LEPs - a new acronym is born

I've been in Birmingham and Hull recently, discussing their economic future and the role of local enterprise partnerships. And I've had meetings with BIS officials and Treasury minister Justine Greening. A clearer picture is now starting to emerge on LEPs - and the Regional Growth Fund...

First, there's a lot of interest in LEPs - their powers, funding, and especially what areas they will cover. Birmingham is actively considering an area that includes the Black Country and Solihull. Hull is working towards an alliance with the East Riding, along the north bank of the Humber.

Discussions are live in every other part of England - including whether Yorkshire & Humber should split into 4, the North West into 6, and the South East into more. Some places, like Barnsley and York, are working out whether they can be in more than one LEP. (We think they can)

Vince Cable's department, meanwhile, is hoping for as few LEPs as possible. Understandable, really. Eric Pickles loves localism, but BIS doesn't want to deal with loads of tiny little LEPs - they'd rather see a moderate number of strategic ones, based on genuine travel-to-work areas. (We agree)

Leadership of LEPs is a big issue. We think they should be led by council leaders, with genuine business involvement. "Business-led" sounds great, but we don't want LEPs to get into the same difficulty as RDAs - which were business-led, but took on so many functions that their accountability was called into question.

There's a big risk that LEPs get bogged down in governance stuff - who chairs them, who sits on the board, all that kind of thing. Jerry Blackett (CEO, Birmingham Chamber of Commerce) got it right at our event last week, when he urged us to focus on the opportunities created by LEPs - to deliver existing programmes better - training programmes that employers want, buses that connect people to jobs, and housing that people need.

The deadline for LEP proposals is 6 September. It's clear that some LEP areas are more oven-ready than others. Greater Manchester will no doubt be front of the queue, asking (and getting) more than most other areas. That suggests LEPs will proceed at different speeds - which is fine with us.

I understand that consultation on the Regional Growth Fund - £1bn over two years, starting April 2011 - will begin quite soon. We'll be publishing advice for cities on that soon.

Comments

[Gary Speed]

Hmm RDAs didn't get loads of excessive responsibilities due to their business led boards, but rather due to Whitehall instructing them to do so.

Anyhow, most of the rest of the world have local and city development agencies with business led boards. They do so for a region - to depoliticise decision making about the economy, and to make pragmatic long term decisions that aren't subject to electoral cycles. And to get business buy-in and to tie them into their economy in the long term. Ta-daa... there you have it. Can the rest of the world have it so wrong?

[Dermot Finch]

Hello Gary -

Think you mean "they do so for a reason" (not "region"), but anyway...

We actively encourage business involvement in LEPs. But at the same time, LEPs must be democratically accountable - especially under this Govt.

Ultimately LEPs should be accountable to city leaders. This came up at our event in Birmingham on 9 July with Jerry Blackett.

Elected leaders should be the lead partner in LEPs, because democratic accountability is essential for LEPs to take on powers like planning and transport, and to make decisions on major investments.

We can't repeat the mistake of RDAs, where unaccountable bodies were given increasing control over things like planning that require democratic mandates.

This Coalition Govt just won't tolerate any bodies responsible for planning that are not directly accountable, so we need to respect their mandate and respond accordingly.

Businesses still need to be actively involved in economic development, and there is no doubt that currently many local authorities lack the skills they need to effectively engage with business. This needs to change.

The private sector is a fundamental part of LEPs, but business should be either a minority member (less than 50%) of a LEP board or on an advisory leadership council, like the situation in Greater Manchester. Our preference is for the latter.

"Business-led" sounds good, but strong LEPs will only result from accountable institutions, and that means a locally-elected leader.

[Gary Speed]

Well in that case what is the difference between a LEP and a local authority?

I just disagree that LEPs should have powers like planning and transport. This should be the responsibility of the local authority. LEPs would be better off being a business led partnership that gives strategic advice to bodies such as local authorities, or hold them to account in some way.

Why are you suggesting LEPs take functions that local authorities already have the mandate and potential powers and capacity for? it seems pointless.

The mistake of RDAs was that they are creatures of Whitehall, and not of local or even regional interests.

LEPs will be partnerships, and it will be very difficult to create statutory bodies that can take on these responsibilities. Following your route of thinking, why not just create metropolitan authorities/government?

Even cities with metropolitan govts, such as Barcelona, have economic development agencies for things like promoting inward investment and property development. And these agencies have private sector led boards. The Bay Area in California has an economic partnership which is a strategic influencer, and is business led.