7 January 2011
The government’s regional growth programme has received a boost with renewed backing from the prime minister, private sector endorsement and more cash to pay for research.
The Local Enterprise Partnership scheme, which aims to improve local economies, brings together public sector organisations and businesses.
Prime Minister David Cameron yesterday announced a new £4m pot, which LEPs can bid for to pay for economic analysis in their area.
The ‘capacity fund’ is expected to give grants of around £100,000, to be matched by the bidding partnership.
Andrew Carter, head of research at the Centre for Cities think-tank, told Public Finance that although the new funding was modest, ‘the announcement shows the government is still committed’ to the much-maligned project.
‘It is a welcome sign that the initial interest in this is being maintained.’
But, he added that, although any extra funding was welcome, the £4m would be better spent on encouraging LEPs to become established locally.
‘We’re already awash with analytic work,’ Carter said.
Carter was optimistic that some LEPs, particularly those that build on existing relationships – such as established partnership working around the Leeds city-region – could succeed.
Meanwhile, business leaders on Humberside gave the scheme a new vote of confidence by calling on ministers to allow them to establish their own LEP.
The move came after the Department for Business, Innovation and Skills rejected overlapping bids from three local authorities in the region.
Peter Aarosin, chief executive of shipping firm RMS Group, wrote to Business Secretary Vince Cable asking him to approve a business-led LEP covering the four council areas in Humber region.
Once established, councils would be free to get involved, he added.
Carter said the LEP scheme ‘has felt like a public-sector-led process’, but ministers have been clear that active involvement from business will be vital to its success.
Critics of the LEP programme have pointed out that the £1.4bn, three-year, regional growth fund, which will pay for it, represents only a fraction of the cash available to regional development agencies, which LEPs will replace.
A reportfrom MPs published last month called on the government to inject extra funding into start-up LEPs.
