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What would Labour do with LEPs?

What would Labour do with LEPs?

🕔05.Nov 2012

No sooner had Labour reluctantly abandoned plans to revive Regional Development Agencies (RDAs) than Michael Heseltine recommends to the Tory-led government that they endower Local Enterprise Partnerships (LEPs) with budgets and powers comparable to those which RDAs once held.

The median voter may still be oblivious to RDAs and LEPs but Labour has been on something of a journey with RDAs, which has resulted in the party coming to a position that would mean LEPs would have a life beyond 2015 in the event of a Labour government.

Prior to the last general election, Labour warned that the ending of RDAs would be one of the dire consequences of Prime Minister Cameron. When he did this it produced “only a whimper of protest from local government and the business sector”. At the same time, however, Labour persisted in proclaiming the disaster of this decision – as did Heseltine.

Labour Party conference brought the news that a future Labour government would be unlikely to embark on a major new re-organisation of economic development bodies. It may be less a case of Labour learning to love LEPs than of the party being fearful of the costs of another upheaval but LEPs now enjoy support across all three major parties. More prominent parts of the economic landscape are in flux – the Financial Services Authority will soon be no more, the replacement of Ofgem is debated – but LEPs are looking more likely to stick around.

The 39 LEPs now constitute a more diverse patchwork, both in terms of their policies and their success, than the 9 RDAs that preceded them. These contrasting performances suggest that some LEPs have been more capable than others of usefully deploying what powers and resources they do have.

While many of the initiatives intended to generate growth that have come from the Department of Business in the past year or so may have been more effectively implemented through the delivery network that the RDAs constituted, the reduced capacity of LEPs was intended to be more than offset by their increased ability to adopt locally tailored approaches and be business-led.

However, the extent to which they have genuinely succeeded in engaging business is one of the most divergent aspects of LEP performance. Some localities have, therefore, foregone the benefits of the RDAs delivery network in exchange for no gain in terms of enhanced business leadership through their LEP. And the Heseltine report is not always clear whether its aim is to recover the capacities of RDAs to deliver centrally determined priorities or to devolve real capacity to LEPs to plough their own courses.

The best of both worlds would involve: first, the business engagement that LEPs were supposed to bring – and in some cases have done; second, the right spatial geography – and many contend that RDAs were too big and LEPs are better targeted on real economic areas; and third, real devolution – the capacity for localities to make their own decisions, not just implement the latest wheeze to tumble out of Whitehall.

What the government now does with a report that was predictably critical of them remains to be seen. While Labour may feel Heseltine looks back to the future – Labour’s Regional Ministers are resurrected as LEP Ministers, a National Growth Council seems remarkably like Labour’s National Economic Council – the point for Labour shouldn’t be to bask in past “glories”. Nor should it entirely be to use Heseltine as a stick with which to beat the government – though, that is inevitable. It should be to fuse the best ideas that emerge from this debate into a settled local economic landscape. And avoid the destructive chopping and changing that the government seem intent upon.

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