MP wants National Audit Office inquiry into Cambridgeshire Local Enterprise Partnership amid fresh conflict of interest concerns
PUBLISHED: 11:06 10 March 2017
MP Steve Barclay has written to the National Audit Office calling for an inquiry into the running of two major bodies responsible for millions of pounds worth of investment in Cambridgeshire.
In a 25 page report to Sir Amyas Morse, comptroller and auditor general, Mr Barclay details allegations against the Greater Cambridge Greater Peterborough Local Enterprise Partnership (LEP) and the Greater Cambridge City Deal.
The National Audit Office – which scrutinises public spending on behalf of Parliament but is independent of any ministry or minister- has extensive powers to examine documents and to interview staff if they feel an inquiry is warranted.
The report also sets out a list of transactions the MP wants “clarified” involving the New Anglia LEP that operates throughout Norfolk and Suffolk.
Mr Barclay has sent copies of his report to local government minister Andrew Percy and to the chairs of both the public accounts committee – of which he was a member until he became a Government whip- and the treasury select committee.
The NE Cambs MP has posted a series of explosive reports about the LEP since the beginning of the year and held meetings with their senior officials at which he has spelt out his misgivings.
Today’s report is the most challenging in questioning the governance of the LEP and the City Deal with which it is closely associated.
“The relationship between prominent local developers, the LEP and City Deal is opaque and open to abuse given the overlapping private business interests of board members and developers,” says Mr Barclay.
He says the LEP has been allocated over £150 million by the Government with the City Deal due to receive up to £1 billion. Under a new round of funding from the Government, the LEP is due a further £37.6 million next month.
“The LEP has failed to answer questions regarding the close relationship of key LEP board members with a small number of property developers,” says Mr Barclay in his letter to Sir Amyas.
“These developers have enjoyed significant increases in profits whilst benefiting from large grants or loans from the LEP or bodies working closely with the LEP.”
A running theme throughout Mr Barclay’s report is the relationships and declarations of interest provided by Mark Reeve, chairman of the LEP who is also chairman of the privately owned Chalcroft Holdings Ltd of King’s Lynn.
Its subsidiary Chalcroft Construction is currently building a £20 million, 24,000 square metre new factory for MM Flowers and MMUK (Grape) at Alconbury Weald near Huntingdon, an enterprise ‘campus’ supported by the LEP as a key part of its strategic economic plan.
The LEP has always insisted that the decision to award the contract to Chalcroft was a “separate commercial arrangement” and therefore did not involve any conflicts of interest so far as Mr Reeve was concerned.
However, Mr Barclay is urging the National Audit Office to examine all aspects of the contracts awarded to Chalcroft on sites funded by the LEP and its counterpart body in Norfolk and Suffolk, New Anglia.
Mr Barclay says there is a “lack of transparency regarding how investment decisions have been reached and the criteria applied”.
Included in Mr Barclay’s report is a lengthy section detailing a £500,000 loan by the New Anglia LEP to kick start a petrol station and a McDonald’s drive through restaurant at Fiveways roundabout near Mildenhall. The £3 million contract to develop the site was awarded to Chalcroft.
A LEP spokesman said: “The Greater Cambridge Greater Peterborough LEP is compliant with the Government’s Assurance Framework. We would be happy to answer any further questions the National Audit Office or Government may have regarding the matters raised.”
A City Deal spokesman said a more detailed response is being prepared: they pointed out the funding deal with the Government is worth £500 million over the next 15 years for transport infrastructure and not £1 billion.
The spokesman said: “The Greater Cambridge City Deal is an economic partnership, of which the LEP is a key partner, working with Government to secure sustainable growth in the Cambridge and South Cambridgeshire area for the benefit of the local and UK economy. “It operates as a joint committee of the three partner councils* and, as such, is governed by Local Government legislation, including that relating to transparency.
“We have been made aware of Mr Barclay’s letter but have otherwise had no prior contact nor queries from him on this matter. We are satisfied there is no conflict of interest in the LEP’s role and would be very happy to speak to Mr Barclay to set the record straight on this matter.”
A spokesman for New Anglia LEP said Chalcroft Construction has been involved in two projects funded by New Anglia LEP.
“In 2014 New Anglia LEP awarded a £500,000 loan through its Growing Places Fund to developers Pigeon (Fiveways LLP) towards the redevelopment of a site on the A11 at Barton Mills,” said the spokesman.
“This was repaid in full with interest in January 2017. Pigeon appointed Chalcroft Construction to carry out part of the works. New Anglia LEP played no part in the appointment of any of the contractors involved in the project.
“In 2014 New Anglia LEP awarded Easton and Otley College £2.5m funding from its Growth Deal with Government towards to building of a new Construction Skills Centre. Easton and Otley College appointed Chalcroft Construction to build the centre. The contract was awarded by the college under public procurement rules. New Anglia LEP played no part in the awarding of the contract.”