COMMENT
The starter pistol has gone off but will LEPs have the firepower?
S
Nick Hope is senior researcher, NLGN
ub-national economic governance is going through a
radical shakeup. The first wave of 24 local enterprise partnerships (LEPs) – cross- boundary partnerships of local authorities with strong business involvement – have been given the green light and the government has launched the Local Growth White Paper.
Within days of these announcements, a revealing letter from Mark Prisk, the minister of state for business and enterprise, was leaked.
The letter voiced his concern that, ‘there is a strong view among the business community that many LEPs lack the ambition to make significant economic impact, undermining our agenda for growth.’
The local authority
representatives, chief executives and business leaders involved in LEPs I have spoken to are not lacking ambition - far from it. Given the scale of cuts faced by the public sector, and particularly councils, many areas are acutely aware of the need for a radical new approach to local economic development. There is a real determination and drive to stimulate private sector growth and rebalance their economies.
The next
few months will be a key test of how committed the coalition
government really is to the localism agenda and decentralisation from Whitehall
16 pse
Perhaps ministers and civil servants in Whitehall should question the scale of their own ambition, rather than that of LEPs. Is central government bold enough to decentralise power and give these new bodies the policy levers they need to have a real impact on their local economies?
The government’s White Paper
makes a start on setting out some of the roles they envisage LEPs performing. It emphasises the role of LEPs in developing agendas for local transport, housing and planning as part of an integrated approach to growth and infrastructure delivery. It also highlights the instrumental functions that the government envisages for LEPs in pooling and aligning funding streams to support housing delivery, setting out key transport infrastructure priorities and supporting or coordinating projects.
In addition there is a clear responsibility set out for leveraging funding into areas. The White Paper suggests that LEPs will have an important role to play in coordinating proposals, or bidding directly, for the new Regional Growth Fund and developing approaches that attract private sector investment.
There are also a number intended functions which do not seem to give LEPs any real power at all. Few will get hugely excited about the power to ‘make representations’ on the development of national planning policy and to ‘work with’ local employers, Jobcentre Plus and learning providers to help local workless people into jobs.
Moreover, as regional development agencies are dismantled, there is now a danger that some vital areas of control will be absorbed into the corridors of Whitehall and national quangos, rather than devolved down to LEPs.
Inward investment and key sector development look as
though they will be centralised. In skills policy – where RDAs used to have a role in setting the strategy – funding will now be routed through a quango, the Skills Funding Agency, straight to colleges and training organisations. LEPs are set to have little, if any, steer over these key economic drivers.
The Regional Growth Fund will offer the same amount of money over three years as RDAs received in a year. Therefore, the key challenge is how wider public funding and private sector investment can be coordinated and directed in a much smarter way to maximise economic impact.
Accordingly, NLGN believes that LEPs should have access to a single capital pot for transport, housing, economic development and regeneration, in addition to control of skills and employment programme commissioning and influence over areas such as inward investment and key sector development. Such powers would greatly enhance LEPs’ capacity to spearhead an integrated and effective approach to economic policy.
The success of LEPs depends to some extent on Whitehall’s improved integration, fuller readiness to engage in change and – crucially - willingness to relinquish control and budgets. History suggests that such buy- in is hard won. NLGN believes that a number of reforms could help embed the principle of localism at the centre.
We recommend that the localist spirit of the coalition’s Programme for Government should be captured in a new presumption in favour
Nov/Dec 10
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