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Slow start for regions

Business secretary Vince Cable this week confirmed the first 24 local enterprise partnerships (LEPs) that will go ahead in the first wave of government plans to devolve economic development powers.

But, a total of 62 LEPs had made bids for approval, so a significant number will have to wait to see if they will get the green light in future.
Much of Lancashire, the North East, East Anglia, North Yorkshire, the West Midlands and Dorset and Devon in the South West have been left without LEPs.

Decentralisation minister Greg Clark said more LEPs could be established in future if revised or new bids are submitted.
“For those proposals that did not quite make it this time – we hope that they will draw inspiration from what is possible, and we will continue to support them as they refine their plans,” he said.

“Don’t get left behind”

A spokesman for England’s Regional Development Agencies (RDAs), which are being replaced by LEPS, said some bids were rejected because they had failed to involved the business community enough, or because they overlapped with other LEPs.

He said that areas not covered by the approved LEPs could suffer if revised bids failed.

“If local authorities that are in the gaps don’t get their act together they’re going to get left behind,” he said. “Those gaps will probably start to be closed before the end of the year, but only if local authorities talk to each other.”

The Forum of Private Business (FPB) urged the government to advise the proposed partnerships that need to re-bid.

In its local growth White Paper, the government failed to explicitly define the roles and powers of LEPs, saying it does not intend to define them in legislation.

“Partnerships will differ across the country in both form and functions,” says the paper. “The constitution and legal status of each partnership will be a matter for the partners, informed by the activities that they wish to pursue.”

It also set out possible roles that LEPs might take on, including

  • working with the government to set out key investment priorities, including transport infrastructure and supporting project delivery
  • coordinating proposals/bids for the new Regional Growth Fund
  • making representations on the development of national planning policy
  • coordinating approaches to leveraging funding from the private sector

Ministers also declared the £1.4bn Regional Growth Fund open for business. But in the debate following the announcement, the government was accused of slashing funding for regional growth.

Cable said the £1.4bn would be available over the next three years “to encourage private sector investment across England, providing support with significant potential for private sector led economic growth and sustainable employment”.

Shadow business secretary John Denham said the new regional development plan was a “shambles” and the result of “reckless” cuts.

“This statement cuts the resources for regional development by at least two thirds,” he said, adding a damning suggestion that it is “a pathetic fig leaf to cover the absence of any growth strategy”.

The FPB also warned against the possible abuse of tax increment financing by local authorities. FPB chief executive Phil Orford said:

“With local authorities soon being able to borrow against future business rate increases, they may find it tempting to hike rates in order to borrow more, so this is certainly something which needs to be monitored and policed very closely.”

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