On
Wednesday morning I found myself in the Caledodian Club at 8.30am,
eating posh biscuits and feeling decidedly out of place in a sea of
suits. I was at a seminar, organised by the Westminster Social Policy
Forum thrillingly entitled Regeneration
and local economic growth in England - innovation, investment and the
future for LEPs.
I
went to this because I'd wangled a free ticket, and someone on the
Just Space Economy and Planning (JSEP) mailing list mentioned it may
be interesting, but I had no idea what LEPs (Local Enterprise
Partnerships) were. So, in case you are as ignorant as I, LEPs
are partnerships between Local Authorities in England and business
bodies, which exist for
the purpose of promoting economic
development. There are 39 of them, and a
bit more information can be found here.
LEPs
were set up when the Regional Development Agencies were 'burned to
the ground' (in the words of one of the speakers) by the Tories in
2012. If you don't know what they were either, they were then
non-departmental public bodies set up by Labour from 1998 to promote
development - you can find out more here.
Significant for me is the London Development Agency, which came into
being in 2000 when the Greater London Authority was set up (and we
elected Ken Livingstone as Mayor of London) which has now been
replaced by the pan-London LEP, nattily entitled the London
Enterprise Panel (acronym also LEP).
With
a couple of small peeps of dissension, the speakers at the seminar
mostly agreed that LEPs are a good idea, and that the private sector
is a source of bounty for economic development. Several key themes
emerged over the course of the morning:
-
Flexibility – LEPs are not well defined, so they have the potential to be anything
-
Purpose – what are LEPs for?
-
Accountability – what are LEPs up to? In whose interests?
-
Resources – who pays for it and how is this significant?
Resources
In 2012 LEPs were set up on a wholly voluntary basis, with no
resources and the expectation that activities would be self-funded by
local business and local authorities (LAs). The problems with this
are obvious. First, LAs have suffered massive budget cuts, to the
extent that because there is no statutory requirement for them to
have departments responsible for economic development, many have
disbanded them (and consequently lost their expertise) altogether.
Second, the types local business which would have money and time
available to contribute would only be the bigger ones, who are
already more powerful and don't necessarily represent the interests
of small local business, and certainly don't me necessarily represent
the interests of local non-business people.
Recently, EU money (from the European Structural Investment Fund and
the European Social Fund) has became available for LEPs to apply for,
with present project funding of between €95
and €250 million per LEP.
They have the freedom to pool money from different funds, but
significantly it must be 50% match funded from the private sector.
This requirement is reflected in the disinterest in the money
available from the European Social Fund in for building social
housing or retrofitting existing social housing as low-carbon. The
returns are low, so because the private sector must be closely
involved it is unlikely to happen through the mechanism of LEPs, even
though money is available for it.
European law dictates what can and can't be done and the European
Social Fund is particularly interested in employment, education and
skills. LEPs get the money, they draw up strategies for spending it
(although several speakers said that actually spending it is more
complicated than it sounds) and ensure that the proposed outcomes
happen. The EU prizes delivery and performance above all else, but
the majority of LEPs have a permanent staff of under 10 people, so
how this actually happens was the focus of much debate.
Keith
Burgess from the Federation of small businesses summed it up nicely.
Although there are resources
from the EU, do the skills and capacity exist to manage these? The
LEPs are composed of private
interests and local authorities,,
with
few which include local communities in the development. The
UK Government is
keen on locally-led growth... but growth
for its own sake seems pointless, for whose benefit?
Flexibility
Professor John Shutt suggested the engagement of LEPs, it is hugely
advantageous for universities and FE to be key partners, because
every LEP is different, all over the UK. Economic restructuring of
the city, developing new institutional structures to deliver economic
growth at a city-regional scale, which is not an easy task.
Alex Pratt: For the first time in living memory we are sitting down
locally to consider local economic imperatives. It’s the first time
we’ve got buy-in from local businesses. 50% of the LEPs are Local
Authorities. All LEPS are different, but in general there is much
more business engagement than there was with the Regional Development
Agencies.
Alex Pratt: Delivery is the focus of LEPs, the LEP network was
devised in order that 39 separate solutions don’t emerge to solve
the same problem. It will not go away soon, LEPs are set in stone
(although how soon is soon?). Competition should be between between
the UK and the rest of the world, not within the UK.
Purpose
Baroness Valentine, Chief exec of London First, explained that the
Pan-London LEP works closely with London First on the long term
economic development of London, focussing on things like HS1 and HS2,
the Northern Line Extension. Other cities can learn a lot from the
way these have been developed. London needs to invest in transport
and housing in order to maintain growth, we have a projected
population of 10 million by 2036.
John Shutt echoed this: Place matters, powerful city-regions are
important in the global context, cities need to federate with one
another in order to be globally competitive. The LEPs need to
understand local institutions and economic situation. Place-based
issues include leadership and governance locally, institutional
restructuring of the LEPs, analysis of assets networks and places
with development potential (to do this at a fine enough grain to
appreciate the nuances of particular streets requires huge resources
– local authorities certainly don’t know this level of detail).
There are problems with overlapping boundaries and places which lie
on boundaries in terms of delivery, there needs to be policy in place
to drive co-operation between LEPs rather than competition between
the regions. London is particularly good at this, elsewhere is less
so. Some places are combined authorities, others are not and it is a
complex, evolving and contradictory process. Margaret Hodge in her
report on the LEPs argued that not much of the money was actually
reaching businesses.
Carol Sweetnam gave a run-down of I was particularly interested in
Community led local developments, although I had great difficulty
finding out about his on the internet afterwards – mentioned an
orchard which apparently had regenerated an area, created jobs,
community cohesion and all sorts of other things. THANK GOD FOR
ORCHARDS.
Alex Pratt was an excellent speaker, very engaging and spoke without
slides which was a nice change. In the UK in the length of a lifetime
we have gone from being the richest and most powerful country on the
planet to on which is £1.5 trillion in debt, with a series of crises
on our hands – housing, obesity… what’s happened to us? Part of
the problem is centralised economic decision making, and when things
are centralised you get sub-optimal outcomes. There has been no
strategic influence on the factors which influence production
locally. We seem to have all agree that the private sector is the
source of all things good. The problem is that the balance is wrong
between the short term political priorities and the medium to long
term economic priorities. The LEPs will possibly be a step along the
way towards solving this, some by choice, some co-erced. We run a
nationalised system, eg. skills are nationalised, the national system
is ‘dug-in’, and the LEPs have less support than we might like to
see ideally. Councillors sometimes see LEPs as a ‘slap in the face’
Accountability
Professor John Shutt established a core theme when he argued that
they organisation around governance, resources and funding has not
yet been established. John Shutt raised the question of governance,
and noted that resources are required for LEPs to be accountable to
everyone else in what they do, and as yet we do not know where the
money for this comes from.
Keith Burgess from the Institute of Economic Development said The RDA
valuation reports were going to be scrapped, and the Institute of
Economic Development has saved them for the LEPs to use. LEPs are
intended to be bottom-up. LEPs, what are they going to do and why?
Paul Watson from the FSB: Between 2008-11 95% of people who
found a job found a job within a small business or set up a small
business. Jobs in small business are jobs, and are also important for
social inclusion, they often employ those who find it difficult o
find jobs elsewhere. Local Authorities need to be empowered, and
small businesses lack trust for Local Authorities. They suspect that
LEP money will be used as an easy means of plugging deficits, and
they have a poor record when it comes to ameliorating town centre
decline. They see consultation as ‘tickbox’, and that LAs don’t
take the time to engage in genuine consultation (I have observed
exactly this in Haringey). LEPs need transparency, accounts, minutes,
members’ interests – otherwise people don’t know what’s going
on. FSB could find only 50% with published information. Governance of
LEPs should be accountable to SMEs, which are a blind spot for a lot
of LEPs. They need to ensure against ‘mission drift’ in which
they drift towards becoming mini RDAs. LEPs should be about business
support, ensuring local procurement for LAa. Business rstes reforms
incentives (Enterprise Areas) are not working.
Comments
The
problem here seems to be between the scale of the LEP, and the scale
of a large proportion of the economic life in an area, which is SMEs. I
wondered if there is any mechanism in place to help very small
businesses, and those which belong to non-native speakers or those
with a lower level of formal education. All
in all, it seems there are 39 bodies throughout England who have the
potential to bridge the gap between vast institutions which may be a
source of money, and the individual business person who lives and
works in Tottenham. But there are 59 million people in England.
Divided into 39 LEPs that's 1.5 million people each. That's a lot of people for a small, voluntary, business-led organisation to be of much use. Which is probably why I've never heard of LEPs before.
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