By Jaimie Kaffash
27 October 2010
A lack of central government funding for Local Enterprise Partnerships could hamper the establishment of some, local government experts have warned.
Business Secretary Vince Cable yesterday told members of the Commons’ business, innovation and skills select committee that there would be no central funding to set up the partnerships. LEPs, which replace regional development agencies and bring together councils and local businesses to aid economic development, will bid for funds from a £1.4bn central government budget.
But Labour MP Adrian Bailey, who is chair of the committee, expressed concern that the lack of funds to establish them in the first place would affect deprived areas.
‘The most disadvantaged regions are those with the most public sector employment – and they often lack the business capacity to submit funding bids to the regional development fund,’ he said.
Nick Hope, senior researcher at the New Local Government Network, said Cable’s announcement was ‘disappointing’ considering the emphasis put on LEPs by this government. A small amount of funding – ‘relative cornfeed’ – would remove the barriers for local authorities in setting these up, he added.
A lack of Whitehall funding is unlikely to derail the LEP project, Hope said, but he added: ‘There are areas where the partnerships are already well developed and already have secretariats. But for the areas that are more at the embryonic stage of creating LEPs, this could be a real barrier.’
However, Philip Mind, senior consultant at the Local Government Association, said the announcement did not come as a surprise.
‘There was not much of an expectation that there would be admin funding for LEPs,’ he said.
But he added that a council’s efforts to develop its LEP would not determine how much of the £1.7bn fund it receives.
‘Capability to produce good bids will be an issue, but I would not give it much weight itself.’
