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This week’s Government announcement of new core funding for the Local Enterprise Partnerships (LEPs) is welcome, and not just because the LEPs need to be free to focus on local economies rather than on their office bills. The most significant part of the new funding is the £20m available in exchange for local match funding. This arrangement will test the extent of local commitment, reinforcing the need for partners who will back their LEP to deliver.
New DCLG minister Brandon Lewis was previously Chair of the All Party Parliamentary Group (APPG) on Local Growth. The core funding announcement reflects one of the 12 recommendations in its recent report, Where Next for LEPs?. Centre for Cities submitted evidence to the APPG, based on our continuing work monitoring the progress of the LEPs, and our suggestions feature heavily in its conclusions.
Government should take two actions as a priority to boost the status and the effectiveness of LEPs. The first is to use LEP geographies as the basis for City Deals wherever possible, as Centre for Cities has proposed. With an announcement overdue on Wave 2 cities, the City Deals process is a big moment for the LEPs. City Deals negotiated at LEP-scale could herald the start of a new growth conversation between LEPs and Government, and give LEPs an assured future role. However, not all LEPs provide the right geography for City Deals, and not all of them will be able to bring together the right partners. In those areas there may be a need for a different LEP geography altogether, or the LEP may have a discrete agenda distinct from and complementary to the work of the cities.
The second priority for Government is to consolidate funding streams for LEPs, another Centre for Cities recommendation. The new BIS-CLG funding is valuable, but it also represents another in a series of ad hoc funding announcements, each complete with its own bidding process. Continual bidding is a poor use of LEP resources, and the gradual release of ring-fenced funding restricts LEP capacity to invest in local economies. If LEPs are trusted vehicles for guiding local growth Government should channel funding without imposing requirements, and allow LEPs to agree their own priorities for spending it.
Of course, simply throwing money at the LEPs is no guarantee of success: match-funding is an important principle because it requires local authorities to split risk with Government by investing their own funds and accepting their share of responsibility for how the LEP spends its money. This mirrors the concept behind City Deals, that local authorities accept greater accountability in exchange for powers and resources.
With each new injection of Government funding, the LEPs must accept increased expectations and greater pressure to deliver. Some LEPs will be able to meet expectations and others will not; this is an inevitable consequence of a localised system and should not be regarded as a failing. However, it also means that national politicians need to be clear about what support they provide to struggling LEPs working within struggling economies. Otherwise there is a real risk that these places will fail to make the most of the limited funding available, and fall even further behind.
Senior Consultant, City Economics at Arup
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