Growth Company denies conflict of interest in European Social Fund tender

A provider with directors on the board of a local enterprise partnership has refuted conflict of interest allegations after winning nearly all of the £32.6 million available for the area in a recent European Social Fund tender.

The Growth Company Limited, which won £27.6 million in the Greater Manchester area, is a wholly owned subsidiary of the Greater Manchester Combined Authority and its LEP.

The provider has six directors who hold various roles at the organisations it is accountable to.

For example, its chair, Richard Topliss, is a member of the Greater Manchester LEP, while one of Growth’s directors, Michael Blackburn, is the chair of the LEP.

The provider won all three ESF contracts that it applied for to deliver training in the Greater Manchester LEP.

Multiple providers have been in touch with FE Week and complained to the Education and Skills Funding Agency, which ran the tender, to raise concerns about what has been described as a “blatant” conflict of interest.

One college director, who wished to remain anonymous, said: “Issues have been raised with the ESFA about the openness and transparency of the processes, and the potential for bias, as several directors sit on both boards, and executives hold portfolios in both organisations.”

They claimed that the LEP would have been involved in developing the tender specification and ultimately in awarding the tenders with the ESFA for the Greater Manchester area.

“Despite the ESFA claiming there were adequate confidentiality arrangements in place to prevent any information sharing and conflicts of interest, it does raise questions about the bias and favour,” they added.

The Growth Company and the Greater Manchester Combined Authority, which is the accountable body for the LEP, strongly denied the allegations.

“This was an EFSA-run process in which the Combined Authority had limited involvement,” a spokesperson for GMCA and the LEP said.

“Officers were required to sign and abide by the EFSA’s Conflict of Interest declaration and, in common with other areas, provided a short local narrative based around Greater Manchester’s clear strategic priorities to support the specification. 

“None of the GMCA members involved in the Growth Company had access to tender specification information, nor were they involved in any way in the contract letting process. GMCA were not involved in the appraisal of bids and were only notified of the ESFA’s intention to award contracts once the ESFA had made its decisions.”

A spokesperson for the Growth Company said it believes the results of the European Social Fund tender come from “our strong track-record in delivering high-quality skills, employment and business support services across the North of England”.  

“This exercise was competitively tendered and managed nationally by the ESFA,” he added.

“Each proposal submitted achieved an identical and consistent quality score irrespective of the geography. With 63 per cent of contract wins and 50 per cent of potential funding coming from outside of Greater Manchester, we are confident that there was no bias in the ESFA ESF tendering process.”

The spokesperson said its board members had “no access to any of the information listed and had no involvement in the national ESFA commissioning process”. 

A Department for Education spokesperson said it had “no evidence to suggest that there was any sensitive information shared throughout this process”.

We are confident that there was no bias in the ESFA ESF tendering process

The European Social Fund is funding that the UK received, as a member state of the EU, to increase job opportunities and to help people to improve their skill levels, particularly those individuals who find it difficult to get work.

Winning providers in this tender, of which there were 47, will help to deliver the training in 38 LEP areas.

The Growth Company win wasn’t the only controversial part of the procurement.

The ESFA delayed issuing contracts several times, after multiple providers claimed that the government broke tender rules, namely by excluding the “track record” section when marking bids, while the ESFA has admitted to “errors”.

Further questions were asked in March after FE Week discovered an “unprecedented” amount of tie-breaks in the procurement.

One aggrieved provider threatened legal action against the ESFA, but decided to drop this because of the likely cost and a fear of repercussions from the agency.