Boris Johnson faces a battle over plans to create a new London-wide local enterprise partnership to replace the London Development Agency with boroughs favouring their own local intra-London economic development plans.
As first revealed in LGC, a number of London boroughs came together to submit bids to form new local enterprise partnerships (LEPs) within the capital before the initial deadline to submit bids of 6 September. Bids comprising partnerships covering the east, north, west and south of London were submitted ahead of the deadline.
However, these bids were put on ice with ministers moving to consult the Mayor of London before making decisions. Subsequently, ministers wrote to the Mayor and London council leaders formally inviting them to submit bids for LEPs in the capital, with a deadline of 5 November.
That deadline has now been extended until 19 November, the Department for Business, Innovation & Skills confirmed, to allow time for the Greater London Authority to submit a LEP bid covering the whole of Greater London.
But a source close to the negotiations told LGC that boroughs were “not keen” on the Mayor’s plan. The source said that initially Mr Johnson “could not see the point” of LEPs in London, as the mayor had the London Development Agency, which although earmarked for abolition was going to be rolled into the GLA as an economic development directorate.
“But when the LDAs budget was cut in the CSR, Boris began to see a LEP as the only way to get any economic development funding,” the source added.
Like other regional development agencies around the country, the LDA’s CSR settlement is set only to cover the agency’s contractual commitments and operational and closure costs over the period to March 2012. But Treasury has yet to confirm whether the GLA will get any further economic development funding on top of what has been allocated to wind down the LDAs commitments.
“All of a sudden it seemed to Boris that there may not be any economic development cash coming his way and it looked like LEPs were the only game in town. Hence his late conversion,” the source told LGC.
Speaking yesterday at a London Development Agency meeting , Mr Johnson said ministers remained “absolutely committed” to creating an economic development arm for the GLA, with a single funding pot for economic development. He said this could take the form a single LEP for London, although he admitted there was an “obvious” case to be made for a LEP covering the Thames Gateway.
But the Mayor warned against creating a number of LEPs within the capital as this could lead to a “confusing and complicated Venn diagram of sub-regions”.
But London councils that have submitted their own LEP bids are pushing back against the Mayor’s plans.
Speaking at the London Councils summit on 6 November, Edward Lister, the Conservative leader of Wandsworth LBC, which is part of a LEP bid covering six boroughs in south London, said there was “an assumption by this mayor and the previous mayor that they know best about economic development”.
He said: “There is this view that it’s something the boroughs should not be getting involved with. But we are of the view that economic development is best delivered at the local level. We know our local economies best.”
Cllr Lister said Wandsworth would be pressing ahead with its LEP bid, although admitted that with no dedicated funding on offer for LEPs there was “an element of two bald men fighting over a comb over the bids.”
Speaking at the same event, Claire Kober, Labour leader of Haringey LBC reiterated Cllr Lister’s position, saying Haringey would also push ahead with its own LEP bid, which covers around eight boroughs in north London.
LGC understands negotiations over the future of economic development will hinge on how the Mayor can incorporate the desire of the boroughs to retain some control over economic development in their patch within the overall structure of a London-wide LEP.
“It will be about putting together a kind of two-tier LEP arrangement - of sub-regions within the London region - that give boroughs some autonomy,” the source told LGC.
Proposed Greater London LEPs
*Denotes boroughs that a part of two bids.
- Hammersmith & Fulham
- Waltham Forest*
- Barking & Dagenham Bexley
- Tower Hamlets
- Waltham Forest*
NB: Also includes Dartford and Thurrock beyond Greater London.
- City of London
- Kensington and Chelsea
- Kingston upon Thames
- Croydon (NB: Also part of the successful first wave Coast to Capital LEP bid)