A call has been made for local enterprise partnerships to have a new contracting process that’s “fair and transparent” if they’re dealing with cash from the adult education budget, following allegations that board members are allocating valuable contracts to their own companies.
An investigation published by the Mail Online has alleged that LEPs have made more than 270 payments to companies or other projects connected with their own board members, with sums for example ranging from £13,000 to £1 million.
Conflicts of interest like these will be of concern to the sector, as LEPs already control much of the funds available to FE providers for capital spending – while last month’s autumn statement confirmed that the government is pushing ahead with plans to devolve the AEB.
The investigation prompted Mark Dawe, chief executive of the Association of Employment and Learning Providers, to hit out at “a system set up in a manner that leads to institutional bias”.
LEPs continuously seek ways to improve transparency and share best practice
“We expect a local commissioning model, used by LEPs or combined authorities, to set out the needs of the locality and then to follow a fair and transparent contracting process for the whole adult education budget open to all eligible providers,” he said.
Dr Ann Limb CBE, chair of the South East Midlands LEP, previously tweeted that bodies like hers “should be transparent in their dealings and transactions”.
In comments to FE Week however, Dr Limb, the former principal of both Milton Keynes College and Cambridge Regional College, said: “I believe that financial probity, transparent governance, and public accountability lie at the operational heart of every organisation in receipt of government funding – LEPs or FE colleges.
“I can only speak for the LEP I chair, the SE Midlands LEP, where I am confident we have in place sound processes and procedures which I welcome being scrutinised and challenged.”
Meg Hillier (pictured), the Labour MP who chairs the House of Commons Public Accounts Committee, said the issue was “of deep concern”.
“We have already raised concerns about the accountability of LEPs and the lack of basic systems in place to make sure interests are declared and where money is being spent,” she added.
A LEP-funded report published in October by Metro-Dynamics, called ‘Leading the way’, also came out in support of greater transparency.
It said: “LEPs need to continue to ensure that they are known for having the best possible approach to transparency and governance in terms of decision-making and spending.
“It is important to get the balance right, in being expected to spend £12 billion of public funding to 2021, and it is vital that accountability is, and is perceived to be, to the level required.”
The chairman of the Greater Cambridge Greater Peterborough Enterprise Partnership, Mark Reeve, told FE Week on behalf of the LEP Network Board, that “all LEPs take any allegations of improper conduct extremely seriously”.
“LEPs continuously seek ways to improve transparency and share best practice,” he said.
“It is not the role of the LEP Network to monitor how LEPs allocate grant funding or assess conflicts of interest.
“The government has clearly vested that role in the democratically elected councils who are accountable for monitoring conflicts of interest and ensuring how grant funding is awarded by the LEPs.”
A government spokesperson said: “Our rules make clear the need for a published conflicts of interest policy and insist upon transparency in the way taxpayers’ money is spent.
“We won’t hesitate to act if any LEPs are found to have failed to follow our rules.”