Local Enterprise Partnerships, economic development, City Deals and localism

The Coalition Government's stated intention was that economic development and enterprise would be driven from the local level. To this end they have encouraged the creation of LEPs whose memberships were to be dominated by business leaders, who have a majority of members and the chair but are supported administratively by local authorities. As we discussed in Chapter 4, the original government intention had been that these would be created bottom-up, voluntarily, according to local needs. However, when it became clear that significant areas of the country were not interested in developing these bodies (Pugalis and Shutt, 20112) considerable pressure was applied from the Whitehall department to do so. As a result, the size and scope of the LEPs varies considerably in accordance with the Localism agenda.

Although LEPs now have a role in local economic development, as we saw in the last chapter, City Regions are to be a major focus for the new government in
driving economic development through 'City Deals'. This is a potential source of conflict, as some LEPs in areas without major cities wanted similar powers to City Regions. In rural Cornwall, for example, there were Local Authority plans for coordination and improvement of local road and rail transport, locally funded Further Education bursaries and Higher Education scholarships, superfast broadband of a standard at least comparable to if not exceeding the government's targets and some commissioning of Health Services (Cornwall Council website). Cornwall is ambitious, but it has had the advantage of ERDF funding. Whether the proposed Plymouth City Deal will satisfy Cornwall and the Scilly Isles remains to be seen. Similar arguments were successfully taken up by the LGA, and LEPs now have the possibility of accessing the Local Growth Fund.

The lack of a national economic strategy in the first two and a half years of the Coalition Government, and the abolition of regional strategic plans has been acknowledged by the government as inevitably leading to substantial local variations in the nature and levels of economic growth achievable in different areas. If economic development is to operate at a level no higher than the subregion then there is a danger that there will be no mechanisms for balancing growth rates between the richest and poorest areas of the country. This sits ill with the Prime Minister's slogan that 'we are all in it together'. Ironically, it was precisely what the Coalition Government criticised the RDAs for not doing in the lead-up to their abolition (PricewaterhouseCoopers, 2009).

In 2013, moves began to appear to address issues of regional growth and LEP funding. The recommendations of Lord Heseltine's report 'No Stone Unturned (Heseltine, 2012) were mostly accepted by the time of the 2013 budget, which also contained the proposal for a regional growth fund to be competitively bid for by LEPs. However, as the LGA claims, the amount was £2 billion a year and not the £70 billion recommended by Lord Heseltine, nor was it taken from existing Whitehall budgets, as Heseltine recommended. Indeed, 'the majority of the fund is simply a reallocation of existing council funding with less freedom over how it's spent' (Cockell, 2013). However, local councils did welcome greater influence over European Union Structural Funds (Cockell, 2013).

Clarity of implementation

The English system of local government is complex (Henig, 2006). In practice, there are three formal levels. At the top there are Unitary authorities, which might be cities or counties. Where no Unitary authority exists as well as County Councils there is a lower level of government called District Councils. Each has different devolved powers, the Districts' main responsibility being planning. Beneath these are Parish or Town Councils, which currently have very limited powers and many of which have not held contested elections, often co-opting members in the absence of willing candidates. According to the DCLG website, there are more than 10,000 parish councils in England. Much analysis of local government pays relatively little attention to the subsidiary levels, but the Coalition Government has
been keen to increase Parish Council powers (Open Public Services Act, 2011). 'The importance of the Parish Council sector in delivering the Localism Agenda of the new coalition government cannot be understated … [but] … if the new government's localism agenda is to gain any credibility in our sector, surely we need to see legislation to place a statutory obligation on principal authorities to transfer funding streams along with responsibility for service provisions at local levels to such town and parish councils as aspire to deliver them' (Buchanan, 2010). So, finance is again the key. However, it was not until 2013 that the DCLG collected council tax data for separate parishes, and it is now complaining that the average band D precept for parish councils will rise by 5.1 per cent between 2012–2013 and 2013–2014 (Government website, Parish Precepts 2013–2014) at a time when higher authorities are capped and the consumer price index inflation rate is only 2.7 per cent, so Ministers are now considering 'capping parish council charges in the same way as council tax bills' (Hope, 2013) to 3 per cent maximum.