How has the unelected New Anglia Local Enterprise Partnership been spending £37m of taxpayers' money in Suffolk?
PUBLISHED: 08:00 28 November 2016 | UPDATED: 10:41 28 November 2016
It had a £33million increase in public funding last year and is run by an unelected body, influencing decisions which affect people everywhere in our region.
But you don’t have a say over where the New Anglia Local Enterprise Partnership (LEP) spends your money and you can’t go to its meetings.
That is why today we are looking at where the LEP has spent its 800% increase in taxpayers’ cash in Norfolk and Suffolk and how effective it has been.
Set up to create jobs and businesses, the LEP was given £37.4m from the government last year – up from £4m the year before.
That sudden leap in funding from the squeezed public purse means New Anglia LEP now has a bigger budget than small councils in the region such as Forest Heath.
The LEP, which is headed by business people and council leaders, will get £220m of taxpayers’ cash by 2020, including £38.5m this year.
In return, the government expects it to help create 10,000 businesses, 95,000 jobs and 117,000 new homes by 2026 in Suffolk and Norfolk.
Managing director Chris Starkie said the LEP’s board decided which projects to back based on whether they met those goals.
The LEP wants its schemes to add an extra 32,000 jobs in Suffolk and Norfolk by 2026, and create an additional 500 businesses a year.
It says its projects have already created 4,464 new jobs and 350 new businesses since 2012.
It also wants to increase the number of new homes built in Suffolk and Norfolk by a third to 117,000. So far its programmes have helped build 229 new homes.
The LEP said this low number was because the region’s housing market had seen a “subdued” recovery since the financial crisis.
John Dugmore, chief executive of Suffolk Chamber of Commerce, said it had a strong relationship with the LEP on a range of projects and campaigns. The LEP says its schemes have unlocked more than £200m of private investment, five years ahead of target.
But in March this year, the National Audit Office found it would be difficult to measure LEPs’ contribution to economic growth.
It also found LEPs “do not yet have an established track record of delivery”.
As LEPs across the country get billions of pounds more in public funding, they have also been criticised for a lack of transparency.
The New Anglia group holds all its meetings – apart from its AGM – in private, while making decisions that affect thousands of people.
In May 2014, the Public Accounts Committee said it was concerned about “the lack of transparency” of LEPs and the government’s reliance on “self-reported information” as a way of measuring their success.
They are not subject to local government transparency rules.
Shadow Business Secretary Clive Lewis said the region needed business leaders and councils to bat in partnership for the local economy but they needed to be open.
“We need to recognise that without them [LEPs] local economic development would be in a worse place,” he said.
“But that doesn’t mean we can’t do things better or be critical friends when something’s not right.
“This government has a blind spot when it comes to the accountability of organisations that spend billions of pounds of our money.
“Whether they are doing a good job or not, it simply can’t be right that it’s so difficult for us as the people who fund them and who they serve to hold them to account.”
The LEP’s board is unelected, but it does publish a list of interests of its 16 board members. It also publishes minutes from meetings.
Mr Starkie said the board’s decisions were scrutinised by the government and councils.
“We are accountable to central government,” he said. “We publish details of how we spend the money. We regularly appear before council scrutiny panels.”
Board members also have to leave the room if a decision will affect any of their business interests.
Which projects has the LEP backed?
The LEP supports projects from road and rail to food and flood defences.
It has several funds of public money which it uses to support private businesses invested in East Anglia.
Firms benefiting from the cash range from huge multinationals such as McDonald’s to small start-ups.
Some of the money is given as loans, with the interest rate decided depending on risk of the project, while other cash is given as a grant.
The LEP has supported infrastructure projects with its Growing Places Fund, with funding of £17million.
It has also given more than £15m of taxpayers’ money out as grants through its Growing Business Fund.
That cash has gone to 300 businesses and the LEP says the funding will create 2,200 jobs and unlock private investment of £100m.
Mr Starkie said the LEP would not loan the public money to private firms at “unacceptable risk” but intervened when projects or companies could not get private funding which would benefit the region.
“If something is not working in the system, we look to step in,” he said.
Funding has included: • £10m for Bury St Edmunds relief road. • £6.6m towards the £53m flood defences in Ipswich. • £500,000 to support commercial developments on the Barton Mills roundabout on the A11, including McDonald’s and a petrol station. • £2m for Haverhill Research Park. • £1.8m for Ipswich transport overhaul. • £2m to develop plans for a third river crossing in Lowestoft.
Where the money went
Of the £37million the LEP was given in a grant from the government last financial year, the LEP passed £20m of that on in grants to projects in Suffolk and Norfolk.
The biggest sum of £3.9m was given to West Suffolk College for its engineering and technology centre.
Another £4m was paid out in loans to kick-start businesses and projects.
Staff costs for the LEP’s 23 employees came to around £1m.
That left almost a third of their budget, £12m, which was earmarked for projects such as the College of West Anglia and the Aviation Academy at Norwich Airport which fell behind schedule.
It meant the money could not be passed on and the LEP under spent by £12m. That money rolled over to be spent this year instead, with the College of West Anglia opening in September and work starting on the Aviation Academy in April.
“We have to spend the money we are allocated in a year,” Mr Starkie said. “If a sector slips that is a problem so we are trying to be as flexible as we can with our projects.”
Who is on the LEP
The government announced in October 2010 that 24 Local Enterprise Partnerships (LEPs) would replace Labour’s Regional Development Agencies.
As of March 2016, £7.3billion worth of public cash had been earmarked to LEPs to push regional growth.
The LEPs decide who is a member of its board but it must be chaired by a business person and at least half of its members must be from the private sector.
The New Anglia LEP board is made up of eight people from the private sector and eight from the public sector.
They are: Mark Pendlington, group director, Anglian Water; Doug Field, joint chief executive, East of England Co-op; Mark Goodall, area manager, Aker Solutions; Jeanette Wheeler, partner, Birketts LLP; Steve Oliver, chairman, MLM Group; Lindsey Rix, managing director, Personal Lines, Aviva; Davina Tanner, chief executive, Britannia Enterprises; Dr Tim Whitley, managing director research and innovation, BT; David Ellesmere, leader, Ipswich Borough Council; Andrew Proctor, leader, Broadland District Council; John Griffiths, leader, St Edmundsbury Borough Council; Cliff Jordan, leader, Norfolk County Council; Colin Noble, leader, Suffolk County Council; Alan Waters, leader, Norwich City Council; Dr Nikos Savvas, principal, West Suffolk College; Professor David Richardson, vice-chancellor, University of East Anglia.