“High risk” devolution plans giving local enterprise partnerships widespread adult education budget spending powers must be subjected to far more stringent scrutiny, a new Public Accounts Committee report has warned.
The document was unveiled this morning, with committee chair Meg Hillier (pictured) insisting “every pound of public money” spent by LEPs and other relevant local bodies “must be a pound parliament can trace”.
It comes after an investigation published by the Mail Online alleged that LEPs had 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.
Question marks over accountability matter deeply to FE, with LEPs already in control much of the funds available to providers for capital spending – and last month’s autumn statement confirmed that the government is pushing ahead with plans to devolve the AEB.
The findings 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”.
The new PAC report has raised further concerns about scrutiny, transparency and accountability, stressing that “taxpayers must be able to understand who is spending their money, how that money is allocated and where responsibility lies if the system fails to deliver good value or things go wrong”.
A spokesperson stressed: “This includes the ‘opaque’ nature of accountability for the activities of LEPs – designed to bring together the public and private sector – which are now negotiating local growth deals funded by a £12 billion fund over a five-year period”.
Ms Hillier complained today that the message coming from government was that combined authorities had signed up for devolution and “it’s over to them – full stop”.
But she said: “This high-risk strategy is squarely in the sights of our committee. Our concerns are not addressed to the policy of devolution but rather the risks inherent in its implementation.
“Every pound of public money spent by an elected mayor, LEP or other body must be a pound parliament can trace. Spending must face robust scrutiny.”
A LEP-funded report published in October by Metro-Dynamics, called ‘Leading the way’, previously 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.”
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.”