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Local Enterprise Parnerships (LEPS)

         

A LEP in The Right Direction?

Local Enterprise Partnerships (LEPs) have been put forward by the coalition government as replacements for Regional Development Agencies (RDAs). This is a fast-moving and changing policy area and one that is still lacking a number of clear details. A White Paper has been published which will help clarify a number of details regarding the make up, governance and roles of LEPs. This has been postponed until later this month (September 2010). Until then the Government is keen to engage with businesses and local authorities to help frame the structure of LEPs going forward. Initial proposals on LEPs have to be back with government by 6 September. Two hundred business leaders attended a Chamber event to discuss plans for a Greater Manchester Local Enterprise Partnership (LEP). To view a recording of the event click here

Announcement from Government

On 29 June Vince Cable and Eric Pickles - Secretaries of State at the Department for Business, Innovation and Skills (BIS) and the Department for Communities and Local Government (DCLG) respectively - issued a letter formally announcing the development of LEPs and outlining for the first time what their possible roles could be. A copy is attached as a pdf to this document.

It should be noted that this had been heavily trailed by various government departments and announcements. At the time of writing it is still not entirely clear which department is taking the lead on this though BIS seem to be taking primacy on key announcements and CLG having greater sway over content.

The Chamber will be monitoring the situation in relation to LEPs and will update this page as more information becomes available. In addition updates will appear on the Chamber's Blog www.gmchamberblog.co.uk

Effects and Implications

Regional

  • The North West Development Agency (NWDA) to be abolished over a period of time up to March 2012.
  • Likely to be replaced by seven or eight sub-regional LEPs.
  • The future of Government Office North West (GONW) will be reviewed though likely to be scrapped.
  • 4NW (north west local authorities leaders forum) funding has been stopped following the removal by the Government of the Regional Spatial Strategy. Discussions are currently ongoing into a residual regional level body to continue in a supervisory capacity and act as the "glue" between LEPs in the region and to effectively monitor residual regional level issues such as planning, major transport schemes eg Northern Hub etc. A trnsition team has been set up to look at how to make an effective transfer from the RDA to the new LEP structure.

Greater Manchester Combined Authority (GMCA)

  • Formal consultation ended regarding the proposals to set up a GMCA by April 2011. A combined authority will pull together local authorities' delivery of economic development and regeneration as well as set up a formal transport authority with increased statutory powers - all potential components in LEP delivery proposals.
  • Awaiting response to the consultation but is expected to get the go ahead by government.

LEPs

  • Government has said they will be private sector led and will be responsible for leading on local issues that promote economic growth including housing, planning, local transport and infrastructure, employment and enterprise and the transition to a low carbon economy. NB Full details are still to be confirmed.
  • Based on "functional economic areas" eg Greater Manchester.
  • There will be a Board to oversee the activity and whilst the steer from government is not to get too entrenched in the governance model it is an important part of the overall process.
  • Current proposals for a Greater Manchester LEP could result in all chairs of the Chamber and the Manchester Family (MIDAS,Marketing Manchester,Manchester Solutions & The Commission for the New Economy) working with corresponding AGMA representatives forming the Board.

Local Delivery Structures

  • Chief Executives from Greater Manchester Chamber of Commerce and Manchester Family in discussion about the future shape of delivery mechanism in light of new economic climate and resource reductions.
  • Discussions to look to retain key brands but to look for efficiencies and more co-ordinated working.

 Business Support Services and Business Link

  • Business Support Programmes used to be funded from DTI centrally usually via local Business Links. These programmes were transferred from DTI to RDAs around 2004. Business Link delivery was then regionalised in 2006 by the Northwest Development Agency (NWDA). We continued with a few programmes and especially UKTI to regional structures and programmes created by the NWDA.
  • NWDA delivery of these programmes has seen increasing expenditure. For GM Business Link has cost around £8m +ERDF of a further £4m or so per annum, for the information diagnosis and brokerage service only (IDB -essentially business engagement) and around £70m on business support programmes in GM alone (excluding grants to companies and business premises projects).Previously, during the period 2001 to 2006 our expenditure on all of this was between £21m and £28m. For example, the NWDA has increased expenditure over a number of years approximately threefold, although there as also some RDA expenditure at regional level before 2004.
  • The increased costs were caused by NWDAs desire to invest more in this area but also substantially by two policy changes which BERR (Department for Business, Enterprise and Regulatory Reform, formally DTI)/NWDA adopted .First BERR decided to separate IDB (Information, Diagnostic & Brokerage) ie business engagement/sales, from service delivery and this meant that business engagement became much more costly and less useful for businesses. It also meant that "Business Advisers " delivering the IDB service could not be used to deliver actual support, so this was contracted out to more expensive and separate consultants and other regional bodies. Second the NWDA regionalised the IDB service  and the programmes, which meant that the publicly funded support could not be integrated with GM Chamber/MS privately funded support. The Chamber/MS currently earns and spends around £12m on business engagement and support programmes which are not NWDA funded at all.
  • We are now likely to return largely to the pre-2004 position on programmes with contracts let by BIS (formally BERR/DTI). BIS has already said that these programmes will be run nationally. There are two ways that this could be done i) BIS could contract on a LEP area by area basis ii) BIS could let contracts nationally. We want the former and should lobby for this but there is a good chance that BIS will opt for the latter because it would involve fewer civil servants in the purchasing function and Government Offices (which were used in the past) would not be needed. We are therefore also instigating meetings and partnerships with large national players who we already have good relationships with. We also need BCC to become engaged and to form eg. partnerships nationally with large corporates.
  • We are currently reviewing business support programmes alongside our current offer with reference to what is necessary to deliver what the relevant parts of the Greater Manchester Strategy. Initial assessment indicate that this could be done for a much smaller public expenditure of somewhere between £2m and £4m per year for business engagement and around £20m for support programmes provided these services are all integrated (with the exception of business start up which can be subcontracted).
  • We think we can also deliver higher volumes of businesses assisted.We are able to move forward on business engagement and any of the above early in the transition process and this may be helpful to the NWDA and result in an easier transition for us.

  • Internationalisation (international trade and inward investment) is included above and is a key priority for GM and for the economic recovery and is delivered by BSS and MIDAS respectively. We have done much to link these two services already but we are in discussions on how they could be brought closer together.

Issues to Consider

  • Still not decided as regards local versus national functions eg internationalisation is a key Greater Manchester priority but current proposals are for this to be led centrally (trade, inward investment)
  • Important that as much is retained locally as possible and that Whitehall does not pull in all resources currently held by NWDA.
  • Whilst ideally the above issue should be resolved by ensuring local delivery if this is not possible the ability to locally manage central contracts must be an integral part of a Greater Manchester LEP.
  • LEPs must have powers and resources.
  • Any residual regional "group" must be a product of the LEPs and they should drive performance and activity not the other way round.
  • The building blocks for a Greater Manchester LEP are already well advanced and mature and should not be held back by the pace of slowest development nationally.
  • Chambers of Commerce are being promoted by government as being "ideal" partners in LEPs and representing the private sector.
  • Proposals to government by 6 September.