Tuesday, 15 March 2011

New North West LEPs Take Shape

Local enterprise partnerships ("LEP") are non-statutory bodies recognized by the Department for Business Innovation and Skills and the Department for Communities and Local Government that have been set up by representatives of local authorities and local business. According to the Department for Communities’ website, LEPs “will play a central role in determining local economic priorities and undertaking activities to drive economic growth and the creation of local jobs.” The website adds that they are also a key vehicle in delivering Government 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 initiative for LEPs was a joint letter dated 29 June 2010 from Dr. Vince Cable MP, Secretary of State for Business, Innovation and Skills, and Mr. Eric Pickles MP, Secretary of State for the Communities, to local authority leaders and business leaders. The letter opened with the following invitation:

“We are writing to you to invite you to work with the Government to help strengthen local economies. The Coalition Government is committed to reforming our system of sub-national economic development by enabling councils and business to replace the existing Regional Development Agencies. The purpose of this letter is to invite local groups of councils and business leaders to come together to consider how you wish to form local enterprise partnerships.”

The letter expressed the concern that “some local and regional boundaries do not reflect functional economic areas” and the “wish to enable partnerships to better reflect the natural economic geography of the areas they serve and hence to cover real functional economic and travel to work areas.”

So far, proposals have been accepted for the following LEP sin North West England:

The white paper, “Local growth: realising every place’s potential” (Cm 7961), published on 28 Oct 2010 expects LEPs “to provide the strategic leadership in their areas to set out local economic priorities”. It envisioned that they might wish to take on the following roles:

  • “working with Government to set out key investment priorities, including transport infrastructure and supporting or coordinating project delivery;
  • coordinating proposals or bidding directly for the Regional Growth Fund; • supporting high growth businesses, for example through involvement in bringing together and supporting consortia to run new growth hubs;
  • making representation on the development of national planning policy and ensuring business is involved in the development and consideration of strategic planning applications;
  • lead changes in how businesses are regulated locally;
  • strategic housing delivery, including pooling and aligning funding streams to support this;
  • working with local employers, Jobcentre Plus and learning providers to help local workless people into jobs;
  • coordinating approaches to leveraging funding from the private sector;
  • exploring opportunities for developing financial and non-financial incentives on renewable energy projects and Green Deal; and
  • becoming involved in delivery of other national priorities such as digital infrastructure.”

Up to now those roles have been performed in North West England by the North West Development Agency (“NWDA”). Clause 1 of the Public Bodies Bill, which was introduced into the House of Lords on 28 Oct 2010, will enable the government to abolish the NWDA by a statutory instrument. The proposal to abolish the NWDA and the other English regional development agencies has been controversial to say the least. I, for one, was very sceptical because the NWDA working through Business Link North West had helped many of my clients over the years and the proposals for the LEPS seemed nebulous. Having read “Understanding Local Growth” (BIS No. 7) Oct 2010 I am inclining the other way because relative productivity per person in the North West actually fell during the period that the NWDA has been in existence (see Table 1: Regional productivity levels and average annual growth rate, English NUTS1 areas, 1993–2008” on page 10). The English regions are too large and too diverse to plan from Warrington. What is good for Wilmslow is not necessarily good for Whitehaven and vice versa. The new bodies should at least offer flexibility and local knowledge to economic planning.