Trouble at the LEP: Why £38m of Government cash is being withheld from this region

29th November 2017

Tens of millions of pounds of public cash has been withheld from west Norfolk, west Suffolk and Cambridgeshire because of concerns over the way the group which spends that money is being run.

Local Enterprise Partnerships (LEPs) are given money each year by the Department for Communities and Local Government (DCLG) to support businesses in their areas.

But the LEP covering Cambridgeshire, west Norfolk and west Suffolk, called Greater Cambridge and Greater Peterborough (GCGP), has had around £38m of investment from the Government withheld after a series of allegations were made by North East Cambs MP Stephen Barclay about the way it was run.

The concerns centred on the chairman of the GCGP, Mark Reeve, as well as conflicts of interest and transparency.

Those concerns sparked an investigation by the National Audit Office (NAO) which published its findings today.

It said: “Foremost among Mr Barclay’s concerns was that the chair of GCGP LEP (Mr Reeve) might have benefited from investment in GCGP LEP’s area of operation.”

Mr Reeve is a shareholder and chairman of the board of directors at a King’s Lynn construction company, called Chalcroft Limited.

Chalcroft got a contract to build a base for a company in one of the GCGP’s enterprise zones at Alconbury Weald.

The GCGP’s legal advisor found there was no conflict of interest,

But the NAO report also said an investigation by the DCLG into the GCGP found concerns about the timeliness and availability of board papers and the management of conflicts of interest. It found no evidence that public funds had been misused.

Mr Reeve’s resignation from the GCGP was announced last week.

Meg Hillier MP, chair of the committee of Public Accounts, said the ones to have lost out from the “sorry affair” were those living in the area which has had investment withheld until the GCGP “puts its house in order”.

A spokesman for the GCGP said they took “all matters relating to governance and transparency very seriously” and “acted in a swift and appropriate manner to effectively implement suggested improvements to their processes.”

They added: “All of these issues have been comprehensively addressed by the LEP.”

Mr Barclay said the “damming” NAO report had justified the concerns he raised.

He said: “Having raised concerns in January and asked the NAO to investigate in March, and after repeated public statements by the LEP that my concerns were inaccurate and misleading, it took a further six months before the (Cambridgeshire) County Council and LEP put in place the necessary improvements.”

A decision has yet to be made about when the government will release the money now the investigation has closed.

Separately, concerns about transparency at the LEP covering Norfolk and Suffolk, called New Anglia, were raised in an investigation by this newspaper earlier this year.