The Government is offering local areas the opportunity to take control of their future economic development through the creation of Local Enterprise Partnerships (LEPs) which are locally-owned partnerships between local authorities and businesses. LEPs are intended to play a central role in determining local economic priorities and undertaking activities to drive economic growth and the creation of local jobs.
They are also intended to be a key vehicle in delivering the Government’s objectives for economic growth and decentralisation, whilst also providing a means for local authorities to work together with business in order to quicken the economic recovery. The Government believes LEPs will be better placed to determine the needs of the local economy along with a greater ability to identify barriers to local economic growth. On 28th October 2010, the Government announced 24 partnerships that were ready to move forward and establish their local enterprise partnership boards.
These are:
- Birmingham and Solihull
- Cheshire and Warrington
- Coast to Capital
- Cornwall and Isles of Scilly
- Coventry and Warwickshire
- Cumbria
- Greater Cambridgeshire and Greater Peterborough
- Greater Manchester
- Hertfordshire
- Kent and Greater Essex and East Sussex
- Leeds City Region
- Leicester and Leicestershire
- Lincolnshire
- Liverpool City Region
- Nottingham, Nottinghamshire, Derby, Derbyshire
- Oxfordshire City Region
- Sheffield City Region
- Solent
- South East Midlands
- Tees Valley.
Separate arrangements will apply in London, where discussions are currently underway with the Major of London on how the Government can decentralise powers, particularly in the context of the abolition of the Government Office for London.
To date, ministers have given the green light to 24 of the 56 bids submitted to the Government to form LEPs. This first wave of bids include LEPs that cover all of England’s large regional cities with the exception of Hull. Ministers have said LEPs, which will take on economic development from the regional development agencies, must capture real economies rather than artificial administrative boundaries.
With the first wave of 24 LEPs this does seem largely to have been the case. Analysis undertaken for LGC of all the LEP bids by Professor Alan Townsend, of the University of Durham, and Dr Lee Pugalis, of the University of Newcastle, shows that of the 24 bids given the green light, all bar two have more than 75 percent of their resident working age population working in the LEP area - a key Government bench mark for defining an functional economic area. Those below the benchmark are Hertfordshire, which is ranked a lowly 49th of the 56 bids, with a travel-to-work score of just 70 percent and the Cheshire & Warrington proposal, which of the original 56 bids is ranked 47th with a travel-to-work score of 74 percent.
FUNDING
A key concern for the FMB is the need for basic funding for LEPs and the need to ensure that the LEPs adhere to the Government’s vision of being business led, with genuine business involvement, ensuring there is equal representation from the local authority and a broad base of businesses. Although LEPs will get no central government funding, they will be able to bid for a share of a £1.4 billion regional growth fund (RGF) spread over three years. RDAs had an annual budget of £1.4 billion. The House of Commons Department for Business, Innovation and Skills (BIS) Select Committee which has been analysing the Government’s policy of scrapping Regional Development Agencies (RDAs) has said it will report on how LEPs are performing within 18 months.
