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Cable 'open minded' on councils taking on more RDA powers

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Vince Cable has left the door ajar for new council and business led economic development partnerships to bid for inward investment, innovation and other functions that ministers had indicated would be repatriated from the regional development agencies to the national level.

Speaking at his first appearance before the Business, Innovation and Skills select committee, Mr Cable, the business secretary, said the government had not been “rigidly prescriptive” in setting out plans for new Local Enterprise Partnerships (LEPs) - council and business-led partnerships that will drive economic development over sub-regions - because ministers wanted the new bodies to emerge from the “bottom up”.

He added the parameters for the LEPs set out in a letter to business and local authority leaders, signed by Mr Cable and communities secretary Eric Pickles, could be adjusted based on the proposals put forward by councils and their partners. This could include areas the letter stated would be repatriated from the regional development agencies to the national level, including leadership on inward investment, innovation and support for emerging sectors.

Mr Cable said: “We’re not being rigidly prescriptive about the functions these bodies should have. If a case is made for doing things through a LEP we will listen to that.”

But Mr Cable said venture capital would be best delivered through a nationally led enterprise capital fund, rather than through multiple regional or local venture capital initiatives.

Mr Cable’s openness to proposals from LEPs to take on more of the RDAs functions came as a relief in the north of England, where there has been real concern that by repatriating inward investment to Whitehall, the north would lose out to the greater south-east. “There was a feeling that BIS had decided to take the RDAs toys home because they’d lost the argument about keeping the agencies in north,” one Leeds City Region insider said.

The source added the city region leaders had since been reassured by BIS that if they were to make a strong case that the LEP could lead on inward investment, innovation and sector suport they would be devolved.

LGC understands that both Greater Manchester and Leeds plan to put forward proposals to lead on inward investment, innovation and support for emerging sectors, while in the north-east inward investment, in particular, was considered a vital part of One North East’s remit and leaders would like a potential regional LEP to continue that role.

In a pamphlet published by BIS to coincide with Mr Cable’s first appearance before the select committee, the department said the sub-national growth white paper, due this summer, would develop further proposals for LEPs.

The pamphlet, called A Strategy for Sustainable Growth, said the department envisaged an LEP to be a “key tool in helping areas to create a supportive environment for business growth and private sector job creation, by tackling local market failures which are holding back growth at this level”.

The pamphlet added that the white paper would also set out the government’s plans to improve incentives for local economic development, as well as proposals to increase the ability of the planning system to support investment and growth and the operation of the Regional Growth Fund - a £1bn fund to support private sector growth in regions heavily dependent on public sector employment that was announced in the June budget.

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