Government confirms axe for Local Enterprise Partnerships

Levelling Up Minister Dehenna Davidson has written to the boards of the remaining Local Enterprise Partnerships confirming that funding for Local Enterprise Partnerships (LEPs) will end from April 2024 and strategic economic planning will transfer to councils and Combined Authorities.

In the letter seen by TheBusinessDesk.com the Government claim an information gathering exercise identified “overlap between some of the functions being discharged by LEPs, local authorities and combined authorities”.

The Government confirms it will provide “some revenue funding to local and combined authorities” but is vague on the details.

It even encourages the successor bodies to involve specific named business representative organisations, “such as a local Chamber of Commerce, the Federation of Small Businesses”. It also suggests a designated Employer Representative Body (ERB) develops the Local Skills Improvement Plan (LSIP).

“The Government remains committed to our goal that by 2030, every area in England that wants a devolution deal will have one. By empowering local democratically elected leaders to deliver these key local growth functions from April 2024, we are accelerating the integration process set out in the Levelling Up White Paper.” 

An accompanying paper on transferring functions itemises each area, such as Growth Hubs, Towns Funds, and the remaining projects covered by the European Structural and Investment Funds – European Regional Development Fund (ERDF) and European Social Fund (ESF).

In March Greater Manchester’s economic strategy begun the process of being driven by a new Business Board, that looks remarkably like the Local Enterprise Partnership in composition.

The changes to local economic strategy were outlined in Jeremy Hunt’s deeper devo announcement as part of the Spring Budget.

But it is in non-Combined Authority areas that the LEP structures will be most missed.

Government has also recommended that LEPs and local authorities seek their own legal advice on issues related to staff redundancies and TUPE to any new entities and that directors seek their own legal advice regarding personal liabilities.

Debbie Francis OBE, Chair of the Lancashire Enterprise Partnership, said: “While the Government’s decision to cease the funding of Local Enterprise Partnerships from April 2024 is disappointing, the need for business collaboration with local authorities remains crucial to enable the delivery of economic growth and prosperity in Lancashire. 

“The business community’s sector-specific and unique industry insights will help to ensure investment and policy interventions will have maximum impact which will benefit both residents and businesses as Lancashire realises its economic growth ambitions.

“As such, we are working closely with our public and private sector partners to ensure there remains a strong business voice, which builds on the LEP’s significant expertise, experience, and legacy, that will help inform Lancashire’s future economic strategy.”

Small firms’ champion, the Blackpool-based Federation of Small Businesses (FSB), said SME support must not be left to fall through the cracks following decision to remove funding for Local Enterprise Partnerships

FSB national chair, Martin McTague, said: “Even though we knew this was on the horizon, the decision to remove all funding from LEPs is still disappointing.

Martin McTague

“With economic growth stuck in the doldrums and small firms beset on all sides by cost pressures and falling demand, going ahead with this decision seems especially badly timed.

“LEPs are a key ingredient in many local business ecosystems, providing resources, know-how, and practical solutions to small firms. The value they provide in return for their funding should not be underestimated, and the loss of the networks they facilitate will only become clear when it’s too late to replace them.”

He added: “A key characteristic of LEPs is that they are business-led. Local authorities should make sure that any business forum or council they set up using replacement funds from government retain that element, so that they are as responsive as possible to what local firms want and need.

“The Government should now publish an updated regional economic strategy detailing how small business voices will be included in future plans, and also how it plans to avoid small and rural town funding being dominated by local combined authorities, to the detriment of small firms based in rural settings.

“Access to support should be straightforward for all small businesses, so they can be helped to reach their full potential – something the economy desperately needs.”

Clare Hayward, chair of the NP11 group of Northern LEPs and the Cheshire and Warrington LEP added: “We are keen for the Government to accelerate conversations with those parts of the North currently without a devolution deal to ensure all parts of our region can benefit from enhanced local decision-making and investment.”