Public Accounts Committee

Cities and Local Growth inquiry

Inquiry status: open

The Public Accounts Committee holds a session on cities and local growth on Monday 25 April 2016.

Scope of the inquiry

In England, local enterprise partnerships (LEPs) are voluntary partnerships between local authorities and businesses set up in 2011 by the Department for Business, Innovation and Skills to help determine local economic priorities and lead economic growth and job creation within the local area.

The role and remit of 'Local Enterprise Partnerships' (LEPs) has grown significantly and rapidly since 2010, but as things stand, the approach taken by the Department of Communities and Local Government to overseeing Growth Deals risks future value for money, according to the National Audit Office (NAO).

The Government encouraged the establishment of LEPs as private sector-led strategic partnerships which would determine and influence local growth priorities. With the advent of the Local Growth Fund, the amount of central government funding received by LEPs is projected to rise to £12 billion between 2015–16 and 2020–21 via locally negotiated Growth Deals. The Department, however, has not set specific quantifiable objectives for what it hopes to achieve through Growth Deals, meaning that it could be difficult to assess how they have contributed to economic growth.

LEPs themselves have serious reservations

The NAO have published a report which concluded that LEPs, themselves, have serious reservations about their capacity to deliver and the increasing complexity of the local landscape. To oversee and deliver Growth Deal projects effectively, LEPs required access to staff with expertise in complex areas such as forecasting, economic modelling and monitoring and evaluation.

Only 5% of LEPs considered that the resources available to them were sufficient to meet the expectations placed on them by government. In addition, 69% of LEPs reported that they did not have sufficient staff and 28% did not think that their staff were sufficiently skilled.

The NAO found that LEPs rely on their local authority partners for staff and expertise, and that private sector contributions have not yet materialised to the extent expected.

The Public Accounts Committee has previously looked at local economic growth in 2014.

Devolution in England

Related to the approach to economic devolution, the government has also announced a series of devolution deals from late 2014 onwards, devolving powers, funding and accountability to local areas, mostly coming together as combined authorities. Bids were invited from across the country within the Treasury’s Spending Review timetable.

The National Audit Office is drafting an early-stage report that describes the scope of the deals announced to date, and assesses government's role in coordinating and evaluating the devolution bids it has received. It will also consider some of the implications and risks of the new arrangements in terms of accountability and value for money.

The PAC will consider this report on the reports publication and hold an inquiry alongside the hearing on LEPs.

Latest evidence

  • 25 Apr 2016 - Cities and Local Growth - oral evidence | PDF version (PDF409 KB) HC 913 | Published 10 May 2016

    Evidence given by Professor Andy Pike, Centre for Urban and Regional Development Studies, University of Newcastle, Martin McTague, National Policy Director, Federation of Small Businesses, Lord Porter of Spalding, CBE, Local Government Association ChairmanMelanie Dawes, Permanent Secretary, Communities and Local Government, Simon Ridley, Director General, Decentralisation and Growth, Department for Communities and Local Government, Catherine Frances, Director, Public Services, HM Treasury

    Watch this evidence session

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