Ministers give green light to 24 local enterprise partnerships

October 28, 2010

The government has given the green light to 24 local enterprise partnerships, with ministers also declaring the £1.4bn Regional Growth Fund “open for business”.

The announcements were made as the government launched its White Paper on local growth. This has three themes: shifting power to local communities and businesses; increasing confidence to invest; and focused investment.

The government said local authorities would have a range of incentives to promote economic growth. The key elements – most of which have already been announced – are:

The New Homes Bonus which, from April 2011, will match fund the additional council tax raised for new homes for the following six years. £200m has been set aside to fund the scheme in 2011-12
Proposals for local authorities to keep the business rates they collect locally, reducing central redistribution
Tax Increment Financing
A “new, simple, and streamlined” planning system. This “will give communities and neighbourhoods more power over decisions, increase investor certainty and help international businesses locate, move within or stay in the UK”.

First round bids for funding under the Regional Growth Fund will meanwhile have to be submitted by 21 January 2011. These bids will be considered by an independent advisory panel chaired by Lord Heseltine.

The Department for Communities and Local Government said plans to localise the business rates would introduce genuine incentives for local economic growth. It also said that businesses could remain confident that the reforms would not lead to an increase in tax burdens without their support.

This review will consider three key issues, namely:

“how to fund councils where locally raised funding would be insufficient to meet budget requirements and control council tax levels, as well as councils who do not collect business rates, such as upper tier authorities
the position of councils whose business rate yield would be significantly higher than current spending
how to ensure that proposals retain a genuine incentive effect and reward for promoting growth.”

Communities Secretary Eric Pickles claimed that the country’s economy was skewed over the last decade “by artificial boundaries and top-down prescription that did not work”.

He said: “We want to create a fairer and more balanced economy driven by private sector strength, and our plan for local growth will create local enterprise partnerships, reform the planning system and introduce development incentives for local authorities, like allowing them to keep their business rates, so all parts of the country benefit.”

Business Secretary Vince Cable insisted that many of the proposals for LEPs showed “real imagination and initiative and a genuine desire to drive local economic growth”.

He added: “The knowledge and expertise of the private sector, local authorities and their local communities will be crucial as we work to create a better environment for business and ensure that everyone has access to the opportunities that growth brings.”

The government said Regional Development Agencies would be expected to cease activity by March 2012, insisting it would ensure “an orderly transition to the new economic delivery landscape”.

The White Paper on Local Growth can be downloaded here.

The 24 successful LEP bids were: