While many in the local government community view plans to hand local enterprise partnerships (alongside mayors) control of local industrial strategies as “incomprehensible”, from a business perspective, faced with the alternative, it would be incomprehensible not to.
The alternative – letting local authorities lead – is not palatable for businesses for a number of reasons.
First, England’s 200-plus non-metro district councils, with their responsibilities for core areas such as planning, local roads and business rates collection, do not map onto functional economic geographies; LEPs do.
An industrial strategy fails to be effective if subdivided into hundreds of units and businesses will feel the low impact of action as a result of this subdivision. This is one of the reasons why we have been strong supporters of proposals for local government reform to increase the number of unitary councils.
Second, in our most recent survey of members we found the majority of manufacturers (two in three) agreed with the statement “local authorities are not working together enough to boost economic growth” while half say “LEPs have an important role in bringing together businesses and decision makers to focus strategically on growth”.
While LEPs have been called out for issues with delivery, manufacturers still see them as core to the role they were set up to do: strategic economic development across functional economic areas.
But this isn’t to say that view will always remain. As more and more decisions that shape places start to take place at the local level, there will need to be a stepping up in regional democratic accountability to manage the trade-offs between winners and losers. LEPs don’t have this and are unlikely to ever achieve this, but neither does a ward councillor; that is where mayors and unitary authorities come in.
Councils that are genuinely interested in the gains to be had from local industrial strategies have over a year to redouble their efforts in getting mayoral devolution deals signed with the government.
The business community will be pushing the government where we can to make sure it doesn’t delay on its side of the bargain, as we are already doing on the need for mayoral infrastructure levy plans to be reintroduced, as well as urging the publication of the promised devolution framework to provide clarity to local government about what is on offer.
But as the debate continues, the government’s decision to put LEPs in the driving seat in areas without devolution deals is a reminder, if ever it was needed, that involving businesses is important. After all, they are the ones who will pay the taxes, create the jobs and provide the economic growth that will deliver the ultimate outcomes of the industrial strategy: higher living standards and lower public sector expenditure through higher levels of productivity.
Chris Richards, head of business environment policy, EEF