7 September 2010
The government today confirmed it has received 56 bids from councils and businesses across England to form Local Enterprise Partnerships. But on the same day a Commons select committee inquiry raised widespread concerns about the capabilities of the bodies, which will replace the nine regional development agencies from 2012.
The bidders include cities such as Liverpool and Leeds, counties such as Cumbria and Norfolk and cross-regional areas such as Greater Cambridgeshire and Greater Peterborough. A number of bids overlap, such as one for South Somerset & East Devon and another for Devon, Plymouth & Torbay.
Communities Secretary Eric Pickles said the proposals were ‘just the beginning of a new radical way of delivering prosperity and rebalancing the economy’. Business Secretary Vince Cable added: ‘The key is that these partnerships are built from the bottom up and will have the flexibility to determine their own agenda, rather than have it handed down to them by Whitehall.’
But Paul Nowak, head of organisation and services at the Trades Union Congress, told the business, innovation and skills select committee that establishing as many as 50–60 LEPs would mean each one lacked the necessary ‘critical mass’. ‘We are worried about their capacity, the resources available to them and their credibility with investors and the private sector,’ he told MPs.
He said some proposals were ‘too small to carry the clout and weight they need to support economic growth in their areas’. He suggested between 12 and 15 was a better number.
Nowak’s concerns were echoed by other witnesses, including the chair of the West Midlands RDA (Advantage West Midlands) Sir Roy McNulty. There have been six bids for LEPs across the same area. He said: ‘It would be very difficult for any one of these to address something like the MG Rover collapse. Industry will not wish to deal with six bodies to address the macro issues.’ McNulty suggested LEPs would have ‘sufficient clout’ only if they covered a population of 1 million people or more, but 2 million would be too big.
Sir Harry Studholme, chief executive of the RDA for the Southwest, raised concern that ‘inward investment’ would be lost during the transition to LEPs, as existing relationships between RDAs and business were lost.
The witnesses agreed that regional co-ordinating bodies would also need to be established, particularly to ensure that England did not lose out on European funding allocated on a regional basis. McNulty said businesses in the West Midlands were ‘crystal clear’ that a body was needed to support the LEP network.
They also felt that England’s regions would be put at a disadvantage compared with Scotland and Wales, where such reorganisations were not going on. The devolved nations’ budgets would also not be subject to the same reductions as RDAs over the next 18 months.
But David Sparks, vice chair of the Local Government Association, welcomed the establishment of more locally attuned bodies. He said the LGA had identified about 50 ‘sub-regions’ in England that would lend themselves to becoming LEPs.
But he warned the government not ‘to throw the baby out with the bathwater’ by ignoring the lessons learned by RDAs. He criticised the Department for Communities and Local Government for not consulting more widely over the scrapping of RDAs. ‘Just abolishing things French revolution-style is not always a good idea,’ he said.
Ministers will consider the bids over the coming weeks, ahead of a white paper on sub-national economic growth and the introduction of the Localism Bill.
