The strategies of local enterprise partnerships for spending a multi-billion pound European growth fund are too “generic” and must be made more “distinctive to local areas”, senior government officials have demanded.
The measure is one of several changes LEP chairs have been told to make to their plans for using England’s £5.3bn allocation from the European Structural and Investment Fund. The plans were submitted in January.
The changes are outlined in a letter to LEP chairs from senior officials from the Department for Business, Innovation and Skills and the Department for Communities & Local Government which was leaked to LGC. It also demanded better collaboration between different LEP areas and the need to make sure local plans did not “contradict national policy”.
The letter, sent last week, said: “Activities proposed for SME competitiveness, employment, social inclusion [and] skills sometimes lack detail and come across as generic and not distinctive to local areas.”
It said that, with some exceptions, there was “not much evidence of plans for collaboration across LEP areas and/or overlapping LEP areas” in the January submissions.
The letter, from BIS director general for business and local growth Bernadette Kelly and DCLG director of European programmes Julia Sweeney, acknowledged that the LEPs’ plans had “improved considerably” from draft versions submitted in October. However, it also raised a series of issues:
- Some areas had only considered climate change “in relation to flood risk”
- More work was needed to provide evidence that rural needs were addressed
- LEPs must do more to show how they were applying “sustainable development principles” to their plans
- In some cases areas must demonstrate that their plans on skills would not “duplicate or cut across” national policy
- Some strategies had not allocated enough funding to low carbon plans and social inclusion
- Match funding proposals were “not always robust”.
LGC understands some recipients viewed the guidance as a supportive gesture to help them improve the quality of their plans, particularly because many LEPs are relatively young organisations with little experience of bidding for European funds. However, others were frustrated by its suggestions.
A source involved in a large city LEP told LGC: “Despite being told that LEPs are the strategic drivers of growth, it still feels as if the national trumps the local because we’re being told by central government they don’t want us to use European money for what our businesses have told us they want.”
The source said his LEP had planned to use some funding to support high-level skills programmes, because businesses wanted to recruit people with specialist training, but that the government had rejected this because it did not fit with a national strategy.
A southern LEP source said it was difficult to design plans that were locally distinctive. “Geographically we’re not that far away from our neighbouring LEPs, and there are challenges we share, so it’s not surprising if we’ve both included things such as broadband and access to finance in our plans,” he said.
But another officer involved with LEPs said there were ways for the bodies to meet the requirements.
“It’s generic to say that SMEs need access to finance,” he said. “What the government is looking for from the LEPs is something more specific, so for instance you could be proposing an equity tool because your businesses particularly need equity finance.”
The letter also confirmed that the government was “re-taking the allocation decisions” about how much money each LEP area would receive from the European pot, following a legal challenge by the Sheffield and Liverpool city regions. Last month a judge ruled that BIS had failed to consider the public sector equality duty when it made the allocations.
Alex Pratt, chair of the Buckinghamshire Thames Valley LEP, said the change could lead to delays in the process for areas receiving funds. “At this late stage any uncertainty is unhelpful,” he said.
The £5.3bn European fund covers the 2014-20 period. The government’s letter said the suggested changes would need to be addressed by the end of May.