Local Enterprise Partnerships or Local Enterprise Politics?
At the end of June, Ministers Vince Cable and Eric Pickles wrote to local authorities and business leaders, asking them to submit proposals on how best to form LEPs, which will take over some of the responsibilities of England’s eight Regional Development Agencies (RDAs), excluding London, which will be axed by March 2012.
And last week, Business and Enterprise Minister Mark Prisk hosted a roundtable meeting attended by a wide range of representatives, including some from local authorities, the Confederation of British Industry (CBI), Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC), Centre for Cities, the Local Government Association (LGA) and Institute of Directors (IoD).
Following the meeting, the Government said it anticipated some LEPs will be in place by the end of 2010 so they can shadow RDAs but, according to Cable and Pickles, will only take on some of the responsibilities of RDAs. LEPs will oversee planning, housing, transport and infrastructure, employment, and enterprise and business start ups, while the responsibility for inward investment, sector leadership, innovation, access to finance and business support will shift to Whitehall.
An unnamed source told the Local Government Chronicle (LGC) that, while the meeting was very positive overall, some attendees were concerned that centralising responsibility for inward investment, business support and leadership would be detrimental to the growth of the UK economy.
The Government also announced at the end of June that it was setting up a £1 billion Regional Growth Fund which would help areas affected by public spending cuts. However, it is still not clear how this fund will relate to LEPs and there will be no clear information on how LEPs will be funded until the Government publishes a White Paper, which is due “in the summer”.
However, information about the geographic location of LEPs is starting to take shape. The LGC has published an up-to-date summary of the current geography of LEPs.
It has also been confirmed by the Government that the BCC and the FSB will both “have a central role to play” in the delivery of LEPs. Mr Pickles met with representatives from both organisations and later announced that they will help to form LEPs with local councils.
Initial rhetoric about LEPs has suggested that, following the scrapping of RDAs and Business Link, there would be clearly devolved responsibility for enterprise and business support down to a local level, with accountability restored and bureaucracy minimised.
But does the ambiguous statement that ‘business support’ will be centralised in Whitehall, with enterprise and start up support localised through councils and the private sector, suggest a recipe for local versus centralised politics? And while there will be a welcome end to regional bureaucracy, there is a danger that the bureaucracy will remain in 30-odd ‘new’ regions/local areas, resulting in a postcode lottery for many small businesses.
In theory, LEPs should deliver more openness, accountability and devolved responsibility, but in practice this will certainly be with less money, and could ultimately result in even more decisions being made in Whitehall.
Although there is officially meant to be a ‘deadline’ of 6 September for submission of public and private sector partnership proposals to form LEPs, it seems that some national organisations’ involvement has been confirmed and cemented already (the FSB and BCC) with little transparency over that particular decision-making process and their remit.
If you have any comments or opinions on the proposals to form LEPs please leave a comment below.
For more information on the timetable for LEPs click here.
For more on Mr Pickles meeting with the BCC and the FSB click here.
To read Vince Cable and Eric Pickles’ letter click here.
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