By Richard Johnstone in Manchester | 3 July 2013
Local Enterprise Partnerships boundaries could be redrawn, Business Secretary Vince Cable has indicated, saying that the scope of the 39 areas is ‘not set in stone’.
Speaking to the Local Government Association conference today, Cable also defended the government’s creation of a Single Local Growth Fund containing just £2bn of pooled spending to be devolved to LEPs from 2015/16.
Cable told delegates there were ‘variations’ in the performance of the partnerships, which were created by the government in 2010 after the abolition of regional development agencies. Some were still ‘struggling to define their own role’, he said, while others had ‘a lot of energy’.
However, the scope for them to work with councils to support growth was ‘substantial’, he added, and would be enhanced by the allocations from the Single Local Growth Fund from 2015/16.
There was ‘growing momentum’ behind the idea that LEPs should be used for more decentralised decision making, Cable told delegates. Lord Heseltine recommended this in his growth review, which also called for the creation of a single fund.
The government’s response, set out in the Spending Review, said all LEPs should reach a ‘growth deal’ with government, using a similar model to the City Deals that have already been agreed with the core cities in England. The £2bn ‘single pot’ would be the ‘key new ingredient’ of the programme and would be allocated based on these agreements, Cable said
Defending the size of the fund after criticism that it is only a fraction of the £49bn Heseltine had recommended, Cable said the government did not want to see ‘the creation of 39 crypto-RDAs’.
He added: ‘That makes no sense to me. We have to have a basic strategic approach at a national level and the question is how we balance these two things.’
Asked if there were any provision for LEPs to join together to become more efficient as part of these negotiations, Cable revealed that he didn't see their boundaries as being ‘defined for all time’.
He highlighted that the boundaries of existing partnerships in Yorkshire were already being examined for possible change, and that the government would ‘be up for’ alterations.
The LEPs' boundaries were ‘experimental’, as the government wanted to find where the energy and dynamism would emerge.
He added: ‘Obviously we would be up for proposals to change them. They’re not fixed in stone.
‘I think what we would begin to become nervous about is if these become gargantuan organisations that approximate to the RDAs. The RDAs were too big and too remote. But flexibility about changing boundaries is no problem.’
Cable’s comments follow criticisms by the deputy chief executive of the Centre for Cities think-tank. Speaking at a fringe event run by the Institute for Public Policy Research North, Andrew Carter said it was a ‘myth’ that LEPs broadly covered travel-to-work areas. ‘They are a wonderful mismatch after political negotiations – some are very large, some are very small, some are very strange in their orientation and their deliberations.
‘This notion that the LEPs somehow reflect functional economic geography is not true, and that asks the question of why we are pursuing LEPs as the only policy.’
