Jonathan Werran 06 December 2013

Local growth funding plummeted in transition to LEPs, NAO reports

Local growth funding plummeted in transition to LEPs, NAO reports image

Ministers have defended the Coalition’s progress at driving local economic growth programmes following a spending watchdog report which found the transition to Local Enterprise Partnerships was ‘not orderly’ and led to a massive drop in spending.

A report today from the National Audit Office (NAO) finds although the abolition of the nine Regional Development Agencies was effectively carried out, their replacement with new programmes devolved to local level was managed under different time frames.

In part consequence, direct central government expenditure on local economic growth plummeted from £1.46bn in 2010/11 to only £273m in 2012/13, the NAO reported.

Overall Coalition spending on local growth in the current spending round to 2014/15 is expected to be £6.2bn, compared with the £11.2bn expenditure channelled by Regional Development Agencies between 2005/06 to 2009/10.

The watchdog advised government departments to plan any future such transitions more effectively and ensure sufficient capacity was in place at central and local level to oversee programmes and ensure clear accountability.

The Department for Business Innovation and Skills and the DCLG, were also told to address how they plan to monitor future outcomes and performance of growth plans including the Single Local Growth Fund and City Deals.

Amyas Morse, head of the National Audit Office, said: ‘Three years on from the 2010 white paper, the new Local Enterprise Partnerships are taking shape and jobs are being created. But the transition from the old to the new schemes has not been orderly and there has been a significant dip in growth spending.’

‘To secure value for money from both the existing schemes and the new £2bn Growth Deals, central government needs to make sure that there is enough capacity centrally and locally to oversee initiatives, that timescales are realistic and that there is clear accountability.’

In response, local growth minister Kris Hopkins said: ‘This Government is taking the difficult decisions needed to tackle the deficit inherited from the previous Government, and thanks to our long-term economic plan, we're now seeing the UK economy growing faster than any of our competitors.

‘We are investing billions through our growth programmes, supporting thousands of local businesses, securing billions in private sector investment, boosting skills and creating tens of thousands of much needed local jobs.'

‘And we are now reaping the rewards, with the latest GDP figures showing the economy is back on track, with the deficit falling and employment at its lowest for more than three years.’

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