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Necessary steps for local economic recovery

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In the autumn of 2010, local authorities and business leaders submitted initial proposals for local enterprise partnerships (LEPs), intended to replace the regional development agencies.

According to the government’s local growth white paper, they would ‘bring together business and civic leaders to set the strategy, and take the decisions, that will allow their area to prosper’. Two years later, the national economic outlook remains bleak and the need for bold initiatives to drive growth has returned to the top of the political agenda.

It’s timely, therefore, that the APPG on local growth has this week published its first report considering the effectiveness to date of LEPs, and in doing so responded to Eric Pickles’ invitation in April 2012 to those driving growth on the ground to tell him “what you need to make progress”.

The inquiry, held over three months, heard from over 80 individuals and organisations including business leaders, LEP chairs, councils, skills bodies, government departments and senior civil servants. Despite the range of participants, and the diversity of LEP structures, resources and levels of progress, a clear consensus emerged that accelerating growth will depend on a genuine devolution of power and streamlining activities in Whitehall in support of these efforts.

The report sets out twelve clear recommendations addressing issues such as LEPs’ strategic focus, increasing engagement with local businesses, level of resourcing and connections with government and national policymaking. The report is also clear that all departments across Whitehall should be committed and signed up to local growth, and involve LEPs in setting the national economic agenda. However, two broad areas stood out where groups of local authorities and businesses working together should be allowed and supported to take the lead.

Particularly high on the agenda for LEPs, businesses, industry bodies and local authorities alike was employment and skills. Whilst many LEPs are already looking to build bridges between educational institutions and businesses, they are up against the fact that skills funding is allocated through a large number of disparate channels – particularly for youth provision – and seemingly with little reference to improving employability. LEPs reported minimal influence over the significant expenditure channelled through central programmes, such as the DWP’s Work Programme. With the right resources and influence, LEPs would be ideally placed to cut through the fragmented landscape of skills provision and help align local education and training with employers’ needs and future trends. 

The report also strongly recommends that that first wave of ‘city deals’, which have seen a transfer of powers, funding and discretion to English core cities, should be rolled out nationally as the vehicle for this empowerment of localities. The report found that LEPs and local partners are held back from strategising, influencing and investing by the centralisation of budgets and functions to organisations such as the Skills Funding Agency, Homes and Communities Agency and UK Trade and Investment, the confusing array of funding streams and the lack of locally-driven finance mechanisms. ‘Local growth deals’ could unlock the growth potential of areas outside the big cities where there are coherent economic clusters and strong governance partnerships between local authorities and across the public and private sector.

The recommendations set out in the report therefore provide a possible route map for the government in improving the structures and mechanisms needed to support and accelerate a locally led economic recovery.

Giles Roca, head of strategy at Westminster City Council

The report can be downloaded at www.appglocalgrowth.org

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