A group set up to kick start economic growth in the region has accused an MP, who reported them to a government spending watchdog, of making 'wholly inaccurate and defamatory' suggestions about it.
The Greater Cambridge Greater Peterborough Local Enterprise Partnership (GCGP) has come under increasing scrutiny since January after North East Cambridgeshire MP Steve Barclay raised concerns about its transparency and spending.
The MP sent a 25-page report outlining his concerns to the National Audit Office (NAO) at the start of March, which the government spending watchdog is now investigating.
It contains allegations about the GCGP, the Local Enterprise Partnership (LEP) for Norfolk and Suffolk, called New Anglia, and the Greater Cambridge City Deal.
Mr Barclay's report:
•Raises concerns that the relationship between prominent local developers, the GCGP and City Deal, is opaque and open to abuse given the overlapping private business interests of board members and developers
•Claims the GCGP has failed to answer questions about the relationship of key GCGP board members with a small number of property developers who he claims have enjoyed significant increases in profits whilst benefiting from large grants or loans from the GCGP or bodies working closely with the GCGP.
•Raises particular concerns about the relationships and declarations of interest provided by Mark Reeve, chairman of the GCGP, who is also chairman of the privately owned Chalcroft Holdings Ltd of King's Lynn. Chalcroft is currently building a £20m new factory at Alconbury Weald near Huntingdon, on an enterprise zone supported by the LEP.
In its response to the NAO, the GCGP said it was 'wholly inaccurate and defamatory' to suggest that any of their board members had been rewarded in their private business interests by developers in return for preferential treatment by the LEP.
It also said there were 'significant inaccuracies' in Mr Barclay's report to the NAO.
A GCGP spokesperson said: 'The LEP is compliant with the Government's Assurance Framework. We would be happy to answer any further questions the National Audit Office or Government may have regarding the matters raised.'
Mr Barclay also raises concerns about a £500,000 loan by the New Anglia LEP in 2013 and 2014 to a firm called Pigeon to kick start development at the Fiveways roundabout on the A11 near Mildenhall. The £3 million contract to develop the site was then awarded to Chalcroft by Pigeon.
Both the LEPs said decisions to award contracts to Chalcroft at Alconbury Weald and the Fiveways was nothing to do with them and therefore did not involve any conflicts of interest.
But Mr Barclay also raised concerns to the NAO about the role of Suffolk County councillor James Waters, a board member of GCGP and leader of Forest Heath District council.
Mr Barclay said councillor Waters had a business interest with Pigeon as the Waters family had submitted a joint planning application with Pigeon in 2014 to build 138 homes in the village of West Row, in councillor Waters' ward on land owned by his family.
New Anglia LEP responded to Mr Barclay's concerns by stating that councillor Waters played no part in helping Pigeon secure the £500,000 loan from New Anglia, which has now been fully repaid.
Forest Heath Council also stressed Cllr Waters had played no role in getting the loan.
The NAO – which scrutinises public spending on behalf of Parliament - has extensive powers to examine documents and to interview staff if they feel an inquiry is warranted.
In his response to Mr Barclay's report, NAO comptroller Sir Amyas Morse said he took the issues raised on governance, transparency, accountability and ensuring value for money 'very seriously'.
'Once we have considered the points you raise, I will decide what course of action to take and will then write to you again explaining what I intend to do,' he said.
A government spokesman said: 'We want to see greater transparency about how taxpayers' money is spent – that's why we've strengthened the rules Local Enterprise Partnerships must follow and won't hesitate to act if they fail to comply with these new tougher standards.'
Chalcroft and Pigeon did not wish to comment.
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