LEPs given £4.8m as regional quango closure costs hit £100m
By Vivienne Russell | 18 September 2012
Local Enterprise Partnerships are being given a £4.8m core funding boost this year, it was announced yesterday.
The news comes as ministers disclosed that it cost £100m to scrap their predecessors, regional development agencies.
In a written answer to a question tabled by the Liberal Democrat MP John Pugh, business minister Michael Fallon said redundancy costs for the eight RDAs located outside London were estimated to be £60.7m. ‘This includes the cost of staff leaving on compulsory and voluntary terms,’ he said.
Other winding-up costs were estimated to be £47.9m. Fallon said: ‘The largest single is a £16m payment to the Homes and Communities Agency pension scheme in respect of former RDA staff who are members of the scheme.’
The RDAs were scrapped in the ‘bonfire of the quangos’ announced shortly after the coalition took power in 2010. Their job of stimulating regional economies was passed down to more locally focused Local Enterprise Partnerships.
Yesterday, ministers announced that all 39 LEPs in England were being offered an immediate £4.8m funding boost to draw on for the rest of the financial year. This would be followed by payments of up to £250,000 on a matched funding basis to each LEP in each of the next two years.
Local growth minister Mark Prisk said central government support for LEPs totalled £25m and would provide them with financial stability to build on their ‘early successes’.
He added: ‘If matched by local support, this could mean that up to £45m will be available to help Local Enterprise Partnerships turn their plans into jobs and growth. This funding will help [them] plan for the long term and ensure they can remain locally led instead of dependent on central government support.’
The Department for Communities and Local Government and the Department for Business, Innovation and Skills are contributing equal parts to the support funding of £4.8m for this year and £10m in each of the two following years.