MPs: BAN FAT CAT S’ SECRET DEALS
They demand action after Mail exposes how ‘old pals club’ doles out public money
OFFICIALS should be banned from taking cash from any public bodies they run following a Daily Mail investigation, Dame Margaret Hodge declared last night.
The former chairman of the Public Accounts Committee said the law must be changed to stop board members benefiting from grants.
Her intervention came amid fury over the Daily Mail’s revelations that officials responsible for billions of pounds have been handing money to their colleagues’ firms.
The Commons Business Committee last night said it was investigating the ‘extremely serious issues’ – after the Public Accounts Committee also launched a major probe.
Officials oversaw the payments after getting places on boards called Local Enterprise Partnerships – or LEPs – which consist of business bosses and council chiefs and were put in charge of £7.3billion meant to kick-start economic growth.
Reporters found LEPs have made at least 276 payments to their own board members, their companies, or projects from which they stand to benefit. One received £1million for his call centre, while another got £13,000 of payments towards events at his family castle.
‘There is a quite clear and simple answer to all this – you outlaw it,’ Dame Margaret said last night. ‘Where you’ve got a conflict of interest, you have to choose – you either are a member of the board or you want to make money out of it.’
Last night the Government insisted LEPs should investigate any suspect payments themselves – and that this was not the Government’s job.
But MPs said this was ‘simply not good enough.’ Dame Margaret criticised the Government for failing to properly scrutinise LEP spending.
‘It is your money and my money that they are spending,’ she added.
‘When Government sets up these fragmented structures it always fails to put in place proper regulatory systems. It’s because the Government doesn’t care. What the Mail has uncovered doesn’t surprise me, what it does is depress me.’
Incredibly, there are currently no rules to prevent LEP officials from using the money they have received to award grants for their firms’ benefit, or to make decisions in secret.
LEPs have failed to account for at least £3.7billion of the cash they have been given by the Government, in their responses to Freedom of Information requests by the Mail.
The revelations are a major embarrassment for Chancellor Philip Hammond, who handed LEPs another £1.8billion in last month’s Autumn Statement. Meg Hillier, Public Accounts Committee chairman, has vowed a major probe into the payments and the ‘ utterly unacceptable’ lack of transparency. She said the boards were acting like ‘a cosy little club’.
Iain Wright, chairman of the Business, Energy and Industrial Strategy committee, said last night: ‘These are extremely serious allegations.
‘The Government doesn’t care’
LEPs have been given stewardship of massive amounts of public money. There appears to have been some appalling failings in accountability at some LEPs. We will want to know how they are spending public money and who is checking that they are spending it responsibly.’
Tory MP Philip Hollobone represents Kettering in Northamptonshire, the county where a banker on the LEP board received nearly £13,000 for his family’s Norman castle. He added: ‘The Daily Mail has played a crucial role in bringing these issues to national attention and is providing much needed scrutiny about how this money is being spent.
‘But it shouldn’t have been up to the Daily Mail. It is clear when LEPs were set up proper systems for scrutiny were not established. I would welcome further investigations from organisations like the PAC.’
The TaxPayers’ Alliance accused Government of ‘frittering away taxpayers’ hard-earned money’. Chief executive John O’Connell added: ‘Many of these cases quite frankly do not pass the smell test.’
Downing Street insisted it was ‘for those councils and partnerships’ to investigate ‘individual allegations’. But every council contacted by the Mail over suspect LEP payments has refused to investigate them.
Many councils and LEPs share the same staff, and when contacted by the Mail many councils offered joint statements with the LEP – apparently failing to understand they were supposed to be carrying out independent scrutiny.
The Prime Minister’s official spokesman said: ‘We expect these partnerships to maintain the highest possible standards.’
She said that after the Mail contacted the Government with its concerns it had taken action.
‘We strengthened the rules to make sure there was greater transparency,’ she added. ‘We have been very clear that we won’t hesitate to act if any LEP fails to comply with the new tougher standards.’