The Greater Cambridge Greater Peterborough Enterprise Partnership has been accused of using taxpayer-funded incentives to encourage a firm to move to a site which its chairman's company is building.
Local Enterprise Partnerships (LEPs), which get millions of pounds of taxpayers' money a year, were set up by the government in 2010 to encourage economic growth in the regions.
Their boards are made up of business and council leaders, but they have been accused of lacking in accountability as they do not have to follow the same transparency rules as councils and meet in private.
In Cambridgeshire, the LEP has created an 'enterprise zone' at the former RAF base at Alconbury Weald near Huntingdonshire.
The zone has been developed using more than £10m of public money, secured by the LEP, as well as private money. Businesses that move to the enterprise zone get five years of free business rates.
But North East Cambridgeshire MP Steve Barclay has said it meant taxpayer's money, in the form of reduced business rates, was being used to encourage firms to move to Alconbury Weald at the expense of other areas such as Fenland.
And he raised concerns that a building firm which the chairman of the LEP is also the chair of is the principal contractor for one of the projects at the Alconbury Weald Enterprise Campus.
A King's Lynn-based firm called Chalcroft Construction is building a new site at Alconbury for a juice and flower company called MMUK which is based in Chatteris.
The chairman of the LEP, Mark Reeve, is also chairman of Chalcroft Holdings. He is the biggest shareholder in Chalcroft Holdings, owning 37.5pc of it.
Speaking at a public meeting in Wisbech on Friday, Mr Barclay said: 'As a matter of policy, the LEP has targeted businesses within a 30 mile radius of the Enterprise Zones to encourage them to move there.
'As such it is using taxpayer money (five years free of paying business rates) to encourage businesses to leave Fenland and move to a more prosperous part of the county, Huntingdon. This is not what the policy intended.
'In Chatteris, a major business MMUK Flowers has been encouraged by the LEP to leave Fenland and move to Alconbury.
'On 5 September 2016 MMUK announced that Chalcroft were designing their new HQ with the principle contractor being Chalcroft.
'It is unclear whether the Chair of the LEP regarded this as a conflict of interest, given his links to this building firm.
'No conflict of interests appear to have been declared by any of the LEP board regarding funding decisions on Alconbury Weald, nor have I seen any corporate hospitality declarations should these arise.
'It has been suggested to me that conflicts of interest concerns were raised with the LEP board.'
A spokesperson for the LEP said Chalcroft Construction had not received any money from it to construct buildings at Alconbury Weald and the LEP had not given any funding to MMUK to move to the enterprise zone, meaning their chairman Mr Reeve did not need to declare an interest to the board in the project.
'This was a separate commercial arrangement made between two private companies,' the spokesperson said.
'All negotiations and packages for companies moving to Alconbury Weald Enterprise Campus are made by the owners and developers, Urban&Civic, and not by the LEP,' they added. 'These are private, corporate arrangements made between the company and Urban&Civic.'
The Cambridge and Peterborough LEP does not have a register of interest for its board members on its website, but a spokesman said it was currently reviewing its register of interests and would publish it on its website 'soon'.
They added that declarations of interest were made at board meetings, when relevant, and added to the meeting's minutes.
The new MMUK base is the first large new building to start at Alconbury Enterprise Campus.
A spokesman for MMUK said the company would still be using all of its site in Chatteris, but some jobs within flower and grapes would move across to Alconbury.
The Conservative leader of Cambridgeshire County Council and LEP board member said he had raised concerns about MMUK's move to Alconbury Weald at a LEP board meeting.
Councillor Steve Count wrote on his blog: 'I raised concerns about why a local business was expanding in this way. Because of the rate free nature of enterprise zones we tried to ensure the zone did not simply lure local businesses away from their base.'
He also wrote: 'On a separate issue I will once again take up with the Chief Executive and the chairman (of the LEP) the need for a published register of interests.'
The LEP spokesperson added: 'The LEP refutes any suggestion that it has not given Fenland, or for that matter any other area within the LEP, due and correct consideration.'
A spokesperson for Urban&Civic, which is developing Alconbury Weald, said: 'Government legislation for enterprise zones is consistent across the country and enables businesses moving into any enterprise zone up to £55,000 business rates discount for up to five years, as well as streamlined planning permission and superfast broadband.
'The level of benefits was specifically designed to support businesses to grow in their period after relocation but not encourage them to move for the sake of the benefit.'
Chalcroft has been contacted for comment.
•Do you have a story which needs investigating? Email tom.bristow@archant.co.uk
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