Have LEPs got the backing they need?

16 July 2013

Column originally published in the Local Government Chronicle on 3 July 2013.

Watching an ITV documentary on Scottish devolution, I was reminded of the contribution the late John Smith made to the devolution settlement for Scotland. The Smith Institute, established in his memory, recently made a strong contribution to the latest devolution tussle in English regional economic governance: the future of local enterprise partnerships.

The form and function of LEPs has been a hot issue since 2010. After the election, LGC wryly observed that the first 22 LEPs approved better resembled “22 bald men fighting over a comb”.

Would LEPs be truly empowered with resources to change economies and places? Would the coalition consider economic devolution as radically as Labour had for Scotland and Wales?

The Smith report’s message is that LEPs are a product of rapid, chaotic evolution, not grand design. Arguments for place resilience remain strong; business engagement is good in some areas, patchy in others; governance, capacity and political ownership vary considerably.

Newcastle University’s Centre for Urban and Regional Development Studies has undertaken a comprehensive survey of the 39 LEPs which provides strong insight for their improvement plans. Its findings, covered in depth in the Smith report, assess LEPs’ strategy and priorities, governance, resourcing and innovation. It demonstrates the great strides made by LEPs in city region/city deal areas, and questions the sustainability of LEP innovation.

The study raises two main concerns – the “breadth of ambition for and expectation of LEPs … distorts their organic growth”, and, “will the competitiveness between LEPs be their Achilles heel?”

Many commentators have argued that the competitive nature of the funding streams can distort competition and artificially inflate local growth ambitions. Infrastructure investment tends to dominate debate to the detriment of high-quality skills strategies. Members then struggle to reconcile these lofty ambitions with the often different, place-focused aspirations of residents.

By the time this column is published we will have had full details of the spending review. It remains to be seen whether the chancellor will be brave enough to create an equitably distributed single pot that gives some real hair tonic to the bald men.