Heseltine focused on giving LEPs more power

LOCAL Enterprise Partnerships must have a wider role and be handed 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.”

The pilot 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.
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.