We believe LEPs will deliver the goods

In contrast to criticisms that local enterprise partnerships have little clout, Mark Prisk, minister of state for business and enterprise, argues that they will provide a vital framework for successful economic growth

Since the first days of the coalition government, we have made clear that we want to hand over power from Whitehall to local people, local businesses and local communities. We believe they are best placed to drive forward change for the better in their areas.

This was at the heart of the Local growth White Paper which we published last year, and it is why we believe the last government’s centralised, prescriptive model of regional economic development was holding back growth throughout the country.

Local economies did not thrive under the old system, in which many areas with vastly-different needs, concerns and ideas, were just bundled up together. The regional development agencies (RDAs), set up specifically to help narrow the economic gap between the Greater South East and the rest of the country, spent £19bn of public money over 10 years, but failed to close that gap.

Mark Prisk: This is not about cutting communities loose, but creating the right framework for business

We sought to address this early on by setting out a straightforward, coherent plan for the closure of the RDAs and, instead, asking businessmen and businesswomen across the country – the people who really know their local economies inside out – to come together and form partnerships with their local authorities.

To give business the clarity and certainty it needs to invest, some of the functions previously carried out by RDAs – including trade and investment promotion, sector leadership, innovation, business support and access to finance – will be led nationally. This move will also avoid the duplication of effort and waste of resources that were such a feature of the RDAs.

This is not about cutting communities loose, but creating the right framework for business, putting local people in the driving seat, and backing them to turn their ideas into reality.

We now have 31 local enterprise partnerships (LEPs), covering 87% of the country, approved and pressing ahead to form their business-led boards. They are working now to identify local priorities and to break down the barriers to growth in their areas.

A £4m capacity fund, launched just days ago, will enable partnerships to gather vital market intelligence on the real issues facing local entrepreneurs, and to complete their business plans.

Local enterprise partnerships can play an active role in co-ordinating bids put to the regional growth fund. There were 464 bids in total in the first round – so many innovative ideas show that communities are ready to seize the reins and make their ideas happen. A lower threshold of £1m does exist for applications to the fund, but small projects can be bundled together so smaller enterprises won’t lose out.

Local areas will not lose out on European money, either. The Department for Communities and Local Government has always had responsibility for delivering the European Regional Development Fund in England. Local authorities will have a strategic role to play in delivery of the fund, as will local enterprise partnerships.

Every partnership will be different, according to the needs of their area. Through the Localism Bill, the Government is seeking to give councils a general power of competence, which will give them the freedom they need to act in the interests of their communities. Where neighbouring councils and business agree, through the partnership, all partners will, therefore, have the powers they need to act.

Hands on: The coalition wants local people and businesses to drive economic growth (Pic: Shutterstock/Yuri Arcurs)

We have deliberately not set out a strict set of guidelines or frameworks for the partnerships to follow. To do so – especially in legislation – would have hamstrung the partnerships’ freedom before they even started. We must move away from the last government’s ‘top-down’ approach to governing, and allow partnerships to determine the form and functions which are most suitable and effective for businesses their area.

Others have questioned whether business backs the plans. The Confederation of British Industry recently said that it ‘is encouraged by the economic scale of many of the approved LEP proposals’. And the British Chambers of Commerce says that British business is ‘... ready and willing to work with local councils to ensure that our towns and cities are open for business’.

To manage a key part of the transition between RDA and partnership, we have put in place a robust process for assessing and disposing of the assets and liabilities held by the RDAs. But the truth is, that while there are some substantial assets, there are also considerable liabilities – many of them left by the last government as part of the wider economic mess that the coalition is now striving to clear up.

The process involves maximising value for money from any sales, disposing of linked assets and liabilities, together, where possible, and passing control down to the local level wherever we can.

I have encouraged the RDAs to work with local partners, including local enterprise partnerships, when developing their assets and liabilities plans, and we know that dialogue is ongoing.

We will provide the first of many opportunities for leaders of the new partnerships to gather together to discuss their ideas for growth and action with the Government and each other in the spring.

I have already visited many new partnerships and, later this year, I will be touring the country, visiting many more. I am looking forward to witnessing first-hand the results which can be achieved when business, local authority and community join together with one burning aim – to promote enterprise and growth.

The MJ and partner Governetz Public Property are hosting a local enterprise partnerships conference on 5 April at the QE11 Centre in London. Further details from Nick Werran at nicholas.werran@governetz.com