Local Enterprise Partnerships and future growth

The Coalition Government's intention is to devolve greater powers and funding to the LEPs and City Regions, which are, in effect, the sub-regional level in England, through negotiating a local Growth Deal with every LEP, with the allocation of the Single Local Growth Fund reflecting the quality of their ideas and local needs. In the 2013 budget statement, the creation of a single competitive fund for local enterprise was announced, based on Lord Heseltine's ideas, in order to decentralise public spending and encourage competition, efficiency and regional growth outside London. LEPs were invited to submit bids for the funds, which, a Ministry source said, would allow LEPs 'to win more funding for a good bid for new housing or roads or skills as an incentive' (Armstrong, 2013). It was initially welcomed by the LEPs themselves, although the size of the pot was less than had been hoped for. European Union Structural and Investment Funds were also included, although the latter was not new money, in order that the Treasury could claim that it could be worth 'tens of billions' of pounds over several years. However, very quickly the 'single' was dropped from the title 'Local Growth Fund', and the fund became divided up into streams related to various central Ministries. For example, local transport funding was to be the responsibility of the Ministry of Transport through Local Transport Boards, and the European Social Fund allocation for skills training would be through the Skills Funding Agency.

Whether LEPs will be fit to carry out such tasks remains to be seen. LEPs have not been in existence long, and while some have been innovative, they are very diverse. Newcastle University's Centre for Urban and Regional Development Studies (CURDS)'s survey of the 39 existing LEPs raised several issues. LEPs were reported to be concerned about their relationships with both national and local government. They continue to receive different treatment by different central government departments, so that in some cases they are allowed significant discretion over national powers and resources but in others they are merely a
convenient local field administration for centrally driven initiatives (CURDS, 2013). CURDS also found inconsistencies in how they are viewed by local authorities. Some LEPs are seen as owning local economic agendas and able to attempt a radical transformation of their local economies, while others are seen as purely advisory, with the decisions made by the democratically accountable local authorities (Marlow, 2013).

While central government talk is of empowering and permissive decentralisation, it is unclear what this could mean in practice. Our own findings in Chapter 4 raise issues about adequacy of governance, quality of leadership and internal co-operation both between the different constituent local authorities and between local government and business. If LEPs are to be key drivers of economic growth, they must learn to collaborate with their local authorities to find local solutions. Where this happens, it will be difficult for the Central Government to resist genuine devolution. If there is to be a coherent sub-national approach, LEPs will also need to collaborate with each other to plan beyond the exclusively local. However, the CURDS findings suggests that LEPs have not yet given much thought to collective capacity building and are still finding their feet. Furthermore, the government requirement for competitive bidding for funding between LEPs is likely to make co-operation far more difficult, placing even greater demands on effective local leadership. Whether LEPs are up to the task or whether central government ministries will allow them to become effective remains to be seen.

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