Gordon Marsden: LEPs – where next?

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Writing for PoliticsHome, Shadow Regional Growth Minister Gordon Marsden accuses the Government of an 'inconsistent and unfocused approach' towards Local Enterprise Partnerships.

Two years ago, the Tory-led Government following their hasty abolition of England’s RDAs ushered in plans to let localism bloom via Local Enterprise Partnerships as the chosen instrument to stimulate growth through local initiatives and control. How has that vision shaped up?

Right from the outset, the Government has pursued an inconsistent and unfocused approach towards the LEPs. Firstly they went back to the future, dusting off Margaret Thatcher’s old concept of Enterprise Zones for a number of areas across England, with no direct funding but a number of tax and other incentives. There was little strategic sense as to how this aligned with the role they claimed LEPs had in promoting regional growth. The jury’s out as to whether they will add to or merely recycle existing investment as their original incarnations did.

Then frustrated Cities Minister Greg Clark began pushing forward the concept of City Deals for England’s Core Cities. The City Deals pick up ideas that Labour took forward under John Denham in its final 2010 budget. These City Deals have been given powers which now leapfrog those offered to LEPs – including new revenue generating formulas such as tax incremental finance and moves towards local skills commissioning and city-based Apprenticeship Hubs but also opening up issues of potential democratic disconnect for those areas who do not have such powers.

While pushing these initiatives, the Government have taken their eye off the LEPs. Leading regeneration expert David Marlow highlighted the fact LEPs received only two mentions in the Government’s supposed flagship ‘Plan for Growth’. While the recent announcement of extended core funding is welcome it comes after nearly two years of dithering and complacency. And now the Government should be straining every sinew to ensure that LEPs can operate with full effectiveness in engaging with the key growth players crucial in the regions.

This is a view echoed by Parliament’s All Party Group on Local Growth, which last month published an excellent report recommending key actions the Government could take to boost LEPs, including greater involvement with work and employment policy – especially the work programme, having a greater role in informing the national economic agenda and for LEPs to have greater diversity of representation on their boards. The BIS Select Committee also recently took new Business Minister Michael Fallon to task over the Government’s failure to communicate to LEPs what they want them to do.

Other actions remain long overdue. Firstly, Government needs to give practical assistance and encourage LEPs to form better relationships with their local SMEs and FE Colleges. Both are key drivers of local growth who have felt largely shut out. A BIS survey last year showed only 1 in 10 SMEs had been in contact with their LEP and a recent survey by the FSB in Kent and Medway found only 23% of their small businesses were even aware of their local LEP. If we want SMEs to contribute effectively to economic recovery in the
regions there has to be a greater systematic involvement at all levels of LEPs.

Studies by both the 157 Group and most recently last month the Association of Colleges have also shown that LEP engagement with FE colleges has been patchy. In the visits I have made to LEPs across England over the past year, I’ve found that where active engagement exists, such as at Thames Valley LEP with Reading and East Berkshire Colleges, the benefits LEPs gains from that close collaboration are clear. Such colleges play a vital role in co-ordinating skills needs for the local labour market - other LEPs could gain from building similar relationships.

Government needs to have a strategic dialogue with LEPs on how they should relate to and work with new economic initiatives via local government. This is going to be absolutely key in providing workable strategies for finance for business, jobs and apprenticeships and indeed transport often encompassing cross regional co-operation. To take just one example, Labour has called for national government to use its procurement powers to expand apprenticeships but local authorities could also play a key role in boosting Apprenticeship opportunities by using their procurement clout to create apprenticeship opportunities across their LEP area. Government needs to incentivise, celebrate and facilitate expanding the work a number of Local Councils, many of them Labour, are already doing.

Giving LEPs the right tools to do the job especially applies to those not covered by City Deals or Enterprise Zones. Several times over the past year I have warned that the current situation risks a two speed ‘haves and have-nots’ within regions and the Centre for Cities think tank have also flagged up their concerns that the LEP model has limitations in relation to the City Deals which could put areas without the latter at a disadvantage. We need economic diversification across England’s regions. But the asymmetry of Government actions risks disparities within as well as between our local economies in the regions of England. Powers over inward investment going back to UKTI ignores the criticism of the Institute of Economic Development and others and also UKTI previous mixed track record over attracting investment outside the Greater South East.

The active, intelligent Government in which Labour believes must have strategies that encompass all areas of England, including second tier towns and cities, suburban, coastal and seaside towns and rural communities – not just city regions, vital as they are. This means making LEPs a central tool for transforming the life chances of countless individuals as well as promoting economic regeneration and now recovery across the regions of England. That is an agenda that takes forward the best of the legacy of RDAs but makes them responsive to the current situation.

That is, after all, what Ministers supposedly set up LEPs to do.


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