The Department for Levelling Up, Housing and Communities (DLUHC) has paused £1.3 million in funding for Cambridgeshire & Peterborough Combined Authority in light of ongoing governance problems.
The DLUHC said the funding will be withheld until there are “appropriate plans in place to reach a resolution”.
The move comes after the combined authority's external auditors, Erst & Young, said that "insufficient capacity, capability and an inappropriate culture" at the authority is threatening its ability to discharge its statutory services.
Last month the combined authority approached the DLUHC to ask for help in resolving the auditor's concerns.
The DLUHC said that it is working to support the authority on its governance arrangements but has taken the precautionary measure of pausing the payment of 2022/23 Mayoral Capacity Funding and 2022/23 Local Enterprise Partnership (LEP) Core Funding, which amounts to £1.375m.
The combined authority confirmed that it had received a letter from the DLUHC detailing the move, adding that the DLUHC intends to withhold the funding until there are plans in place to resolve the issues outlined by the external auditor.
The auditor raised concerns over the following issues:
- Investigations into key individuals in the Mayor's office following a whistleblower notification;
- An increased number of employment-related claims against the authority;
- Current vacancies in the authority's senior management team, particularly at Chief Executive level, and the prospect that this could increase further from July 2022;
- Weaknesses the auditor observed in how the extraordinary meeting of the Authority Board makes informed decisions; and
- The nature of the whistleblower allegations and initial findings of independent investigation reports raises significant questions on the culture, behaviour and integrity of key individuals in the Mayor's office.
A spokesperson for Cambridgeshire and Peterborough said: "The paused £1.375m DLUHC funding represents 1% of total expected 'in-year' funding. It does not impact on the Combined Authority's financial stability in this financial year, and committed funding for projects and existing agreed delivery programmes are unaffected.
It added that the combined authority is already in "positive dialogue" with the DLUCH and will continue to work with all of its partners and new interim CEO, "focusing our efforts on delivery for all the communities of Cambridgeshire and Peterborough".