Government outlines vision for self-funded local enterprise partnerships
The coalition government has fleshed out more detail of how local enterprise partnerships (LEPs) – the planned replacements for regional development agencies – will work in practice.
The proposals include having equal representation between local authority and business leaders on partnership boards and requiring LEPs to fund their own day-to-day running costs.
In a joint letter, Business Secretary Vince Cable and Communities Secretary Eric Pickles invited local groups of councils and business leaders “to come together to consider how you wish to form local enterprise partnerships”.
The ministers outlined some of the parameters for LEPs, although they said they wanted to encourage a range of ideas.
These “parameters” include:
- LEPs’ role: “We anticipate that local enterprise partnerships will wish to provide the strategic leadership in their areas to set out local economic priorities.” The partnerships are central to realising the government’s vision of an economy rebalanced towards the private sector, the letter said. LEPs will want to create the right environment for business and growth by tackling issues such as planning and housing, local transport and infrastructure priorities, employment and enterprise, it added. “Supporting small business start-ups will therefore be important.”
- Governance: For LEPs to be effective, it is “vital” that business and civic leaders work together. The ministers said they believed there should be equal representation on the boards of LEPs, with a prominent business leader acting as chair. However, the letter added that “we would be willing to consider variants from this, such as where there is an elected mayor responsible for the area, if that is the clear wish of business and council leaders in the partnership area”.
- Size: The government said it had been concerned that some RDA boundaries did not reflect economic areas and that it wanted LEPS to “better reflect the natural economic geography” of the areas they serve. “To be sufficiently strategic, we would expect that partnerships would include groups of upper tier authorities, but are flexible about how large they will be,” the ministers said, adding they would not object to LEPs being established that match an existing RDA’s area “if it is clearly the wish of business and civic leaders”.
The letter said that LEPs that are approved will need to fund their own day-to-day running costs. “We are also considering how bidding arrangements for government funds will operate within the new system,” it added.
The government plans to publish a paper in July setting out its economic development plans. Outline proposals from partnerships of local authorities and businesses will have to be submitted no later than 6 September.
Cable and Pickles said they were working with RDAs on the transition, which they said would be orderly and with a clear timetable.
Some of the RDA’s areas of responsibility, such as Regional Strategies, are being scrapped, while others will be led nationally.
Areas that will be dealt with on a national basis include inward investment, sector leadership, and responsibility for business support, innovation and access to finance, such as venture capital funds.
Separate discussions are being held with the Mayor of London about the decentralisation of powers in the capital.
In a statement, Eric Pickles said: "If you want to rebuild a fragile national economy, you don't strangle business with red tape and let bloated regional quangos make all the decisions. Urgent action is needed to rebuild and rebalance local economies so that new businesses and economic opportunities spread across the country."
Cable added: "We want a structure that reflects the real interest of enterprise and local councils – local enterprise partnerships will provide that vision and then take on the task of renewing local economies and tackling local barriers to growth."
