MP's blistering attack on why Fenland is missing out on tens of millions of pounds of Government cash - and queries why a Chatteris firm was incentivised to move to Huntingdon
PUBLISHED: 12:00 26 January 2017 | UPDATED: 12:00 26 January 2017
MP Steve Barclay renewed his attack on the Greater Cambridge Greater Peterborough Enterprise Partnership (LEP) today questioning possible conflicts of interests over tens of millions of pounds of spending decisions.
The NE Cambs MP also said there were “outstanding questions” relating to a multi-million contract awarded to King’s Lynn construction firm Chalcraft whose managing director Mark Reeve is the chairman of LEP.
He said the concern is not whether a conflict existed but how this was managed.
Central to his criticism of LEP is alleged discrepancies in agri-tech funding between districts which he says is far greater than previously identified and is likely to be even higher once his study is complete.
New figures, he says, suggests King’s Lynn and West Norfolk “received 16 times more than Fenland businesses and East Cambridgeshire 24 times more”.
Implicit in his criticism is the fact LEP is pumping money into areas outside of its geographical territory – a situation the MP wants to rectify but which, he says, LEP have refused to countenance.
“This is an important issue as it concerns how £200 million of future business rates revenue is spent,” he said.
Mr Barclay said that when he met Mr Reeve last Friday questions were raised about the efficacy of agri tech bids from Fenland and how these were handled and on these specifically he wanted more detailed scrutiny.
The MP said there remained disquiet about the a major Fenland employer, MMUK Flowers, moving from Chatteris to the Alconbury enterprise zone and to a building built by Chalcraft within a complex championed by LEP. Part of the deal involves a five year “taxpayer funded five year business rate exemption”.
Mr Barclay said he had invited architects to value the contract for construction of the 24,000m2 building and they had estimated it about £20-£25 million.
“Board papers demonstrate that the chairman continued to play an active role in promoting the Alconbury site long after his firm is likely to have entered negotiations with MMUK Flowers,” said Mr Barclay. He wants a full chronology of events involving Chalcroft, LEP and Urban&Civic, the site owners.
Nigel Hugill, chief executive of site owners and developers Urban&Civic said: “The level of benefits was specifically designed to support businesses to grow in their period after relocation but not encourage them to move for the sake of the benefit. In addition, Urban&Civic and the LEP signed a Memorandum of Understanding which sets out key principles to avoid local displacement and “rate-hopping” companies moving to the site.
“The principles also ensure that the zone continues to play an important part in Cambridgeshire’s growth plans: providing space for inward investment and to enable growing companies who need to expand to stay in the area, rather than be lost to the county if they are forced to seek premises elsewhere.
But Mr Barclay says on the specific issue of MMUK Flowers it remains unclear when they contacted Urban&Civic with regard to a potential move to Alconbury, the involvement of LEP, and how the conflict involving Mr Reeve in his dual role was handled.
He said there was “lack of transparency” regarding recommendations put to the main board of LEP by its agri tech sub committee, with four of the nine members of that committee coming from Norfolk. Fenland had no representative on it.
Mr Barclay said G’s boss John Shropshire was on that committee and owned the land on which the Soham agri-tec innovation centre is located – it beat off a bid by Fenland for the investment. The MP says the “composition of the Cambridgeshire agri tech sub committee which shaped these funding decisions and how the programme was communicated to Fenland business is surprising”.
He said the sole agri tec grant to a Fenland business (in 2013) was to Law Fertilisers of Wimblington; Mr Shropshire’s daughter Annabel, a former director of Gs, is a director of Law Fertilisers along with her husband.
“These links do not show or suggest any impropriety by the individuals involved in the sub committee – we want individuals with expertise – and it is also expected that those with expertise will often have outside interests and links between them,” said Mr Barclay.
“However it is reasonable against the back drop of investment in Fenland to seek clarification as to the work of the sub committee, how any conflicts were managed and grants communicated, not least as Fenland’s only grant was linked to the Soham scheme.”
The MP also points out that a skills centre promoted jointly by Produce World and Fenland District Council in 2014 was unsuccessful when the Soham innovation scheme won the investment but did carry a caveat from LEP of further possible funding. He said LEP’s statement at the time offered a “commitment to support a proposal valued at £500,000 to support the food and drink sector”. That, however, says Mr Barclay had been dropped without reference to him or other stakeholders.
On relations with Cambridgeshire C0unty Council and Fenland Council, the MP says criticism by LEP that both authorities were to blame for poor communication in respect of the agri tech programme needs further explanation.
“These allegations made by the chairman and chief executive of LEP are serious but no written evidence has been provided to substantiate them,” he said.
The MP added: “Millions of pounds of public money are allocated to LEP and significant further money is expected in the next few weeks. Constituents have a reasonable expectation of transparency and accountability from LEP in respect of this money has been spent.”
In a statement earlier this week LEP detailed scrutiny arrangements by local councils and the Government.
“With regards to conflicts of interest, board members are asked to complete an annual submission.
“At each board meeting, members are asked to confirm if they have any conflicts of interest relating to the items on the agenda. If any conflicts of interest are declared, they are noted clearly within the minutes and the member will not participate in the decision making around these items.
“We are in the process of undertaking our annual review of the GCGP Register of Interests with all Board Members and will be publishing the latest version on our website soon.”
On Soham it said LEP “held an open competition in 2013 to establish an Agri-Tech Hub for the East. Two bids came forward, a multi-partnership bid for Soham led by NIAB and a skills-based proposal submitted by Produce World working with Fenland District Council. A full funding panel comprising sector experts was held to take a final decision on which project should proceed.
After careful consideration, the Soham scheme proceeded with unanimous support, with its clear approach to supporting the sector and business growth. The Fenland proposal, by comparison, was underdeveloped, lacked commercial engagement, and had less secure buy-in from the sector.
“Despite this, GCGP committed to supporting the sector and Fenland based businesses. More detailed conversations have taken place with Produce World concerning the rejected proposal, as well as wider engagement with the Agri-Tech community in Fenland and wider GCGP area. The outcome of this work was confirmation that the sector did not require a new Skills Centre, as many felt they could offer a new programme within their own facilities. It was also felt that Fenland had capacity within existing facilities to accommodate Agri-Tech activity, such as the Boathouse in Wisbech and South Fens Business Centre in Chatteris.
“The request from Agri-Tech businesses during the consultation was support in tackling Gangs and assisting vulnerable workers instead as a more pressing issue for the second. Secondly, helping attract young people into the sector by supporting a better understanding of careers available. A response by GCGP to these issues is set out below concerning Modern Slavery.
LEP also pointed out that at a meeting in April 2014 when funding for Soham was discussed, Mr Shrophshire left the room. The Eastern agri-tech growth initiative coverers two areas and has not directly funded to G’s group. LEP says G’s provided the land free of charge for a fixed period of time and also paid for some remedial work free of charge but received no part of the grant funding to do so.
On Alconbury it said that “it is important to note that all negotiations and packages for companies moving to either Alconbury Weald Enterprise Campus or Cambridge Compass Enterprise Zone are made by their owners/developers and not by the LEP.
“These are private, corporate arrangements made between the company and developers/ owners, and not managed or funded by the LEP.
“In the MMUK case, GCGP were only advised of the company’s relocation once Urban&Civic, Alconbury’s owners, had completed the deal to move to the Enterprise Zone.
On the food and drinks sector bid the statement said the district council’s failure to accept a local development order – a perquisite of the Government- stalled the bid. :
The statement concluded: “LEP does not feel it needs to change its approach to business engagement. We have good connections to business, which are generally only restricted by our limited capacity. We work closely with local authorities, business representative and membership organisations, and MPs across the GCGP area, where this works effectively.
“We do rely on referrals from partners to highlight the key opportunities and areas for development in their locality, and this could be strengthened in Fenland.