An influential group of MPs has questioned the way the government has dealt with the assets and staff of the abolished Regional Development Agencies.
The concerns have been raised by the House of Commons’ public accounts committee as it published a critical report questioning the robustness of the savings claimed by the government’s “bonfire of the quangos”.
The committee expressed concern there was no restriction on RDA staff receiving a redundancy package and then seeking employment with the successor local enterprise partnerships which are part-funded by public money.
The report said: “Because the LEPs will not be public sector bodies funded directly by central government, there were no arrangements to transfer staff.”
If a redundant employee of the RDA was employed by a LEP “there would be no restriction on indivudals moving into work for an LEP while retaining a redundancy package from an RDA”.
The committee said “it was not clear” whether the government had even considered allowing staff transfers from RDAs to LEPs “in order to save redundancy costs”.
The concerns expressed echo criticisms made by communities secretary Eric Pickles about local government officers “double dipping” by seeking re-employment after a redundancy or retirement.
In an attempt to discourage such practices, Mr Pickles published guidance last year which suggested councils publish their policy on employing retired or redundant local government officers. However, the code of recommended practice does not apply to the LEPs created by the coalition government.
The government had originally claimed that its cull of government bodies would lead to savings of £2.6bn in administration costs. Committee chair, Margaret Hodge (Lab) claimed the figure was “based on incomplete and imprecise estimates from departments” and welcomed a pledge by the Cabinet Office to provide the committee with a “revised” figure.
The public accounts committee’s report details the disposal of RDA land assets as an example of how the process can be “lengthy and complicated” because of the need to avoid a “fire sale” and low prices during the economic downturn.
- As of 31 March 2010, the eight RDAs outside London held assets of £512m
- In 2010/11 assets with a book value of £25.9m were sold for £29.6m
- Between April and September 2011 assets with a book value of £37.1m were sold for £37.7m
- Assets worth £633.8m were transferred to the Homes & Communities Agency
The report said there was “little evidence that departments are tracking and following the entire disposal process through in order to be assured that the best value is being realised”.