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Government must back LEPs with five-year funding deals, say MPs

Government must back LEPs with five-year funding deals, say MPs

🕔26.Apr 2013

A Minister should be given responsibility for overseeing Local Enterprise Partnerships and the Government must commit to long term financial backing for LEPs, a Commons committee has suggested.

The Business, Innovation and Skills Committee also said  LEPs across the country could not fulfil their regeneration role without the “certainty and security” of a five-year core funding deal from Whitehall.

Committee chairman Adrian Bailey, the MP for West Bromwich West, said: “LEPs help drive the local economic growth on which national growth relies.

“They are expected to deliver long-term growth. To do this they require the confidence to make long-term investments. The current funding commitments fail to provide this. We urge the Government to support LEPs in delivering long-term growth by committing to the levels of their core funding for the five years from 2015.”

The committee is urging the Government to move away from funding LEPs on a “one size-fits-all basis” towards allocating cash on a case by case business. The report also suggests that Government might drop its insistence on matched-funding from the private sector for some LEP projects.

The proposals could benefit the Greater Birmingham and Solihull LEP, one of the largest local enterprise partnerships in the country.

GBSLEP has recently worked with Lord Heseltine in an attempt to become a trail blazer for the Single Pot funding approach, which could see millions of pounds of Government budgets handed directly to the LEP to invest locally in job creation schemes.

The committee was critical of an apparent Whitehall turf war over just who is responsible for LEPs.

Mr Bailey added: “Shared responsibility between the Department for Business Innovation and Skills and the Department for Communities and Local Government has resulted in confusion about where responsibility for LEPs lies in central government.

“Confusion must be replaced with clarity. A single BIS Minister should be clearly identified as responsible and accountable for the work of LEPs. Similarly, all LEP contact officers should be based in BIS.”

The Report also highlights concerns about the current mechanisms in place to hold LEPs to account. It calls on Government to take a more active approach to monitoring LEPs and to take opportunities, such as future funding rounds, to ensure that value for money is achieved and all LEPs remain fit for purpose.

LEPs are urged to engage with all their stakeholders more effectively and to publish measureable indicators of their performance in a format easily accessible to local communities.

Mr Bailey added: “It is encouraging that LEPs agree they should be held to account. What is not encouraging is the current lack of any actual mechanisms by which to do so.

“LEPs have a significant impact on their local community; they would be failing if they did not. Despite this, the ability for the local community to scrutinise their performance is patchy.

“If LEPs are to be held accountable for their performance, measureable indicators of that performance are needed. And they are needed in a format easily understood by local communities.

“LEPs receive considerable amounts of public money from central government. Being free to react to local issues does not absolve them of accounting for how it is used. Value for money must be demonstrated.

“The Government has so far been overly hands-off. It should, from now on, take an active approach to monitoring LEPs and must ensure that value for money is being achieved.”

The committee’s conclusions include:

–          We believe that skills should be a core priority. We therefore recommend that LEPs be required to demonstrate their levels of engagement with local education, in particular with skills and apprenticeship providers, FE colleges and schools.

–          The requirement to ‘cash-match’ public funding has, in some cases, led to over-reliance on Local Authorities as LEPs struggle to find other willing investors. We recommend that in future funding rounds, the Government considers individual LEP’s funding arrangements to assess whether cash-matching requirements are appropriate.

–          The Government should gather information to assess how well LEPs match current functional economic market areas and the impact of having overlapping LEPs. The Government should also publicise its policy of not obstructing LEPs that want to amend their geographical boundaries.

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