Senior commercial lawyer Nick Maltby at Bircham Dyson Bell LLP is warning of the potential pitfalls of Local Enterprise Partnerships (LEPs) in the wake of the Deputy Prime Minister's announcement that funding allocated to successful bids may increase.
"LEPs will absolutely foster the correct mindset in terms of local organisations working together with local government to do what's best in their own regions - but from a legal standpoint LEPs will be non-public entities with responsibility for public money - and that raises concern," explains Nick.
"LEPs are simply voluntary partnerships based on business relationships with no formal powers, chaired by a private sector person and left up to each LEP to decide what form those relationships should take. Add to that the £1.4 billion of public money to manage between them, and you have to ask - who is accountable legally speaking if anything goes wrong?
"I think the approach is the right one - the LEPs will foster an entrepreneurial approach to drive growth which is the polar opposite of the last two decades where we've been spoon fed by central government. Business must work more closely with local government to kick start the economy - but public money must be accounted for correctly to avoid fall out further down the line.
"Going forward, the Government has stated that it will not issue guidance to tell the LEPs what they should and shouldn't do - it's entirely up to them. But where funding is involved, there should be some guidelines to protect public money."
"We will be relying upon local councils to hold all parties accountable, and that will require absolute transparency and accountability."
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