Outgoing audit chief tells government some home truths

“I still get angry – and that is the word for it, angry – 10 years into the role, when I see badly-thought-through programmes and wasted public money,” says outgoing watchdog chief Sir Amyas Morse. “And the reason I’m angry is because the citizen ends up picking up the tab. They are the ones who end up suffering.”

For almost a decade, as comptroller and auditor general – the head of the National Audit Office – it’s been Morse’s statutory duty to keep an eagle eye on the spending of central government departments, holding ministers and civil servants to account for cost overruns, project mismanagement and profligacy with taxpayers’ money.

He doesn’t have far to look. As he prepares to leave his post in May, Morse’s final public speech at the Institute for Government last week included a damning list of failures: Crossrail costing £2.8bn more than forecast; changes to probation costing £467m to put right; the smart meters fiasco that will cost at least £500m more than originally estimated; and the Ministry of Defence’s latest unaffordable and unsustainable 10-year equipment plan going over budget by at least £7bn. And that’s just a selection from the past few months.

Morse looks back in anger at the billions that could have been spent on vital services, wasted instead through what he calls “inappropriate bravado” on the part of government ministers, lording it over cowed civil servants, behind an increasing amount of secrecy and spin. “We don’t need people jumping out of an aeroplane in the dark with a parachute of taxpayers’ money,” he says.

A proud Scot – his only meeting with Theresa May was a “brief conversation” at a No 10 Burns Night last year – Morse cares passionately about public services. While his upbringing has contributed to his concern for fairness, it’s his decade at the watchdog, to which he came from a senior position in consultancy PricewaterhouseCoopers via the MoD, that has fuelled his rage over the wasteful ways of too many government ministers. “I really realised that society belongs to us. We’re all paying for it.”

Public money is finite, he points out. There is no magic money tree. When money is lost in one place, it’s taken away from another programme, usually one that’s easier to cut. Every wasted £1bn, he says, is enough to run NHS England for three days, fund 625m A&E attendances, 135m day cases in hospital, or 4m ambulance attendances.

Morse has warned the government that it needs to invest more in the NHS and social care, to meet the needs of an ageing population. In 2016-17, the UK spent just over £170bn on health and social care – more than 10% of GDP, but less than the 11.2% of GDP Germany spent in 2015 on health alone. …”

https://www.theguardian.com/society/2019/mar/20/amyas-morse-head-national-audit-office-ministers-waste-taxpayers-billions

“Public Accounts Committee calls for ‘step change’ in transparency in local public bodies”

“There is a need for a step change in transparency by local public bodies and particularly those in the NHS, MPs have said.

In a report, Auditing local government, the Public Accounts Committee noted that in 2017-18, auditors found that more than 1 in 5 local public bodies did not have proper arrangements in place to secure value for money for taxpayers.

“The numbers are worst for local NHS bodies such as clinical commissioning groups and hospital trusts, where 38% did not have proper arrangements,” it said.

The MPs added that some local bodies were not putting enough information in the public domain about their performance, including reports from their external auditors.

The report called on central government departments to make clear their expectations, “not only for what is made publicly available, but also for making the information accessible to users and so helping citizens to hold local bodies to account”.

The PAC said there appeared to be few consequences for those local bodies who did not take auditors’ concerns seriously and address them promptly. “Even where local auditors use their additional reporting powers to highlight failings, this does not always lead to the bodies taking immediate action.”

The report also recorded the MPs’ concern that, as partnership working becomes more complex, accountability arrangements will be weakened, and the performance of individual local bodies will become less transparent.

Meg Hillier MP, chair of the committee, said: “Taxpayers must be assured that their money is well-spent but in too many cases local bodies cannot properly safeguard value. Particularly concerning are NHS bodies such as Clinical Commissioning Groups and hospital trusts: last year almost two in five did not have adequate arrangements.

“As we reported last week, many CCGs are underperforming and this must improve as they take on responsibility for commissioning services across larger populations.”

Hillier added: “It is vital that local bodies take auditors’ concerns seriously, address them swiftly and ensure meaningful information on performance is made accessible to the public.

“Our report sets out ways central government can help to drive improvements at local level and we urge it to respond positively to our recommendations.” …”

https://www.localgovernmentlawyer.co.uk/governance/396-governance-news/40088-public-accounts-committee-calls-for-step-change-in-transparency-in-local-public-bodies

Knowlegate “Flog it” – some “answers”

Response to Freedom of Information request”

“Thank you for your request for information. Please find the response to your query below.

“Recently an email from a Conservative councillor was released into the public domain regarding the purchase of a “very large table in the members room” as a result of “an auction of council furniture, chattels, etc” to the benefit of members and EDDC staff. The email went on to state “I have been told that I have been successful in my bid so the table along with the 8′ extension is heading back to Exmouth to sit in (address of councillor), Exmouth in its rightful town (some may say)” and then stated arrangements for its removal date in order that it could be used for the Councillor’s Christmas dinner for 22 family members. Subsequently on 21st December 2018, the Leader of the Council made a statement about the disposal of a range of items, including this table. He said the large table “attracted little professional interest with one valuer estimate of just £50”. I would like to know:

1. If one valuer’s estimate was £50, what were the other estimates?
Other valuers viewed but were not interested in estimating for the table due to its low value

2. What are the names of the valuers who gave estimates for the table?
The other agents who attended to provide estimates were;
Potburys
Whittons
Lyme Bay
MST

3. Does EDDC audit not require a range and record of estimates for the disposal of council assets, as well as a record of disposals?
It is not clear what specific information is being requested here. Bids and disposal receipts will be recorded.

4. EDDC, like other councils, should have a written policy and procedure for the disposal of assets such as used equipment, furniture and other plant, What is that policy and procedure?
There is a link below to the ‘Property Matters’ section of the Council Constitution which is on our website, specifically items 15 & 16;

15. Authority (after consultation with the relevant Portfolio Holder) to dispose of property assets which have a market value which does not exceed £30,000.
16. Sale of vehicles, equipment or machinery surplus to the Council’s needs where the consideration does not exceed £30,000.

http://eastdevon.gov.uk/media/2537547/cj…

5. Who was the Councillor that successfully bid for “the very large table in the members room”?
This information is exempt from disclosure under s40 of the Freedom of Information Act as being personal data.

6. How much did the Councillor pay?
The bid was £400

7. Was the ornate clock on the mantel piece (as shown on the cover of the Residents Magazine, December 2018) part of this disposal process?
The clock in question originally belonged to Honiton Rural District Council and has been offered to Honiton Town Council.
If so, what was the valuation given? ? See above
What price was paid? ? See above
Who bought this clock? ? See above

8. How much money was raised from this sale of “items of sentimental interest or practical use”?
The items have not been sold yet so no information is currently held. We anticipate that a figure in the order of £2,000 will be raised which will be ring-fenced in the Civic Fund.

9. What are the “other sales” Councillor Thomas refers to?
The vast majority of items are office furniture (desks, chairs, cabinets). Items will be disposed of in a number of ways. These include via public auction, items given to local groups, town and parish councils in return for donations and income from bulk clearance.

10. How much money was raised from each of these “other sales”?
No information held

11. What is the total now of the Chairman’s Civic Fund?
The Civic Fund is a budget and therefore there is no ‘total’ fund as such. The ring-fenced fund is currently £0 as the items have not been made available for collection / payment.

12. Information about the Chairman’s Civic Fund is not easily accessible on the EDDC website; a word search on the site produces “no result”. Where can details of this fund and its administration be found?
Civic Fund and Civic Expenses are agreed as part of the Council’s annual budget: this is identified in the Councils approved Budget book for 2018/19:
http://eastdevon.gov.uk/media/2413383/re…
The relevant items can be found on page 7 and page 24.

I hope this information is helpful but, if you feel dissatisfied with the way we have responded to your request, please contact our Monitoring Officer, Mr Henry Gordon Lennox, to request an internal review [email address]

You may also approach the Information Commissioner for advice at http://www.ico.org.uk

https://www.whatdotheyknow.com/request/auction_of_council_furniture_cha#incoming-1300789

Improving standards in public life (hint: a good few of our councillors fail the suggested tests!)

“On 30 January 2019, the Committee on Standards in Public Life published its long-awaited report on local government ethical standards, reflecting evidence obtained via a consultation exercise carried out from January-May 2018.

The report makes 26 recommendations.

Below we highlight the top five that will be of interest to local authorities, in particular to monitoring officers.

Some of the recommendations could be implemented quickly without the need for primary legislation – most important of these is the recommendation concerning amendments to registrable interests.The wide-ranging report, which runs to over 100 pages, finds that while the majority of councillors and officers maintain high standards of conduct, there is clear evidence of misconduct by some – mostly bullying, harassment or other disruptive behaviour. The report also raises concerns about risks to standards under the current rules governing declaring interests, gifts and hospitality.

The report provides an excellent review of the current framework governing the behaviour of local government councillors and executives in England and then makes a number of recommendations to promote and maintain the standards expected by the public. While it identifies numerous points of best practice, it makes 26 separate recommendations for improvement.

Top five recommendations

The top five recommendations, likely to be of most interest to those in local government, are:

Updating the model code and extending it to parish councils: the report finds considerable variation in the length, quality and clarity of local authority codes of conduct. It therefore recommends enhancing quality and consistency by requiring the Local Government Association to create an updated model code. In a bid to help ease the burden on principal authorities (who must investigate code breaches by parish councillors), the report also recommends requiring parish councils to adopt the code of conduct of their principal authorities or the new model code.

Presumption of official capacity: perhaps the most arresting suggestion, the report recommends combatting poor behaviour by presuming councillors to act in an official capacity in their public conduct, including statements made on publicly-accessible social media. This arises from the perennial concern that the current understanding of public and private capacity is too narrow, undermining public confidence.

Extending the list of registrable interests: the report considers that current arrangements for declaring councillors’ interests are too narrow and do not meet public expectations, so it suggests refining the arrangements for declaring and managing interests, including extending the list of registrable interests to include two categories of non-pecuniary interest:

(1) relevant unpaid commercial interests such as unpaid directorships; and

(2) trusteeship or membership of organisations that seek to influence opinion or public policy. As this does not require primary legislation to be implemented, this is one recommendation which may soon be acted upon. We are particularly pleased to see written evidence submitted by members of Cornerstone Barristers was cited in relation to recommendation (iii): see more below.

A new “objective” test for when councillors must withdraw or not vote:

monitoring officers will be particularly interested in the discussion in the report about the need to update the test for when councillors are forbidden from voting or participating in discussion on matters in which they have an interest.

The report recommends the test be overhauled and that councillors be required to refrain from voting or withdraw whenever they have any interest at all – whether registered or not – that a member of the public would reasonably regard as so significant as to likely prejudice the councillor’s decision-making.

Strengthening the sanctions system:

the report considers the current sanctions insufficient and so recommends allowing local authorities to suspend councillors without allowances for up to six months, with suspended councillors enjoying a right of appeal to the Local Government and Social Care Ombudsman for investigation and a binding decision on the matter.

Other conclusions and recommendations

The report further concludes that there is no need for a centralised body to govern and adjudicate on standards and that various benefits exist to local authorities maintaining their responsibility for implanting and applying the Seven Principles of Public Life.

A number of other recommendations are likely to be of interest, including:

Assisting local authority monitoring officers, the “lynchpin of the arrangements for upholding ethical standards” (p 81), by extending disciplinary protections and offering additional training for the statutory officers who support them.

Giving local authorities a discretionary power to establish a standards committee to advise on standards issues and decide on alleged breaches and/or sanctions for breaching the code of conduct.

Abolishing the current criminal offences in the Localism Act 2011 relating to disclosable pecuniary interests, which are said to be disproportionate in principle and ineffective in practice.

Requiring local authorities to take a range of steps to prevent and manage conflicts of interest that can arise when decisions are made in more complex and potentially less transparent contexts such as Local Enterprise Partnerships and joint ventures.

Fostering an ethical culture and practice by requiring councillors to attend formal induction training by their political groups, with national parties adding the same requirement to their model group rules.

The report recognises that many of its recommendations would require primary legislation and therefore be subject to parliamentary timetabling. The remaining recommendations – in particular those relating to registrable interests (as mentioned above), statutory officers and formal training for councillors – could however be implemented relatively quickly.

The Committee intends to monitor the uptake of its suggestions in 2020.”

Robin Green, Estelle Dehon and Dr Alex Williams, all members of the Cornerstone Planning and Government teams, submitted written evidence item 281 to the committee. Their evidence was cited at p 45 of the report in relation to recommendation (iii) above, on registrable interests.

Robin and Estelle are also contributors to Cornerstone on Councillors’ Conduct (Bloombsury Professional, 2015), which identifies and explains the law following the changes implemented by the Localism Act 2011 in relation to the standards system governing the conduct of elected members in local government.”

https://www.localgovernmentlawyer.co.uk/governance/314-governance-a-risk-articles/39908-improving-ethical-standards

EDDC: “Relocation cost, No Deal Brexit, electric charging points and climate change motions rejected from being discussed”

Owl says: remember, the Chief executive, Mark Williams, is supposed to be a NEUTRAL civil servant and yet ALL of the refused motions are from ALL the minority groups ONLY……!

“Motions to support recycling, to call for a new property ombudsman to streamline complaints against shoddy builders, and for East Devon to get its fair share of the police precept rise will be discussed at next Wednesday’s full council meeting.

But motions over the full relocation costs of the move from Sidmouth to Honiton, to put electric charging points in all car parks, what to prioritise in a ‘No Deal’ Brexit and on climate change will not be discussed.

Various motions that councillors had put forward for debate at East Devon District Council’s full council meeting on Wednesday, February, were rejected by the council’s chief executive, as either the agenda already provides the opportunity for debate or the wording of the motions were inaccurate.

RELOCATION

Cllr Cathy Gardner had proposed a motion calling for the council to commit to publish an annual ‘summary of accounts’ for the relocation project until break-even is reached as relocation from Sidmouth to Honiton was proposed and predicated on the basis that the project would breakeven within 20 years and deliver cost-savings to the council tax payers of East Devon.

Cllr Gardner said: “Whilst some of this information is already available we feel it is vital for the ongoing costs to be published to show confidence that this project will breakeven. A majority of Councillors voted for relocation on the basis that money would be saved on energy bills. We are left unsure of whether breakeven will ever be proven.”

But an EDDC spokesman said: “The rejected motion contained inaccuracies and omissions that had the potential to mislead councillors and it was also premature. It is however proposed to bring a report to the next meeting of the Cabinet that will summarise the position reached with regard to the sale of the Knowle and the relocation. Cllr Gardner can raise the matters she is concerned about as part of the debate into that report.”

The motion would have called for the accounts to include

energy costs for the Knowle for the past 20 years (for comparison);

energy costs for both Blackdown House and Exmouth Town Hall per year;
the capital receipt for the sale of the Knowle;

a Red Book valuation of Blackdown House as of 1 March 2019;

the full costs for the relocation project since its inception, including: project management; removal, furnishing and equipment;

staff retraining and travel expenses;

new-build costs for Blackdown House; refurbishment costs for Exmouth Town Hall; and any other associated costs.”

CLIMATE CHANGE

Cllr Matthew Booth’s motion had called for the council to recognise that Climate Change and Global Warming are the key issues of our time, to acknowledge the strong concerns of young people in particular the recent walk out of school children and for the council to commit to introducing a policy of carbon measurement and reduction within all aspects of its own activity.

He said: “I personally do not care how we begin to do this, or who does it, but that we act now not wait for some planned strategy in the future.”

An EDDC spokesman said that the issue of climate change emergency is acknowledged to be of critical importance but that it would be appropriate to wait to see what Devon County Council decides. They added: “Currently, however, the County Council is considering its position and will shortly debate the matter. As we are in a two tier area it is appropriate for the District Council to assess the position taken by the upper tier authority and then respond accordingly. The public would expect us to work in partnership with the County Council rather than unilaterally.”

ELECTRIC VEHICLE CHARGING

Cllr Eleanor Rylance had submitted a motion calling for the council to plan for and implement over the next five years a full rolling renovation programme of its car parks estates to fit and bring into operation electrical charging points at every space for domestic cars, and cycle parks with charging points for all types of cycle and that there should be mandatory EV charging points for the parking spaces of every new-built house in East Devon.

She added: “This council should approach the future of electrically-powered domestic vehicles with enthusiasm and proactivity, play a positive role in helping develop the use of electrical and should make this infrastructure, that will be a necessity within the next ten years, available in advance of full electrification of domestic vehicles in 2042.

But an EDDC spokesman said: ““The agenda already provides an opportunity for this issue to be raised so this motion was inappropriate.”

BREXIT

Cllr Rylance had also submitted a motion that said in the event of a No Deal Brexit or a version of Brexit that causes significant disruption, the council should approach this event as a situation of emergency in respect of its most vulnerable residents, dedicating any available human, material and financial resources required to palliate any negative outcomes for these groups, but the motion was rejected.

Talking about all the motions, a council spokesman said: “The council agenda for February contains the most important annual decision, namely the setting of the budget and the approval of the Council Tax for the forthcoming year. The process leading to this meeting has included several meetings where members were encouraged to raise all items of future relevance so these could be assessed as part of our service planning process and for assessment as part of the budget.

“It is unfortunate that some members did not take these opportunities and have chosen instead to submit their proposed motions.

“It is also noted that the wording of the motions was not checked in advance with relevant officers who would have been able to give timely advice as to their wording.”

But motions on the police precept, protection for new home owners and supporting recycling will be discussed.

POLICING

Cllr Tom Wright’s motion says: “In view of the £24 per band D property increase in policing precept, this council urges the Chief Constable to recognise the needs of East Devon when deciding how to allocate extra resources. East Devon residents are the biggest contributors to the police budget in Devon, other than Plymouth. It is only fair that we should get a fair share of the larger cake.”

NEW HOMES

Cllr Douglas Hull’s motion says: “The Government has stated that it would therefore be introducing as a priority a new property ombudsman to streamline complaints against shoddy builders. As a council that not only provides an excellent and highly regarded building control service but also has seen significant levels of new building in its district, we call on the government to fulfil its pledge to provide this much needed remedy for homeowners as a matter of the highest priority.”

RECYCLING

Cllr Peter Burrows’ motion says: “This Council continues to support the fine work done by the EDDC Recycling team in achieving the best results in Devon and to support and encourage local Organisations and voluntary groups who are involved in trying to reduce the amount of single use plastics used in their communities & beaches by making resources and expertise available, where appropriate. The order of priority should be – Reduce, Reuse, Recycle. To actively help promote such activities through the Councils social media platforms.”

The full council meeting will be held at East Devon District Council’s new Honiton Heathpark HQ on February 27 at 6pm.”

https://www.devonlive.com/news/devon-news/relocation-cost-no-deal-brexit-2557565

“Knowlegate”: Del-Boy and the Trotters spring to mind – but just the fools (no horses that we know of)

“East Devon District Council’s senior management team have been rebuked by scrutiny councillors after failing to consider the public perception over the sell-off of assets from their former Knowle HQ.

The council this week completed its move from its former Sidmouth home at the Knowle, to Exmouth town hall and the new Honiton Heathpark HQ, and as part of the move, they had to find homes for various items that are unsuitable for its new building.

But a furore erupted just before Christmas when it was first revealed that council staff and members, but not the general public, were given the chance to bid on various items, and then when an email was leaked claiming a councillor managed to buy a large mahogany dining table and 20 chairs for £50 at the internal staff auction, instead of allowing it to be publicly auctioned for the best possible price.

A council spokesman had said that this leaked information was totally incorrect with the bid being for £400 and only including some of the chairs, and that the bid was withdrawn when Exmouth Town Council, who initially declined the offer of the table originally, changed their view just before Christmas and are now expected to take ownership of the table.

Cllr Ian Thomas, Leader of East Devon District Council, had previously said in a statement: “Our council relocation team has been working with professional auctioneers, Sidmouth Town Museum, charities and clearance specialists, to value and dispose of a wide range of items from our old East Devon District Council offices at The Knowle in Sidmouth.

“As part of this process, we offered our staff and elected members the chance to bid for items that may be of sentimental interest or practical use, but are of negligible commercial value.

“The value of items to be disposed were identified based on the view of experienced professionals. They included the large table from the Members area, which attracted little professional interest with one valuer estimate of just £50.

“All proceeds from this sale and those raised from other sales will go to the Chairman’s Civic Fund, to be donated to nominated charities.”

East Devon District Council’s scrutiny committee considered the disposal of the contents of the Knowle at their meeting last Thursday.

Richard Cohen, the Deputy Chief Executive, produced a report that outlined the process of disposal of items from the Knowle prior to handover to PegasusLife for demolition.

He said: “As part of that process and prior to the handover of the old office buildings to the developer, the council needs to clear the buildings. In total there are just over 2,600 separate items in the Knowle.

“The vast majority of these are office furniture: desks, chairs, cabinets etc of varying ages, condition and size. There are also a number of particular items of varying antiquity and value: these involve both furnishings and fixture and fittings. From a perspective of bulk disposal the estimated total weight of all these items is 45 metric tonnes.”

He outlined that Sidmouth Museum and Sidmouth Town Council were both interested in re-home various items, multiple local auction houses were invited in to look over items but that the majority of items were not of interest to them, and that for remaining items an opportunity was offered for council staff and members to bid for items whether for practical or aesthetic reasons.

He said: “These were items that had been attributed little or no sale value by the various professional auctioneers and ranged from standard office furniture items to cupboards, upholstered furnishings, tables, curtains for example. This element of the disposal process involves around seventy separate items and is likely to raise of the order of £2,000 for the Chairman’s chosen charities.”

Mr Cohen added that groups such as Action East Devon, Green Furniture Aid and Hospicare who are all either networked with voluntary groups or can sell furniture via charity outlets were asked whether they had an interest in some of the for the more generic items such desks, chairs and tables, but the response has been largely muted.

Town and parish councils will also be contacted asking them whether they have an interest in any items with the requirement that they transport said items away themselves, he added.

But councillors said that contrary to what Mr Cohen said, a full list of the items for disposal had not been circulated to them.

Scrutiny committee chairman Cllr Roger Giles said: “There has not been a list that we have seen so could someone produce a list that will be circulated very soon.” He also asked wat do town and parish councils know about the process, as the answer he had heard from them is nothing.

Cllr Cathy Gardner added: “Why was the full explanation of the process not circulated to members before we were given the chance to bid for items? The reason there was a furore around the subject as the offer of sale of items internally was offered in isolation and the lack of communication meant there was a lack of understanding of the wider process that this sat.”

Her recommendation, which the scrutiny committee backed unanimously, was that they remind the senior management team of the council to always consider the public perception of actions taken, particularly when it is involves public assets, and the disposal of public assets.

https://www.devonlive.com/news/devon-news/council-management-team-rebuked-over-2545040

“Heart of the South West, our Local Enterprise Partnership, gets its first school report and it’s not good”

Local David Daniel, a former senior government strategist, who has done much work on the East Devon economy, Heart of the South West Local Enterprise Partnership (HotSWLEP) statistics and forecasts and county growth figures (and presented these to EDDC and Devon County Council) has provided this analysis of the current “achievements” of HotSWLEP.

It must be recalled that HotSWLEP is sucking up vast amounts of money that in the past would have gone direct to local authorities and its board members (apart from a few councillors) have vested interests in housing development, the nuclear industry, commercial banking and Hinkley C recruitment.

Here is the report:

“As a result of the 2017 Mary Ney review of Local Enterprise Partnership (LEP) Governance, a newly formed Joint Scrutiny Committee is to scrutinise Heart of the South West’s (HotSW) annual performance review. This will take place on

Thursday, 14 February, in County Hall at 2.15.

There will, however, be no opportunity for public engagement or speaking and this Scrutiny Committee is not politically balanced but appointed by the very councils that agreed HotSW’s strategy in the first place.

Credit where credit’s due, this is progress! Remember, HotSW was appointed by the Government to act as our “devolution body in waiting” in 2011. It didn’t publish minutes of any meetings in the public domain until 2015. Yet it had already agreed a growth deal with the Government on our behalf the year before, 2014.

It has since published wildly ambitious strategy papers culminating with its Productivity Strategy in late 2017 aimed at doubling our local economy first in 18 years, later revised to 20 years, through transformational growth in the “Golden Opportunity” economic sectors of: Aerospace; Marine; Nuclear; Data Analytics and Healthcare. Economic growth comes from increasing the labour force and/or increasing productivity.

Demographically, the population is set to grow 0.8% p.a. but it is an ageing one and the growth of those of employable age will only be a fifth of this at 0.16% p.a. HotSW intends to “limit growth” in employment to 0.8% per annum and concentrate on raising productivity way above the national average. But even this “limited” growth in employment is five times the trend and will need substantial inward migration.

When this strategy was written, productivity in the HotSW area ranked 7th worst in England. An Office of National Statistics (ONS) report last week said: “The lowest labour productivity in 2016 was in Cornwall and Isles of Scilly. Other largely rural LEPs with relatively low labour productivity included Heart of the South West, Greater Lincolnshire, and The Marches”. The ONS now places HotSW lower at 4th worst, 18% below UK average.

We now have the opportunity to lift the lid and peer into how successful HotSW has been in meeting the targets it agreed, by reading the HotSW annual performance review for 2017, commissioned from Ash Futures.

Investment

HotSW has secured a total of some £245M to date from central government funds, though, when assessed on a per head basis, HoSW has actually received one of the lower allocations across the LEP network. These funds are supposed to be matched by funding from other sources.

LEPs have to be business-chaired and business-led and it was intended that LEPs would unlock private investment. However, the bulk of this matched funding is forecast to come from public bodies including 17% from local authorities. Only 23% will come from the private sector. In regard to this the report says: “Our consultations have also highlighted that the strategic plan is not perceived as having had any significant influence over private sector investment plans.”

Only seven of the 56 funded projects are yet complete in spending terms and so the bulk of the benefits are yet to come. Though this needs to be read in the context of a continuous stream of past funding previously distributed through Regional Development Agencies.

Of these projects, 30 are designed to create conditions for growth e.g. transport and digital infrastructure; 17 are designed to capitalise on distinctive assets in expected high growth sectors such as low-carbon and nuclear energy, marine, big data and photonics; and seven on maximising productivity and growth such as opening up employment space.

Several stakeholders feel that rural areas have been ‘overlooked’ by LEP investments and much of this due to this original identification of urban-based transformational opportunities. However, this should not come as a surprise given the composition of the original HotSW board which was dominated by individuals from a construction/development; defence/nuclear or big education background.

Here are some examples of the sort of projects submitted in the bid proposals:

£13 million to provide Hinkley C infrastructure and £55 million of pump priming to provide Hinkley housing;

a Nuclear Training College;

and one of the deals agreed includes £13.7 million loan funding to three developers to accelerate home building at: Frome, Brixham, Exeter and Highbridge. (You may ask why developers need such funding).

Much is made of the “Golden Opportunity” offered by Hinkley C. This is not the first nuclear power station to be built on the site. Hinkley A was constructed between 1957 and 1965 and Hinkley B between 1967 and 1976. So there should be plenty of historical evidence of the short and long-term economic benefits of such developments. Where are they or are they too insignificant to be found? It is no longer obvious that this is a growth industry.

Economic Measures and Growth

Lack of progress in making any significant changes to our economy are best illustrated by two direct quotes from the review:

“…….the review of economic data leads to the overall conclusion that the HoSW economy, at best, continues to track the ‘baseline’ growth scenario. That is, there is no firm evidence that it is achieving either ‘strong’ or ‘transformational’ growth as aspired to in the Strategic Economic Plan.” [Baseline – continuing to fall behind UK average; Strong – keeping pace with UK average; Transformational – faster than UK average]

“The plan outcome measures and objectives in the current economic environment do not currently look achievable, certainly in the short-term. Some of this is outside of the LEP partnership’s control (with more muted conditions nationally). However, the fact that many of the Strategic Plan outcome measures are expressed in relative terms does means that even if significant absolute improvements have been made to the HoSW economy, they may still never meet their outcome measures given that other areas will grow more quickly, notably London and South East. It is our view that some of the outcome targets, particularly those associated with the ‘transformational’ target, now look very aspirational in their nature.”

The only areas on track appear to be in the delivery of broadband coverage and in housing development density (development rates against existing stock).

Conclusion

For an unelected body that made a pitch to Government eight years ago that it could transform the local economy, including, initially, delivering health and transport, this below average performance from unlocking investment to falling productivity surely can only be seen as a failure?

The review catalogues the “critical issues” (excuses) for shortfalls: the economic context has changed; the expected ‘freedom and flexibilities’ have subsequently been rolled-back by Government; parameters [strings] have been tied around what could be funded; HoSW is a relatively new ‘construct’ and does not naturally represent a functional economic, or political, area as found elsewhere in the UK.

But that’s life. Any worthwhile strategic plan needs have been developed to be robust against a set of likely future scenarios. The “critical issues” listed above shouldn’t have come as surprise and the sensitivity of the plan to these sorts of “issues”, some use the term risks, should have been examined and reported. Another essential component, given the extreme uncertainty of how to improve productivity, should have been the development of a set of metrics and a feedback mechanism. So it is heartening to see that the reviewers make this recommendation:

“Currently, there is no ‘feedback loop’ back to the Strategic Investment Panel to develop its understanding of ‘what has worked well, and what not’ with investments made. Whilst we recognise that many projects are still at an early stage of development, we feel this is a missed opportunity. A better understanding of how investments have developed would lead to better long-term decision-making.”

On the basis of this review, is HotSW delivering value for money (our money)?

SOURCES:

Joint Scrutiny Agenda and Ash Futures Review reports pack:
https://democracy.devon.gov.uk/documents/g3570/Public%20reports%20pack%2014th-Feb-2019%2014.15%20Heart%20of%20the%20South%20West%20HotSW%20Local%20Enterprise%20Partnersh.pdf?T=10

Office for National Statistics latest productivity data:
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/articles/regionalandsubregionalproductivityintheuk/february2018#results-for-local-enterprise-partnerships-and-city-regions

HotSW Productivity Strategy:
https://heartofswlep.co.uk/wp-content/uploads/2018/04/HeartoftheSouthWestProductivityStrategy.pdf

HotSW Strategic Economic Plan
https://heartofswlep.co.uk/wp-content/uploads/2016/09/Non-tech-summary-FINAL.pdf