Heseltine launches LEP pilot scheme in Birmingham

LOCAL Enterprise Partnerships must take on an expanded role with greatly enhanced powers if they are to be the successful engines of economic development, Lord Heseltine has said.

The extended role for the partnerships was first proposed by the former Deputy Prime Minister last year with the publication of his No Stone Unturned economic review.

The review contained recommendations on how devolved powers should be allocated to the regions so they could determine their own economic agendas free from interference by central Government and with the LEPs spearheading policy.

Birmingham has been selected to develop a pilot project on how the bold new plan might be implemented. The city has been given three months to develop a blueprint for change which will then be submitted to the Government for consideration. Lord Heseltine has agreed, with the Prime Minister’s blessing, to work with officials in Birmingham on the project.

If the measures are adopted then the model could be rolled out across England for all LEPs to follow.

Speaking at the launch of the pilot project, Lord Heseltine said: “The strength of the local economy is key. We have to put together something that will excite the Government.

“I have only one interest and that is to make sure of the success of the local agenda. I will bring in the outside perspective; I will be asking the difficult questions. I will turn the spotlight on performance and sometimes that will be uncomfortable. It is totally unacceptable to have failing standards of housing, skills and education.

“Birmingham has volunteered to create a model that the whole of England can follow but the only way for this to endure is to make it work and return power to the people who create the success in the first place.”

Exactly how the project will be structured is still under development. The scheme is being helmed by Steve Hollis, the outgoing Midlands chairman of KPMG and the deputy chairman of the Greater Birmingham and Solihull LEP.

The plan will also see a series of steering groups established to oversee the direction of the project. Stakeholders from the education sector, local authorities and the business community will also be involved. A number of work streams are being developed and these will reflect the content of the review.  Meriden MP Caroline Spelman and MEP Philip Bennion are also part of the team.

Lord Heseltine’s review proposed the LEPs be given greater powers to develop their own tailored local economic plans. From 2015-16 they would compete for a share of a single national funding pot to support growth over a five year period.

Under the current spending review this would account for £49bn of central public spending on skills, local infrastructure, employment support, housing, business support services and innovation. This would be supplemented by approximately £9bn of European common strategic framework funds.

Once an LEP has been allocated funds it should be free to implement its strategy, accountable to its local community but free from central Government diktat. The process will be flexible to take account of changing economic trends and the plans will be open to constant reappraisal to ensure they continue to meet the required goals.

Lord Heseltine said the LEPs had to be able to able to respond to economic shocks or opportunities which might arise within their area.

However, he said that at present LEPs did not have the power or funding necessary to deliver such economic change. He said the partnerships had to work with a coalition of local stakeholders to successfully bid to central Government for funding.

The GBSLEP has said that with access to the single pot and devolved powers it would be capable of achieving far more than was currently the case.

The area already has the largest city centre Enterprise Zone and a wide ranging City Deal aimed at creating 50,000 jobs over the next five years.

However, it said the greater funding and powers would enable it to maximise the impact of major transport projects such as HS2, overcome the challenges of housing growth, build on the successes of the automotive sector and stimulate inward investment.

GBSLEP chairman Andy Street said: “This is about challenge and opportunity. We have to make a compelling offer to the Government so it has no choice but to agree.”