Only elected officials should represent councils on LEPs, says IoD

All local authority positions on local enterprise partnerships should be occupied by elected officials and there must be no third party representation on the LEP board from trade union, consumer, education or other backgrounds, the Institute of Directors has demanded.

In a letter to Communities Secretary Eric Pickles and Business Secretary Vince Cable, the IoD also warned of an increasing level of parochialism in the development of the emerging partnerships.

It outlined four key principles against which any bid to establish an LEP should be judged. These are:

• Activity: the central focus of LEPs must be wealth creation and economic development, the IoD said. It called for a focus on transport, infrastructure and planning. “Other activities can be undertaken if the local business community see fit, however, a clear and narrow focus will deliver more than broad and complex objectives.”
• Size: the IoD said all LEPs must be “of sufficient geographical size to be able to exercise a strategic bearing on a local economy”. The institute added that it was “very concerned at a new wave of parochialism” which it said had emerged during the bidding process. No LEP must be constructed of less than two upper-tier authorities.
• Governance: all LEPs must have a minimum of 50:50 business and local authority representation on their ‘board’, with the chairman drawn from business. It insisted that only elected officials should sit on the board as representatives of local authorities. Individuals from other backgrounds should be consultees, not board members.
• Business support: when considering the level of support for a particular proposal, the government must ask what the view was of all the nationally represented business bodies based locally, the IoD said. “It is not enough for a bid to derive support from a handful of named business proponents.” The IoD added that if an LEP could not demonstrate “near to universal business support”, it should not go ahead.

Miles Templeman, the IoD’s Director-General of the Institute of Directors, said: “The private sector has strong views on the way that LEPs should operate and we are increasingly concerned that in some areas the views of business are not being taken into account. Let’s be clear – the government should back only the very best LEP collaborations and there should be no rush to grant permission to every proposal received.”

Templeman said the IoD wanted the government to apply rigorous scrutiny to the LEP proposals it receives. The closing date for applications is today (06/09/10).

He added: “We believe that each proposed LEP should only go ahead if it has critical mass in terms of size, is supported by the vast majority of business bodies based locally, and focussed on the issues of transport, infrastructure and planning development. If these conditions are not met by bids and business is not given a central role in the governance of each new LEP, the government must be willing to say no on a case-by-case basis.”