A wide-ranging delegation of town hall and business leaders has told ministers they must not centralise key economic development functions in Whitehall when the regional development agencies are scrapped, LGC has been told.
At a meeting between business minister Mark Prisk, who holds the regional and local economic development brief, decentralisation minister Greg Clark, and a range of town hall leaders and business chiefs, the ministers were told that scrapping the RDAs must not precipitate a move to claw back some the agencies key functions.
In a letter to business and council leaders last month, communities secretary Eric Pickles and business secretary Vince Cable, said they expected new Local Enterprise Partnerships — council and business-led sub regional partnerships aimed at boosting economic growth - to assume control of functions such as such as housing and planning, local transport and infrastructure priorities, employment and enterprise and the transition to the low carbon economy.
But the letter added that some RDA functions, such as venture capital, business support, inward investment and support for key growth sectors, would be best undertaken at the national level.
Sources who attended the meeting, which was held to discuss the formation of LEPs, said the ministers were told that centralising responsibility for inward investment, business support, and leadership on key growth sectors - would be detrimental to the government’s stated aim of rebalancing the UK economy.
This month Mr Cable said that if LEPs want to take on responsibility for more of the RDAs powers, as does Greater Manchester, for example, then they can “make the case” to do so and they will be listened to - and LGC was told this was also “very much” the tone of the meeting.
“It was a high level discussion, without going into a great deal of detail, but the message was very much ‘make the case’ - make an evidenced based case for what it is you want to do and that will be considered,” one source at the meeting said.
LGC was told that, while overall the meeting was “very positive”, other concerns raised included whether regions could retain some form of residual regional body to focus on high level strategic issues - such as inward investment - as well as concerns about the Department for Work and Pensions’ new single Work Programme, which delegates said seemed to involve centralising employment programmes.
“There are concerns that employment and skills - two key economic development functions that cities want more control over - are being centralised, against the grain of a lot of what the government is trying to do,” a source said.
Following the meeting, Mr Prisk said the government wanted to put in place a “bottom up” approach to economic development.
He said: “It’s crucial that local authorities and business work hand-in-hand to establish proposals for enterprise partnerships. Together they have the insight and understanding to set out a vision for a strong local economic future, and then decide what structures can best achieve that vision.”