Local enterprise partnerships will need to gain powers over some council policies, a parliamentary report has said.
MPs on the Business, Innovation and Skills Committee said LEPs could fail unless they had “clear powers to influence and determine local authority policy”.
They said this should be done through a memorandum of understanding between each LEP and its partner councils.
Without these powers LEPs would “risk being nothing more than talking shops”. The report also called on all Whitehall departments to devolve powers to LEPs where needed.
It said there had been “no division of opinion [among witnesses] on the need for LEPs to be given the power and recognition they need to do their job, both in terms of downward devolution of power from Whitehall and in determining local authority policy”.
The MPs said government resources would be needed to ensure that expertise and property held by the regional development agencies was not lost as they are wound down, because this would hamper LEPs’ effectiveness.
Government should pay to retain RDA expertise “if necessary by providing proportionate incentives for an adequate number of RDA staff to remain in post”.
RDA assets should not be subject to a ‘fire sale’ while land prices are depressed and if land and buildings were sold “the government should favour bidders who can demonstrate that their proposed use of the relevant asset will benefit the local economy”, the report said.
LEPs would need time to develop funding streams for their day-to-day operations and the government should be willing pay for this initially to avoid any funding gap arising.
The MPs feared that without reliable funding streams the LEPs – at present 24 but likely to rise to around 40 – could not punch their weight against publically-funded development bodies in Scotland and Wales.