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LEP Lowdown

LEP Lowdown

🕔10.Feb 2014

LEP WeekConfused as to what LEPs are and why The Chamberlain Files is spending a week talking about them? We have prepared a ‘policy primer’ that helps to chart the creation and progress of Local Economic Partnerships. Resistance is futile. Delve in….

Establishment

The Coalition agreement defined Local Enterprise Partnerships as “joint local authority-business bodies brought forward by local authorities themselves to promote local economic development” to replace existing Regional Development Agencies. LEPs are non-statutory bodies responsible for providing “strategic leadership in their areas to set out local economic priorities” and “rebalance the economy towards the private sector.”

LEP’s specific responsibilities were laid out in the Government’s Local Growth white paper. They cover a number of local, regional and national objectives, including: transport infrastructure strategy and delivery; supporting Enterprise Zones; local business regulation; housing delivery and; energy projects.

Initially, LEPs were told that they would not have direct central funding and would be expected to meet their own day-to-day administration costs. However, in September 2012 each LEP was offered funding to “provide immediate support”.

Location

The government received 62 proposals for local economic partnerships, of which 39 were approved. The LEPs were to represent the natural economic geography of areas and “cover real functional economic and travel to work areas.” However, early on in their establishment the Government expressed concerns that partnerships were ill fitted to economic realities, stating “[The Government is] concerned that some local and regional boundaries do not reflect functional economic areas.”

LEP Map

Governance

The Government white paper outlines general parameters on how LEPs are governed:

– Partnerships should understand their local economy and be directly accountable to local people and local businesses;

– Business representatives should typically form half the board, with a prominent business leader in the chair;

– Governance structures will need to be sufficiently robust and clear to ensure proper accountability for delivery.

The size and make-up of LEP executive boards varies, though board members are generally split between representatives from the private sector and the public sector. Public sector board members are normally local councillors or representatives from education institutions such as schools, colleges and universities.

Network

In 2011, the British Chamber of Commerce proposed a creation of The LEP Network. The organisation was to function as a “light-touch network that enables Local Enterprise Partnerships (LEPs)” to “discuss issues of shared importance, engage with Government, and share knowledge and good practice.”

The LEP Network is ‘facilitated’ by the British Chambers of Commerce and is “resourced through a combination of in-kind contributions from the BCC and its partners and grant-funding from the Department for Communities and Local Government.” It provides monthly newsletters and is widely considered the most central forum for the LEPs.

Funding Streams

The LEPs are responsible for bidding for several key funding streams for the regional economy. These include: Regional Growth Fund, Growing Places Fund, Single Local Growth Fund and EU Structural and Investment Funding.

When it was announced, the Regional Growth Fund was “to help areas and communities at risk of being particularly affected by public spending cuts”, covering the financial years 2011/12 and 2012/13. The 2012 Autumn Statement extended the total value of the fund to £2.7 billion, over five years from 2011/12 to 2015/16. Proposals for allocation are considered by a panel of experts, and the best are recommended for the grant. Round 6 of bidding for funding will open in summer 2014.

The Growing Places Fund is designed to tackle immediate infrastructure investment constraints, with a focus on housing and transport. In the prospectus for the funding, the Government stated that LEPs would be in the “driving seat” for the fund in deciding “the appropriate geographical scope for the fund, the nature of the partnership and governance, how prioritisation is done and the precise mechanism used to create local revolving funds.” Two rounds of the fund were awarded in 2012 and are currently being completed.

The Single Local Growth Fund was the Government’s response to Lord Heseltine’s review into public policy and economic growth, although the total figure fell much shorter than had been hoped. The money is accessed through LEPs negotiating ‘Growth Deals’ with central government, “with the allocation of the Single Local Growth Fund reflecting the quality of their ideas and local need.” The Government published its initial guidance in July 2013 and draft strategies were submitted in December 2013.

LEPs were given the responsibility for designing and delivering local investment strategies setting out proposals for the use of the European Structural and Investment Funds between 2014 and 2020. The Fund’s priorities are “innovation, support for SMEs, low carbon, skills, employment and social inclusion.” Draft strategies were submitted to Government in October 2013.

The LEPs also provide support for other key revenue streams, including significant infrastructure projects, such as HS2, the Core Cities City Deal scheme and supervising Enterprise Zones.

Reception

The Business, Innovation and Skills Select Committee ‘broadly supported’ the creation and progress in LEPs in December 2010.

However, Professor Bob Bennett, a Cambridge academic specialising in economic geography has said that there is a “danger that (LEPs) require too much effort, for too little return” and that more than “£2 billion needs to be invested in LEPs and Enterprise Zones in order to stimulate growth and jobs around the UK”.

A June 2013 report titled Where next for Local Enterprise Partnerships?, authored by the Smith Institute and the Regional Studies Association, argued that LEPs ‘represent unnatural geographies’, and this may harm their ability to encourage private sector growth.

There has also been concern expressed, by the APPG on local growth amongst others, that the funding process for LEPs is too fragmented.

Finally, some view the LEPs as too small, too undemocratic and too unaccountable for them to be responsible for large sums of public finance.

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