Greater Lincolnshire LEP told to improve - or position could become ‘untenable’
The Greater Lincolnshire LEP signed a five-year growth deal in 2016 with the Government worth £124m, money it is using to stump up half the cash for the £8m Humber Link Road in North East Lincolnshire.
By Grimsby Telegraph | Posted: 21 Mar 2019
The venture set to be in charge of Lincolnshire’s Brexit money has been warned that parts of next year’s cash could be withheld if its performance does not improve.
The Greater Lincolnshire Local Enterprise Partnership (LEP) has been warned by senior Government officials that it might not receive its full £18m allocation to spend upfront in 2019/20 after it was deemed to have too much of its budget left this year.
LEPs have been earmarked by ministers as the route for distributing post-Brexit regional funding. Currently, the UK pays its money to Brussels and some of the cash, via different European Union funding pots, makes its way back to communities in Britain. In the future, it will be the LEPs which decide and monitor how that money is spent.
That decision had led to extra scrutiny on LEPs’ performance and has seen fresh pressure on Greater Lincolnshire LEP – which counts both North East and North Lincolnshire councils as board members – to get a grip on costly Lincolnshire projects.
Founded in 2011, the Greater Lincolnshire LEP represents Grimsby’s seafood processing cluster and agricultural interests in northern Lincolnshire, as well as overseeing major infrastructure spending across the county. It signed a five-year growth deal in 2016 with the Government worth £124m, money it is using to stump up half the cash for the £8m Humber Link Road in North East Lincolnshire, due to connect Grimsby’s Moody Lane to Stallingborough’s Hobson Way.
Workers at Icelandic Seachill’s factory in Grimsby package up fish and chips
According to minutes of a recent government review seen by the Grimsby Telegraph, officials told the Lincoln-based LEP it was in danger of having part of its £18m budget for next year held back because of its failure to spend all of its government-granted money this year.
LEP bosses said delays to projects it was investing in were “beyond our control” but admitted to experiencing delivery “problems” in the past 12 months.
The Cities and Local Growth Unit (CLGU) – the cross-departmental LEP scrutiny body – made its displeasure at the situation clear, telling Greater Lincolnshire its position could become “untenable” if the underspending continued.
The minutes from the meeting on January 10 said: “CLGU summarised that…the LEP would need to make sure that it had taken all possible action [to ensure projects were delivered] rather than just what was required as a minimum – if progress on spend failed to match the revised forecasts at the end of 2019, the LEP’s position would become more untenable.”
Officials said they wanted to review the Greater Lincolnshire LEP’s performance every six months and the Government has confirmed it has ordered the board to put an improvement plan in place.
A Government spokeswoman said: “We want tax payers’ money to reach the communities it’s intended for, supporting projects that will stimulate local growth, but also ensuring that any delays to their delivery are minimised.
“To guarantee that vital funding is being delivered in the most effective way in Greater Lincolnshire, an improvement plan will be agreed with all parties by the end of this month.”
Ruth Carver, director of the Greater Lincolnshire LEP, admitted that the LEP had run into “problems” on the delivery of big projects in the past year
The LEP had a “spend allocation target” of £8.7m for 2018/2019 but £1.7m – almost 20 per cent of its allocation budget for this financial year – is being rolled over into next year after going unspent. LEPs are permitted to rollover underspend into the next financial year – April to April – using a power called a ‘section 31 flexibility’ but LEPs are not expected to finish March with great chunks of their budget still intact.
The review unit, the CLGU, said the amount “exceeded the level that CLGU would normally be comfortable with”.
The Lincolnshire LEP was due to see its capital budget – money it can invest or loan for infrastructure improvements – set at £18m in 2019/20 but Whitehall has warned that not all that money will be made available in April if its record on delivering large-scale projects does not improve.
The minutes from January’s review said: “CLGU intimated that in assessing performance on delivery by LEPs across the country, the unit would be considering how future allocations should be released to encourage and reward accelerated spend.
“In the case of GLLEP [Greater Lincolnshire LEP], it would need to consider whether it would be appropriate to release the full 2019/20 allocation in April 2019 given the level of use of section 31 flexibilities.”
A source close to the review process described the CLGU’s verdict, as recorded in the minutes, as a civil servant’s equivalent of a “right rollicking”.
A concerned business figure, who asked not to be identified, said: “With the new post-Brexit money coming, the last thing we want is a reputation for non-delivery because that might affect future allocations for our area.”
The Government is keen to ensure LEP spending and accountability is in good shape so that the public-private ventures are able to handle the influx of extra Brexit cash and the added media and public scrutiny that will come with it – one reason why it has come down hard on the LEP at the most recent review.
With the current cycle of growth deal funding due to end in 2021, the Government is keen to see all of Lincolnshire’s £124m invested in Lincolnshire’s businesses before that five year period ends.
Ruth Carver, director of the Greater Lincolnshire LEP, admitted that the LEP had run into “problems” on the delivery of big projects in the past year.
This was also made clear in the minutes from the review, which stated: “The LEP acknowledged that it continued to face challenges in delivery, including complex issues in large priority projects such as a judicial review, a public inquiry, delays in [European Structural Investment Funds] contracting and problems in working with national agencies including Network Rail and Homes England.”
The minutes also cited issues with the Lincolnshire Lakes
The minutes also cited issues with the Lincolnshire Lakes, a project due to create 6,000 homes and new community facilities on land between Scunthorpe and the River Trent, which was called in for judicial review by Scunthorpe United Football Club . The project has also been delayed due to flooding concerns.
Ms Carver said: “The LEP does not exist to provide small grants for simple projects. We are here to deliver transformational and positive change across Greater Lincolnshire.
“Through the growth deal we are funding 29 projects, many of which are large and complex schemes which will have a profound impact, such as £4m towards mitigation and the Humber Link Road in the SHIIP (South Humber Industrial Investment Programme], £28m towards the Grantham Southern Relief Road, and £5m towards a new medical school in Lincoln.
“We work with a number of partners on all 29 projects and some of the larger more complex schemes have experienced delays.
“The causes of these delays have been beyond our control and include legal challenges and negotiations with national bodies such as Highways England and Network Rail. The larger projects which have unfortunately been delayed include the Grantham Southern Relief Road, Lincolnshire Lakes in Scunthorpe and the South Humber Industrial Investment Programme.”
The director said the LEP said it had “received no indication” that its funding could be lowered next year.
She added: “Our programme management has been robust throughout. We are developing an improvement plan that we will agree with Government and we have received no indication or discussion with Government that our funding for next year will be re-profiled.”