The move comes after a small number of local enterprise partnerships were found to be hiring public affairs consultancies to lobby the government and Parliament on their behalf.
Using taxpayers’ funds to lobby government wastes public money and undermines transparency. The government believes if the practice continues other partnerships may feel pressured to follow suit and divert much-needed funds away from enterprise and regeneration.
The Department for Communities and Local Government is also cracking down on taxpayer funded lobby by other organisations. The Institute of Economic Affairs has undertaken extensive research on ‘sock puppets’ - those pressure groups and charities receiving public money that then use it to lobby government and Parliament for more money and regulation.
The department is setting Whitehall an example by taking the additional step of amending its grant agreements to include a new anti-lobbying, anti-sock puppet clause. Simple and effective, it will bring about an end to this practice and make sure that taxpayers’ money is being spent on those things that make a real difference to the lives of hard-working families.
It ensures that payments do not support activity that could influence or attempt to influence Parliament, government or political parties. It applies to any activity that could influence the awarding or renewal of contracts and grants or legislative or regulatory action.
Other departments and public-sector bodies are now being urged to follow suit.
To avoid public money being squandered local enterprise partnerships should be guided by the same principles that apply to councils and quangos – they should not be hiring lobbyists to influence the award of contracts and grants or influence legislation.
To hammer this point home, the government will shortly be writing to all partnerships to remind them of their responsibilities and make it clear that it will not stand for any so-called ‘lobbying on the rates’. The message is clear - if you have lobbyists on the books then their contracts should be terminated immediately.
Communities Secretary Eric Pickles said:
Under the last administration, quangos and town halls threw away millions of pounds taxpayers’ money on government lobbying government, even spending money on lobbying against the Opposition. There’s nothing wrong with private organisations using their own money to hire commercial firms for advice, provided it’s done in an open and transparent manner. But it’s a wasteful, corrosive and zero sum game for the public sector to be using lobbyists, and just leads to higher taxes and more red tape. The public sector never lobbies for lower taxes and less state spending.
Local enterprise partnerships are new on the scene, and are working hard to promote jobs and growth. But we are clamping down on the unhealthy practice of them using lobbyists. They should pick up the phone instead.
My department will be the first in Whitehall to introduce a no-lobbying clause in all grant agreements. If external groups are lucky enough to receive grants or win contracts with taxpayers’ money, it shouldn’t be spent on lobbying for more taxpayers’ money or more red tape. I hope we will can roll this out across central government, standing up for value for money and reining in the bureaucratic state.
Greg Clark, Minister for Universities, Science and Cities, said:
Local enterprise partnerships should follow the principles that apply to government and local authorities, which prevents any expenditure incurred in retaining the services of lobbyists to influence public officials, Members of Parliament, political parties or the government. If local enterprise partnerships have any specific concerns or points they would like to put across to government then they can easily talk directly to myself, other ministers or officials. This will both be more effective, and ensure appropriate use of public funds.
The simple and short but effective anti-sock puppet clause says:
The following costs are not eligible expenditure: payments that support activity intended to influence or attempt to influence Parliament, government or political parties, or attempting to influence the awarding or renewal of contracts and grants, or attempting to influence legislative or regulatory action.
Read the Secretary of State’s full written statement to Parliament.