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LEPs’ growth plans ‘leave much to be desired’, claims critical thinktank report

LEPs’ growth plans ‘leave much to be desired’, claims critical thinktank report

🕔12.May 2014

Local Enterprise Partnerships are paying scant regard to the need to build economic resilience and protect communities against a future recession, a major study has concluded.

LEPs are more likely to be concerned with short-term measures, in particular a drive for “unbridled private sector-led growth against a backdrop of public sector austerity”, according to research by the Institute for Public Policy Research (IPPR).

The study does not detail the performance of individual LEPs, but comments on a “huge variation in the nature, length and thoroughness of strategic economic plans and growth plans”.

The report, ‘Building Economic Resilience?, warns: “In the wake of the recession, one of the most important questions that must be asked is whether we are now building local economies that are more resilient. If secondary evidence from local economic development plans is anything to go by, then the answer must be a resounding ‘no’.

“With few exceptions, no LEPs appear to be taking a systematic approach to building economic resilience. A handful have worked up plans around one or two resilience issues, some include a liberal scattering of key buzzwords on the topic, but for most, issues of resilience are of second-order importance to the primary task of driving high-value productivity growth.”

IPPR said: “Most LEPs have at least one area of resilience in which they demonstrate some good planning, but performance was generally best around those resilience measures which align more closely with traditional economic growth drivers. Against other measures, the plans leave much to be desired.”

The report found:

  • Most Strategic Economic Plans did not present a detailed understanding of the essential interactions between the LEP and the globaleconomy. Almost all of the LEPs acknowledged threats to their economies, but half of these references were merely in passing.
  • Only two-fifths of LEPs touched on the causes of long-term unemployment, and where solutions were proposed these were not well-integrated into their wider plans.
  • Few LEPs saw diversity and inclusion as part of their role, and just half of them mentioned tackling poverty and inequality.
  • Instead of seeking collaboration with neighbouring LEPs on key areas, all too often there was evidence that LEPs were too afraid of competition to see the benefits of a more collaborative approach.
  • Less than a quarter of LEP plans make any demands for local powers or greater flexibility to pursue local economic resilience.
  • A third of LEPs made no mention of the importance of public transport in their plans.

All LEPs were found to be embracing digital connectivity, with almost all plans mentioning superfast broadband roll-out. However, there was relatively little further exploration of research and development opportunities and other new technologies.

The report suggests that some LEPs are operating in isolation: “The vast majority of LEPs did evidence some engagement with their stakeholders and businesses, but in most cases this appeared to be quite a shallow commitment.

“Perhaps unsurprisingly, few LEPs took the initiative to engage meaningfully with civil society and citizens, while local voluntary organisations and social enterprises were seldom mentioned.”

The IPPR report urges the Government to ensure that LEPs place greater emphasis on long-term economic sustainability and resilience as well as the immediate demand for productivity gains.

LEPs should promote responsible business practices and wider social outcomes, including tackling long-term unemployment, poverty and inequality, the report adds.

The IPPR study is the latest thinktank report to examine the performance of LEPs.

The left-leaning Smith Institute recently published its findings, setting out proposals “to make LEPs fit for the future” which were warmly welcomed by Shadow Chancellor Ed Balls and Shadow Infrastructure Minister Lord Adonis.

The review found LEPs “to have more shortcomings than strengths”, to be inadequately resourced and “beset by bureaucratic hurdles”. It recommended rationalisation to create a smaller number of larger and more effective LEPs covering a population of at least a million people.

Labour leader Ed Miliband has promised to double the amount of growth fund money available to LEPs, from £10 billion to £20 billion, but the deal is dependent on councils in city region areas forming Combined Authorities.

Mr Balls and Lord Adonis contributed an introduction to the Smith Institute report setting out Labour’s latest thinking on LEPs: “There needs to be a much bolder and simpler offer of devolution to city and county regions than what has been on the table so far.

“LEPs have had to grapple with a myriad of funding pots and initiatives available to them. As fledgling bodies, initially given no funding at all and relying heavily on private sector board members who volunteer their time, this has meant their limited capacity has not been put to good use.

“Not enough has been done to strengthen partnerships between local authorities and independent LEPs – and the business and higher education leaders represented by LEPs – focused on clear economic priorities.

“These insights informed the interim conclusions of the Adonis Growth Review, which proposed to strengthen LEPs and encourage the formation of Combined Authorities, bringing together LEPs and local authorities at the city region level, with responsibilities for transport, infrastructure and wider economic development.”

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