Business development · 19 December 2016

Small businesses demand greater local spending transparency

javid
Secretary of State for Communities and Local Government, Sajid Javid, has been encouraged to make LEPs more accountable

Small business owners across the UK have called for greater local spending transparency among Local Enterprise Partnerships (LEPs) when using taxpayer money.

In response to a recent government report looking into issues related to devolution in England, raising particular concerns about LEPs, the Federation of Small Businesses (FSB) has identified a pressing need for the partnerships to become more accountable around local spending transparency.

Following the publication of the Devolution in England report by MPs on the Public Accounts Committee (PAC) on 18 December, FSB national chairman Mike Cherry said in a statement: “The government should now insist LEPs publish a register of business interests and fulfil their obligation to appoint a small business champion to their board, as announced at the last Budget.”

Cherry added that although a number of LEPs across the country have proved to have effectively driven local growth, more needed to be done to ensure all partnerships delivered for local businesses and their local economies.

“It’s encouraging to see the cross-party and influential PAC push for clarity around devolution objectives in England,” Cherry went on to say. “The need for greater LEP accountability has never been more pressing as the partnerships are set to receive increased funding over coming years.”

The report concluded that central government had so failed to be specific about what devolution aimed to achieve, and had been poor at communicating its goals to the public.

LEPs are designed to bring together the public and private sector to better enable economic growth at the local level, yet accountability for the activities or the partnerships has remained “opaque” since many of them were created, the report concluded.

The PAC has called on government, specifically The Department for Communities and Local Government, to do more to demonstrate a link between devolution and economic growth.

According to chair of the PAC, Meg Hillier: “The public care about the future of vital local services – about jobs, housing, education. They want to know not just who is spending their money and to what end, but also how well it is being spent.”

In May 2017, mayors will be elected for the first time to head up combined local authorities in the UK. These mayors will then work closely with LEPs and will have significant powers to direct local government spending.

Agreements have so far been reached to create locally-elected mayors in eight UK areas including Greater Manchester, Sheffield City, the Tees Valley, Liverpool City, the West Midlands, East Anglia, Greater Lincolnshire, and the West of England. Not all eight areas have yet confirmed there will be elections in May next year, however.

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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