At the Centre for Public Scrutiny we are committed localists; while the pressure for change is being kicked off by central government we think this can best to achieved by scrutiny at a local level, delivered by non-executive councillors.

Looking ahead, we have just relaunched our Local Public Accounts Committee proposal. Now is the time for a new mechanism to oversee the value for money of all public spend in an area. Our contention is that the accountability and governance systems of individual organisations, currently, are ill-equipped to deal with the messy reality of partnership working.

LEP scrutiny, such as it is, is notable in many areas only be its absence. Given the critical role played by LEPs in helping councils to secure their financial futures, it’s perhaps time that this changed.

Jacqui McKinlay, chief executive, Centre for Public Scrutiny

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