Yesterday's announcement that the new Growing Places Fund will be allocated directly to Local Enterprise Partnerships (LEPs) completes another section of the LEP funding jigsaw. Originally announced by Danny Alexander at the Lib Dem Conference in September, the Growing Places Fund will distribute £500m. The key objective for Growing Places is explained as being “to achieve early economic growth, and maximise jobs and housing”. It aims to do so through funding infrastructure investment where it is needed to allow housing developments to get off the ground, for example land decontamination work or a link road to provide access.
Growing Places money has been allocated indicatively to LEPs using population size and earned income as criteria. On the whole, the larger the LEP the more money it is likely to receive. Money has also been allocated to the few local authorities that still do not belong to a LEP. Allocations range from a total of £39.4m for the Pan London LEP to £3.6m for the Worcestershire LEP, and from £12.84 per head in the Enterprise M3 LEP to £5.04 per head in London.
However, the Growing Places money has not yet been paid out, nor will it be until the LEPs can satisfy Government that they have viable plans to spend it. Crucially, ministers want LEPs to use their Growing Places money to create revolving funds, reinvesting income to generate private sector investment and create a source of income in the medium and long-term. The success of these funds will depend on the viability of the investments made by each LEP, so business cases must be sound.
It is up to Government to ensure they demand and receive high quality proposals from each LEP before handing over the money. As Centre for Cities highlighted recently in Cause Célèbre or Cause for Concern, progress made by the 24 original LEPs is mixed with only two having published their full strategies. Growing Places requires all LEPs, including those established very recently, to step up to the mark. £500m is not a bottomless pot when divided among 38 LEPs and required to fund hugely expensive, previously unaffordable infrastructure projects.
LEPs will need to submit pre-qualification questionnaire to receive their funds, including passing a test of their fitness for purpose. However, the pre-qualification questions focus on governance and accounting arrangements. The Growing Places prospectus states that if a LEP commits “to working to achieve the funds [sic] objectives then you will qualify for funding.” This suggests that the quality and viability, as opposed to the mechanics of LEP proposals will only be assessed on a basic level.
Taxpayer value for money from Growing Places depends on a few key factors:
- proposals underpinned by a coherent economic vision
- viable plans to set up revolving funds to leverage private sector investment;
- willingness among LEPs to band together to create joint infrastructure funds (as recommended in the prospectus) to invest across boundaries, rather than engaging in politically motivated competition.
The Government should not allow their stated objective to pay the funds out before the end of the current financial year to override the need for proposals that do more than tick the right boxes.
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