Thomas Bridge 25 June 2014

Spotlight turns on LEPs

Spotlight turns on LEPs image

Only a year is left until the public cast their votes in potentially one of the most closely contested general elections for some time. With party political machines whirring into life, the country’s economic stability has come under unprecedented scrutiny.

Regional growth is being closely examined and the country’s 39 Local Enterprise Partnerships (LEPs) have been subjected to an onslaught of questioning. Senior MPs, think tanks and councils have recently been behind a barrage of hard-hitting reports, with some calling for a radical overhaul of the regionally owned partnerships.

Established in 2010, LEPs have been fundamental in determining area-wide economic priorities - free from central control and able to respond to local need under the stewardship of business and civic leaders.

Significant Government funding has been directed into the programme, the Regional Growth Fund’s third round alone providing £378m for LEPs to administer to SMEs.

Yet the Centre for Local Economic Strategies (CLES) recently launched a broadside against the economic influence of LEPs, claiming the organisations were failing to build ‘resilient local economic strategies’.

Chief executive of CLES, Neil McInroy, warned many of the partnerships were ‘relying on a narrow idea of what economic success looks like’ and failing to acknowledge economic infrastructure, social institutions, poverty and social issues.

Adding to the debate, think tank IPPR North warned current funding systems were forcing LEPs to stick to the Government’s definition of growth rather than one of enduring sustainability. Facing such criticism cannot be easy. Yet Alex Pratt, who chairs both the LEP Network and Buckinghamshire Thames Valley (BTV) LEP, remains positive about the programme.

‘We’re all about doing the right thing for the long term in a sustainable way,’ Pratt emphasises. ‘Long term has always been at the heart of the LEP idea.’

‘You get local people together who really understand at the coalface what are the dial movers in the local economy, what’s going to make the difference in the long-term, and you chart a path in that direction.’

Pratt emphasises that the BTV LEP has done an ‘enormous’ amount of local work, including recently enabling around 40,000 local premises with superfast broadband. Levels of funding and authority handed down to local partnerships no doubt influence such success stories.

Calls for devolvement of power are hardly new, with the core cities being notably vocal on the subject in recent months. A survey of county and unitary authority leaders undertaken by the County Councils Network recently added to the debate, finding 62% of respondents thought LEPs lacked sufficient devolved cash.

Pratt understandably welcomes the idea of more decentralised funding, yet remains hesitant about a sudden influx of cash and power into the system. Suddenly granting LEPs ‘everything’ would be a ‘very high risk’ strategy, he suggests.

Devolution should be undertaken ‘in a staged way’ that allows partnerships to ‘get used to delivering these things and putting the capacity in place’, Pratt maintains.

‘It’s very important that trust is built and that people can believe what people promise they’re going to do they actually deliver.

‘As LEPs, we have to be realistic in terms of how much we are likely to be trusted given that we are new and are just putting the promises forward, never mind delivering them.

‘One would hope we’ll get into a virtuous circle where LEPs do the right things, do them well and then we grow the degree of flexibility, freedom and budget devolved to a local level,’ Pratt adds.

Devolution of power was also central to a recent dossier from former Labour Treasury and local government minister John Healey and The Smith Institute, in which calls were made for a radical overhaul of the LEPs system

Healey recommended drawing on the experience of the now defunct Regional Development Agencies and their LEP successors to ensure strategies are fit for the future.

Warning against a ‘wholesale change of direction’, Pratt says the most successful LEPs will be in regions where ‘local authorities and businesses actually subjugate their short-term institutional interests for benefit of place’. Pressure is similarly growing on regional partnerships to unite over a common goal for local growth.

‘No LEP is an island,’ Pratt affirms. ‘Every LEP should be working with the LEPs around it on sub-national matters such as strategic transport infrastructure. Equally there’s a great reason for all the LEPs to be working together under the LEP Network on major policy matters for the whole network, just as it’s important for each LEP to – in a competitive sense – fight its case against everyone else in the bidding process.’

He suggests there will be a ‘natural coalition’ of LEPs uniting over different issues, irrespective of change in central government. Such partnerships would most likely form around areas of mutual interest.

If the subject was transport, such unions might be geographical – Pratt suggests. ‘If it were something like the different need for rural based LEPs to core cities, then it might be on a theme basis.’

Coalitions could also form around sectors, with the motor sector being earmarked as a key area of interest.

However, just as with local authorities, it is nigh on impossible to generalise across the country’s 39 LEPs. Reports focused on improving the pursuit of economic growth can surely be welcomed, yet a single image of ‘success’ can be difficult to extend across all the country’s regions.

Voicing concern about a universal idea of ‘what good looks like’, Pratt suggests the wave of critical reports on local partnerships ‘need to be treated with caution’.

‘We all need to try and work out a more qualitative way of comparing the performance of different LEPs with one another because we are all so very different, and trying to achieve such very different things in such different timescales.

The policy, he suggests, has ‘set up 39 different animals’ and assessment across the groups is like ‘comparing a hyena and a mouse with an elephant’. Let’s hope this menagerie of local partnerships can withstand the scrutiny and continue to work towards regional growth.

This feature first appeared in Local Government News magazine. Register for your free copy here

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