Posted on August 17, 2010

The government announced that it was seeking proposals and consultation on the role, governance and size of Local Economic Partnerships (LEPs) in June 2010.

Since the coalition came to power there has been a huge volume of announcements from government, with new initiatives across all sectors on almost a daily basis. There is an overwhelming weight of material and it is difficult for the private sector to engage.

LEPs should be based around where businesses operate and people live their day-to-day lives.  However, they should also provide the right structure which enables the public sector to deploy (increasingly limited) resources efficiently on the ‘right thing at the right level’.

The Northern Way (a collaboration between ONE, NWDA and Yorkshire Forward) has carried out research into the city regions – including good work on the economic linkages and relationships between city regions across the north of England.

According to the Northern Way, the

‘Northern city regions contain 90% of the North’s population and more than 90% of its wealth creating capacity. By recognising the geography of the real economy and working across administrative and institutional boundaries, city regions provide a clear basis for delivering better economic policy outcomes in areas such as transport, housing, skills, employment and regeneration. City regions can create and sustain economic growth, providing a critical mass of public and private knowledge institutions, and a vibrant environment for knowledge creation and transfer. They can provide the key transport links, connectivity and residential and amenity offer to attract higher value business, a skilled workforce, and the strategic business services and investment needed to support growth’.

The Northern Way Growth Strategy identified eight city-regions across the North, namely: Sheffield; Leeds; Hull and the Humber Ports; Liverpool; Central Lancashire; Manchester; Tees Valley; and Tyne & Wear.  Each of these areas has its own strategies and priorities, which for Leeds City Region are: strategic planning; housing and regeneration; transport; skills and labour supply; innovation, enterprise and science; economic development, climate change, financing and funding.

These are all important roles for any LEP and delivery of these services is more efficient at the city-region level.  If the LEP were to be any smaller it could miss large parts of the city region economy and its assets; too large and it could become unmanageable and inefficient. 

City-regional services

Examples where functions can benefit business when delivered at a city-regional level include:

·        Transport – by definition the city-regions are based upon the majority travel-to-work patterns and geography on the ground. Hence Barnsley is associated with the Leeds City Region rather than Sheffield which is much closer, because a significant proportion of it population work in Leeds.  By aligning the various Passenger Transport Executives with (and even within) the LEPs this would facilitate the delivery of integrated public transport investment across the relevant geography.

 ·       Economic Development/Marketing – attracting major investment and generating new enterprise is important for all economies and this could be streamlined under the LEPs. So for example when competing for a significant inward investment from overseas or a central government department relocation from Whitehall, the City Region ‘offer’ is much more compelling and the spin-off benefits are likely to be felt across all Local Authorities should the outcome be successful.  

 ·        UK Funding – the proposed Regional Growth Fund consultation document confirms that LEPs should take a lead role in coordinating the Fund, however, we are concerned about the timescale for the first bidding round in December 2010. Given that there is still a long way to go to resolve the size, role and scope of the LEPs it is likely that only a few LEPs will be successful early on.

 ·        European Funding – the European Regional Development Fund (ERDF) is an important aspect in addressing economic disparities across the EU.  The LEPs must be of sufficient scale (i.e. city-regional as a minimum) to access and administer EU regional funding.  In addition, there is currently a large amount of expertise which was previously at the Regional Government Offices (RGOs) and now resides within the RDAs who took over the operation of the current programme (2007-13).  It is important that the key practitioners are retained within the LEPs to ensure that the funding in this round is not lost or left unspent and that programmes are secured for 2014-2020.

 

LEP collaboration

As well as healthy competition between LEPs, it is important that there is a framework where the LEPs of the north are able to work together on important issues which effect the North as a whole. For example, securing the investment in the “Y” High Speed 2 lines and/or marketing the north to investors in a global context.  In this respect, structures such as the Northern Way City Regions Forum can strengthen relationships and provide an important link between different tiers of government.

 

Summary

In summary, the following significant changes would better reflect the requirements for the north of England and ensure that key public administration is ‘fit for purpose’ going forward. 

·        Organise LEPs on a functional sub-regional/city-regional basis with consistent objectives and powers to drive economic development and growth;

·        Enable all Local Authorities to become part of a LEP however geographically remote in order to ensure consistency and certainty for investors and developers;

·        Ensure that LEPs are accountable and democratic to pave the way for future devolution and therefore deliver the ‘big society’ agenda;

·        Ensure that the key services of the RGOs and RDAs e.g. strategic planning, economic development, ERDF etc are retained and embodied within the LEPs;

·        Establish a framework which represents the north of England as a whole to ensure that the North has a proper voice in North/South issues and that the North can be promoted as a whole where appropriate.

We firmly believe that the above could really make a significant difference to the economic potential of the North.