Local Area Agreements, Local Strategic Partnerships and Multi-Area Agreements
Local Area Agreements (LAAs), Local Strategic Partnerships (LSPs) and MultiArea Agreements (MAAs) were some of the most successful innovations of the previous Labour Government, but they did not fit the new regime. Some of the LAAs were due to expire in March 2011, and the Coalition Government made it clear that it would not offer further rounds. What was more, councils were told that it was up to them whether or not they retained the targets that had been set. LSPs were no longer officially recognised and were seen to be irrelevant once LEPs were announced. MAAs also ceased to have official recognition though in some cases their aims were subsumed under the new Local Enterprise Partnerships.
The Creation of the Local Enterprise Partnerships
The rise of the Local Enterprise Partnerships
RDAs were abolished and replaced with LEPs operating over much smaller geographical areas. The new bodies would have an even stronger emphasis upon business involvement than the previous Strategic Leaders Boards. In some respects the LEP solution was not very different from that proposed by the New Labour Government following their Sub-National Review. Strategic Leaders Boards were to have been sub-regional consortia of councils and businesses that would focus on driving economic growth within their geographical areas. However, while the membership of Labour's Strategic Leaders Boards included business representatives they were to be dominated by elected members drawn from the local councils, LEPs were to have a business person as chair and a preponderance of business members. As one of our interviewees pointed out, the structure was not too dissimilar to an RDA Board. In practice, though, some of our interviewees claimed it was difficult to identify suitable business partners, especially initially, and most of the work of applying for LEP status had to be undertaken by the Local Authorities. As someone else pointed out '[many RDA] Business Board members said no because they can't see them (the LEPS) having the clout or everything else that they need to have' (Regional Development Agency Deputy Director). In some
cases, this led to LEPs involving many business people with little or no experience of economic development.
The question of resources was crucial, yet, initially, the only external LEP funding was to be a nationally funded Regional Growth Fund amounting to only
£1.4 billion spread over three years and intended to focus upon those areas which were particularly reliant upon public sector employment. This meant that it would not be available to all LEPs. Furthermore, under its 'Big Society' concept, the government allowed social enterprises to bid for the same Fund. The Growth White Paper made it plain that there would be no 'core funding' for LEPs (Department for Business, Innovation and Skills, 2010). While the original assumption was that local authorities would provide the staffing for LEPS, 'the reality was that their budgets had been massively reduced in the first year' (Regional Development Agency Deputy Director). Given that many local authority duties are statutory, some local authorities had little enthusiasm for funding additional quangos. Furthermore, the physical assets of the RDAs, which in May 2010 amounted to some £400 million, mainly in land and property, were not to be passed on to the LEPs but were to be sold and the funding retained by the Treasury. This led to 'fury' from local authorities when sites began to be put up for sale on the open market, and in some cases local authorities found themselves in the position of 'scrambling to raise seven-figure sums to buy back Regional Development Agency assets so that the proceeds can be passed back to Whitehall' (Steward, 2011). The Regional Growth Fund was then extended to 2015–2016 after a National Audit Office Report of 2012 reported that up to 41,000 jobs had been created or safeguarded in areas reliant on the public sector.
At the end of June 2010, the DCLG and the Department for Business, Innovation and Skills (BIS) invited local authorities and business groups to consider proposals for LEPs in their local areas. Anxieties about being left out and thus losing any potential advantages led to a plethora of applications from local authorities. In September 2010, Minister Pickles announced 56 applications (Pickles 2012b). 'These 56 local enterprise partnership proposals are just the beginning of a new radical way of delivering prosperity and rebalancing the economy. The secret to the success of local enterprise partnerships will be working on the basis of local economic geography. Gone are the artificial political regions of RDAs; this will better serve the needs of local business. The bureaucracy of Regional Development Agencies gave local authorities little reason to engage creatively with economic issues. Local Enterprise Partnerships are a way of tying council and business interests together and creating the conditions for business to thrive'. In the end, the Ministry approved 24 of the initial bids, which were very unevenly geographically spread across the country though LEPs continued to be approved and gradually filled all of the 'white spaces' on the map (Pugalis and Shutt, 2012). In 2013 the LEP network (2013) identified 39 LEPs in England.
The size and scope of the LEPs varied considerably. Some, like Hertfordshire, cover a single county authority (upper tier local government), some are loose alliances spanning local authority boundaries and some, mostly deriving from
earlier co-operations through MAAs, are quite tightly organised. A small number overlap one another. They can include a varying number of local authorities, from 32 in the South East Region to two in Cornwall.
Despite the emphasis on business participation, business reactions were initially at best mixed. Some Chamber of Commerce CEOs were enthusiastic: 'The LEP will liberate economic development in this area' (Traynor, 2010). However, immediate cuts in the RDA's budgets led to some immediate business closures. For example, the Urban Regeneration unit in Southend immediately announced that it would have to close by 31 December (reported in New Start, 2010). While it can be argued that the performance of RDAs had been mixed, as we saw in Chapter 2, many businesses and business organisations had an effective relationship with their RDA as well as a distrust of Whitehall. As one chair of an East of England business consortium was quoted as saying, 'there are amazing businesses here, and yet we get ignored by government. As we all know, any money there is to spend in these harsh times, is heading north' (Sharratt, 2010). This concern was exacerbated by the DCLG's focus on projects and initiatives with an impact on jobs growth in the private sector. Sharratt's particular worry was the danger of 'fragmentation' with groups, none of which were sufficiently economically significant, bidding against one another so that there was 'the real possibility that the East of England will end up with not a single LEP, and getting nothing at all in the way of investment' (Sharratt, 2010). In fact, there was great disparity in the number of bids coming from different regions. For example, while there were only four bids for LEPs from the East Midlands, there were 20 bids from the greater South East. Pugalis and Shut (2012) reported a similarly unenthusiastic business reaction.
Reactions by many politicians in the regions were also critical. The Leader of Nottingham City Council was quoted as saying: 'The government has decided the East Midlands Development Agency is now no longer going to continue and I have to say that's a shame … The idea that it will be replaced by half a dozen LEPs across the region with administrative costs, chief executives, officers, accommodation … it is a bit nonsensical' (quoted in This is Nottingham, 2010). This appears not to have been simple party politics, because local Conservative politicians also expressed concerns. The Leader of Leicestershire County Council expressed fears that each Local Authority might be left 'to fend for themselves against much larger partnerships' (quoted in This is Leicestershire, 2010). Leaders of District and Borough Counties were also concerned that they might lose out to Unitary bodies (Mallett, 2010). Ministers' intentions were that partnerships should comprise at least two upper tier authorities and should cover functional economic areas. Andrew Stunell, a Junior Minister, stressed the importance of natural economic geographies rather than County Council administrative boundaries in forming LEPs (Hayman, 2010). However, in practice, the 'natural economic geographies' informing the bids were somewhat confused, with some District Councils distancing themselves from counties and Unitary Council based bids. Other early attempts to develop groupings which were very different from the boundaries of the old regions tended to fall by the wayside, so in practice
there were close similarities between LEP boundaries and County Council administrative areas (Townsend, 2012).
Some national politicians raised possible political dangers arising from the changes. David Blunkett for Labour argued that 'the denial of regional identity pulls the centrifugal force of England into London and alienates those who are hardest hit by the cuts … [while] … London retains a development agency and demands more resources' (Blunkett, 2010). He saw this as the balkanisation of England. This seems to be mirrored by an elder Conservative statesman , Lord Heseltine, who argued that 'London did not make the UK. London has acquired too much power. Cities like Manchester and Birmingham made the UK. We need to mobilise the skills of provincial England' (Heseltine, 2012a). As we will see, he was later able to make a significant contribution. At the same time, devolution of powers to Scotland and Wales were being exploited by extreme right wing organisations such as the English Defence League (EDL) to develop a new form of English colonialism. 'It is a formula for disaster, a tearing of the social fabric and either a return to the riots of 1981, or the growth of right wing English nationalism' (Blunkett, 2010).
Our interviewees had mixed views about LEPs. Where strong local partnerships based on trust already existed, the expectation was that the LEP would thrive. Others, however, were more doubtful, and without significant core funding, some of the LEPs were expected to fail. One Chamber of Commerce CEO worried about the calibre of the business membership and their inability to comprehend his local business community needs. His argument was that the predominant aim of the government, and thus of the LEP, was economic growth, with LEP membership dominated by representatives of large national or global companies, in contrast to his local business community, which was dominated by small businesses whose CEOs valued local control over 'excessive' growth. This might be seen as an example of Moore's (1995) Moral Value dilemma. Members of the voluntary sector were also concerned that they might be cut out of the loop. While some LEPs set up 3rd Sector panels, others did not.
At the same time, other interviewees also expressed concern that the overly local perspective of some LEPS was in danger of militating against an appropriate global perspective. This is most clearly illustrated with reference to the location of Enterprise Zones. LEPs were encouraged to bid for Enterprise Zones which would offer certain tax incentives to start-up businesses. Once again there was some confusion about government policy intentions. Whilst the Prime Minister's rhetoric emphasised Enterprise Zones as a means of assisting in local regeneration, the relevant Minister argued that their emphasis was rather upon economic growth (Prisk, 2011), and this latter view is supported by the locations of successful Enterprise Zone bids. The lack of any overall national economic strategy meant that in some cases LEPs which are geographically quite close to one another planned to specialise in the same business sectors. Local politicians and Local Authority CEOs worried that, rather than driving the local economy,
they could find themselves closely competing with each other for business in the