Give LEPs the tools they need to do the job

4 June 2014

Column originally published in the Local Government Chronicle on 22 May 2014.

Three big reports on local enterprise partnerships hit the headlines recently with some interesting findings for all of us involved in the practice of local growth and regeneration. The County Councils Network criticised LEPs’ governance and accountability, calling for the partnerships to be “grounded in democratic and accountable decision making, providing transparency when investing public funds”.

John Healey, a former skills minister, went one step further in a Smith Institute report. He sought a review and rationalisation of LEP geography, alongside purpose, function and accountability tests, and gave a considered proposition on “single pot” fiscal devolution.

I was most interested in the IPPR North report, which tested LEP growth plans for “resilience” using techniques endorsed by the Centre for Local Economic Strategies. This looked at responsible business, local resource flows, sector integration, engagement, accountability and environmental sustainability.

Surprisingly, IPPR North said “less than a quarter of LEP plans make any demands for local powers or greater flexibility to pursue local economic resilience”. More worryingly, it said “with few exceptions, no LEPs appear to be taking a systematic approach to building economic resilience”.

Alex Pratt, the new LEP Network Chair, contested the IPPR report saying that “economic development is about putting a long-term, sustainable position in place”.

Credit to LEPs and city regions where credit is due; against a continuing resistance to real devolution across Whitehall, most local growth plans at least aim for better places, upskilled communities, and sustainable solutions for long-term unemployment – one of the central criticisms of the IPPR.

But giving local economies better tools to deliver this aspiration has to be part of the deal. Another boundary and governance review could be a distraction. When I cautioned Mr Healey on this point recently, his response was: “Evolution, incentives and local leadership are best answers to the risk [of boundary reviews].”

Ironically, on skills, devolution of revenue funding is less of a holy grail given the enormous pressure on the adult skills budget. What matters more is the right incentives for LEPs to stimulate demand and motivation from the three key investors – individuals in communities, employers, and government – for better targeting of this funding to tackle long-term unemployment.

Perhaps the Department for Communities & Local Government is providing the final piece of the jigsaw. Its consultation on the legal structures governing combined authorities signals significant boundary, function and dissolution flexibilities suggesting movement is in the offing on many of the LEP concerns.

Resilience tests remain key to successful practice in local growth and regeneration. Continually applying “shovel-ready” project pressure on LEPs will not deliver resilient growth plans. But some of the recent straws in the wind suggest changes that might now help LEPs get closer to delivering this goal.