Ministers did not consult other business groups before appointing the British Chambers of Commerce to run a new national local enterprise partnership quango.
In a parliamentary answer, local government minister Bob Neill said the contract to run a new national forum for England’s local enterprise partnerships (LEPs) had been awarded to the British Chambers of Commerce (BCC) “following their initial proposal submitted to the Department [for Communities & Local Government] (DCLG)”.
He said: “The BCC offered to run a network of local enterprise partnerships and submitted a proposal to support this offer.
“The decision to engage with a BCC-led network has been made on the basis of their good fit, national reach and ambition to deliver this work across the country for local enterprise partnerships.”
The decision to appoint the BCC to run the LEP quango sparked anger when it was announced in April, with the Federation for Small Businesses (FSB), the Institute for Directors (IoD) and the Forum for Private Business (FPB) saying it had been driven top-down by DCLG without any consultation.
The business groups said the network, which will receive £300k in funding, was a waste of tax payers’ money and had their names withdrawn from the department’s press release announcing the network’s launch.
Mr Neill said that the £300k grant agreement was not yet in place and “any funding awarded will be subject to a satisfactory funding agreement which will be dependent on the quality of BCC final business case.”
He said the network “will provide a forum for local leaders to share ideas, solve problems and get the latest data they need to promote economic growth across the country”.
“We hope other business organisations will engage constructively in this work going forward,” he added.
John Walker, National Chairman, Federation of Small Businesses, said it was clear that the government did not go through any formal procedure for tendering for the contract to run the network and that it was not clear where the £300k grant funding was coming from.
He said he was concerned that there “seems to have been no clear process for how the decision to award the contract to the BCC was reached”.
“Since coming to power the government has said that it is going to be more open and transparent, yet the manner in which this went ahead goes against that, with DCLG not sure where the funding will come from or what it will be used for.
“All the main business organisations have their own strengths and member bases across the regions. Had a full consultation and tender process been put in place, we feel that a more inclusive group could have been formed which fully represented all business needs and opinions.”
A DCLG spokesman said: “The government have chosen the British Chambers of Commerce as the preferred option to run a network of local enterprise partnerships following their initial proposal submitted to the Department. We hope other business organisations will engage constructively in this work going forward.
“However, no grant agreement is yet in place and any funding awarded will be subject to a satisfactory funding agreement which will be dependent on the quality of British Chambers of Commerce final business case.”