LEP funding should come from ministers say MPs
MINISTERS should consider funding local enterprise partnerships until they can support themselves, according to a new report from MPs.
The backbenchers also warn against a ‘fire sale’ of regional development agency assets that could be worth as much as £500m.
Ministers want to see the creation of a network of Local Enterprise Partnerships between local government and business to replace regional development agencies.
Plans for LEPs covering various parts of the West Midlands are among 24 to have been approved so far but major questions remain over how they will be funded and the powers they will wield.
The Government’s recent White Paper on local growth suggested that LEPs would have to fund themselves but the report published today by the Commons Business, Innovation and Skills Committee warns it will take time for this to be established and the private sector “might not be willing to stump up cash until LEPs have a track record of success”.
It also argues that the Government should set aside funds to retain RDA expertise by keeping them in post or transferring them to local enterprise partnerships.
The Coalition has also refused to guarantee that the proceeds from RDA assets will stay in their respective regions and suggested they could be used to help cut Government debts.
The report calls for the sale process to favour bidders who will benefit the local economy and for the publication of RDA wind-down plans.
Committee chairman and West Bromwich West MP Adrian Bailey said: “LEPs have the potential to kick-start local growth by concentrating on local areas. But at the moment they are an unproven innovation.
“To succeed, LEPs will need the powers and recognition required to give substance to their visions for turning local economies around. They must also overcome local rivalries and politics and collaborate with many partners for the benefit of the local area.
“Making this a reality will present substantial challenges to central and local government, LEPs and the business community, but the economic prize is too important for them not to meet those challenges head on.”
The report backs the idea of “regional groupings” in areas “where they have clear local business support”.
The Government intends to return many functions previously carried out by regional development agencies to Whitehall but the report urges the Government to devolve powers where there is evidence they have been used well at a local level.
While criticising the timetable for LEP bids as “less than perfect”, the report acknowledges that 24 have now been set up but recommends Ministers approve a second wave as soon as possible and provide additional resources to help areas that fail to meet the required standard.
