Promoting economic growth locally - Public Accounts Committee Contents

2  The oversight and coordination of local growth initiatives

10. The Departments have not managed the local growth initiatives as a coordinated programme with a common strategy, objectives or plan. New structures and funds have been introduced in piecemeal fashion, with each initiative introduced with its own separate objectives, and then being monitored and managed separately. The Departments told us that there is a range of other government expenditure to support growth. It was not clear how this activity had been coordinated across government. The Departments told us that they have moved to a single local growth team that represents Departments across government, and have a programme board overseeing progress across all the local economic growth initiatives. While this is a welcome development, it has taken far too long—four years—to get to this point. Although a programme board has been in place since 2012, it had no formal programme management responsibilities, and has only recently started overseeing the development of the local growth fund.[20]

11. It is also unclear who in central government is responsible and accountable for the success of local growth policies. For example, the Accounting Officer for the Department for Communities and Local Government told us that he is now accountable for all local economic growth funding with the exception of £600 million from 2015-16, allocated to rounds five and six of the Regional Growth Fund. He explained that the £600 million is specifically focused on national support for businesses for which the Accounting Officer at the Department for Business, Innovation and Skills is accountable.[21]

12. The Departments told us that they are monitoring each of the initiatives separately. The Departments considered that the initiatives are very distinct, and as such not immediately comparable. The Departments agreed that there is a risk of double-counting, with the same jobs scored more than once to different initiatives. For example, the same jobs may be counted in an Enterprise Zone application, a Growing Places Fund application and a local council initiative. With respect to the Growing Places Fund we asked the Departments why they had not been providing data on transport and homes built until recently. The Departments told us that their intention was to keep monitoring to the minimum necessary, but that they have increased the amount of information requested from Local Enterprise Partnerships.[22]

13. The Departments stated that they will carry out individual longer-term evaluations for each of the local economic growth structures and funding arrangements. However they have only taken action to schedule an evaluation of one of the schemes, the Regional Growth Fund. The Departments told us that a scoping study is reporting on the best techniques to use in an evaluation of the Fund in March 2014. It will therefore have taken nine months to complete the scoping study, in contrast to the very large and complex evaluation of the Sure Start programme which was completed in around six months. The Departments went on to explain the scoping study will be used to set up an evaluation contract in summer 2014, which will produce an interim report in 2017, and a full report in 2020.[23]

14. The Departments told us that the current model of local economic growth will change in 2015-16. The new model, the Local Growth Fund, will replace some, but not all, of the current structures and funding arrangements set up following the 2010 White Paper. The Local Growth Fund is part of what are known as 'growth deals' being negotiated between the Departments and Local Enterprise Partnerships. The Local Growth Fund itself will provide some £2 billion of funding in 2015-16 to Local Enterprise Partnerships and a government undertaking to continue this level of funding for five years. The Departments told us that this encompasses a number of different funds. The Departments stated that no further funding will be allocated from Departments to Local Enterprise Partnerships, local authorities or Enterprise Zones through the Regional Growth Fund. However, the Departments will continue the Regional Growth Fund for businesses. The Department told us that the Growing Places Fund will end in 2015. However, in reality the Growing Places Fund will continue because 83% of the funding given out by Local Enterprise Partnerships has been given to end beneficiaries as loans, to allow for recycling of the funding. Enterprise Zones and other local growth funds will come under the new single growth team.[24]

15. We asked the Departments about Local Enterprise Partnership's accountability arrangements. The Departments rely on local authorities to provide assurance over the funding that Local Enterprise Partnerships control. Specifically, one or more local authorities may be nominated as being accountable for a Local Enterprise Partnership's funding. The Departments gain assurance as local authorities are subject to the same transparency and accountability rules as other public bodies. The Departments do not, however, have any evidence to suggest that this system is working. For example, they could not tell us if a local authority has ever stopped a Local Enterprise Partnership from spending. We expressed concern about the lack of transparency of Local Enterprise Partnerships and the reliance on self-reported information. The Departments told us that they are putting together information from local Enterprise Partnerships setting out how they have performed, for example on the numbers of jobs created, in relation to the Regional Growth Fund, Enterprise Fund and Growing Places Fund.[25]

20   Qq53-54, Q103; C&AG's report, Funding and structures for local economic growth, paras 4.2-4.3 Back

21   Qq1-2; Q53; C&AG's report, Funding and structures for local economic growth, para's 16 and 4.4 Back

22   Q53,Qq65-67, Q80, Qq112-114, Q117 Back

23   Qq65-67 Back

24   Q2, Q4, Q7, Q53, Q108; C&AG's report, Funding and structures for local economic growth, para 3.26 Back

25   Qq85-86, Q88, Q109; C&AG's report, Funding and structures for local economic growth, para 4.9 Back

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Prepared 16 May 2014