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Danger of being bogged down in transition from RDAs
There’s been a flurry of activity since last week’s Cable-Pickles letter on local enterprise partnerships.
Councils across England are now actively working out which LEP they should join. There’s not much enthusiasm at this stage – cities are starting to realise that funding for LEPs will be scarce, and are disappointed that some functions (e.g. inward investment) will be sent back to the national level. Overall, we think LEPs are well worth pursuing – but there’s a big risk that they get bogged down in transitional governance stuff.
LEPs are now starting to take early shape in all regions across England. Yorkshire & Humber will split into four LEPs – West Yorkshire (including Leeds-Bradford), North Yorks (inc York), Hull & Humber, and South Yorks (inc Sheffield). And it looks like the West Midlands will do the same, splitting into Birmingham, Black Country & Solihull, Coventry & Warwickshire, Staffordshire & Stoke, Shropshire & Telford. And so on.
The North East is the only region that may want a regional LEP, but even there it’s possible that Tees Valley may go its own way. All regions, though, might hold onto some form of regional body – to deal with e.g. Europe and strategic transport projects.
It’s already clear that LEPs will have less funding than RDAs. This year, RDAs have £1.5bn between them. LEPs will be able to bid for part of the £1bn Regional Growth Fund, but that will be skewed towards the North & Midlands, and spread over two years starting in April 2011 (i.e. £500m per year). And despite the mixed messages coming out of CLG last week, I bet that councils will end up having to finance LEPs’ running costs – like the AGMA model in Greater Manchester. None of this should be a surprise, but for some reason it is.
On one level, LEPs will have a broader range of responsibilities than RDAs – over planning and housing, transport and infrastructure, employment and enterprise. It’s not yet clear how powerful a role LEPs will play on this stuff.
On another level, it looks like LEPs are losing control over inward investment, business support, innovation and business finance. CLG has certainly found this bit difficult, and some city leaders have already expressed disappointment to me. There is a logic for most of this – as we said in our RDAs note in Jan (page 5). But many cities are concerned that UK Trade & Investment tends to focus primarily on the South East, so UKTI will need to demonstrate that it is truly capable of championing investment into all cities across England.
We want LEPs to have strategic powers over transport, housing and planning – so they can make a real difference and help trigger new private sector growth. As some of you have already pointed out, there’s a real risk that the transition from RDAs will be a messy distraction. We don’t have the time or money to get sidetracked, so it’s important to make a success of this.
I’ll be discussing all this with a West Midlands audience, in Birmingham this Friday. Will report back.
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