Video roundtable: ‘LEPs offer real opportunity’
INNOVATION, and partnership will be vital if Manchester and the wider region are to thrive in the next few years. This is view of senior business leaders at a roundtable event hosted by TheBusinessDesk.com, in association with business advisers Ernst & Young and law firm DLA Piper.
It brought together an expert panel to debate how the region can move forward with Local Enterprise Partnerships (LEPs), the new bodies which are being introduced by the Government to replace the regional development agencies.
The panel featured: Clive Memmott, chief executive, Greater Manchester Chamber of Commerce; Felicity Goodey, chairman, Central Salford URC; Nathan Marsh, director, Ernst & Young; Nick Helm, partner, DLA Piper ; Peter Nears, strategic planning director at Peel Holdings; Stephen Church, partner, Ernst & Young; Sir Howard Bernstein, chief executive, Manchester City Council and Chris Bowes, partner at DLA Piper.
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Five LEPS, which should be up and running in April, have been confirmed for the North West in Greater Manchester, Merseyside, Cheshire, Warrington and Cumbria. Lancashire’s politicians submitted three separate bids and were told to go back to the drawing board.
Those that have been given the green light will not receive any cash but will be expected to bid for funds from the £1.4bn, three-year Regional Growth Fund and lever in investment from other sources.
Felicity Goodey, who will sit on the independent advisory board of the Regional Growth Fund, admitted money would be tight: “The funds on offer are not huge so they will have to work extremely hard,” she said.
“Gone are the days when lashings of money were spread around. We’ll have to work extremely hard to lever in as much from the private sector as possible.”
However she expects Manchester to be in an “extremely good position” because of the city’s history of using public cash to attract private investment.
She added: “It’s an opportunity but we should understand the nature of the opportunity. A crisis is always an opportunity. It forces you to think and act differently.”
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Peter Nears warned that the LEPs should not rely on the Regional Growth Fund for cash. “If everyone’s relying in the RGF it’s going to be pretty tough. It’s a question of how it can be aligned with private sources of funding which are attractive to the market.”
The chief executive of Manchester City Council Sir Howard Bernstein admitted a different approach would be needed. “Gap financing is not the name of the game anymore. We’ve got to find smarter ways of doing that.
“We have to think about how we connect the market place to inherently viable projects. What we’ve got to be now is enablers and facilitators. We’ve got to look at how we can develop investment capacity.”
He pointed to the potential from the re-localisation of business rates, and the opportunities offered by Tax Increment Financing (TIF) which will allow local authorities to borrow money from the Treasury to fund infrastructure and capital projects. The money will then be repaid from the future business rates raised from the developed projects.
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E&Y’s Stephen Church stressed there were “incredibly strong powers” that could come together under the umbrella of the LEP while Peter Nears said the private sector must step up. “The crucial role for the LEP is to enable and help the private sector to pick up that challenge. There’s no reason it should fail. There’s no reason why we can’t all pick up the ball and take it forward. We’re quite positive about it.”
Clive Memmott added: “It’s about enterprise and jobs and growth and the LEP itself can give strategic direction and help prioritise investment decisions.”
The panel agreed that LEPs would often work together to create critical mass and introduce influential projects. “Large scale economic activity doesn’t always obey geographical boundaries,” said Nathan Marsh.
A good example of this is Peel Holdings’ Atlantic Gateway scheme – an ambitious development from Manchester to Liverpool along the Manchester Ship Canal and the River Mersey – which would cross the boundaries of three LEPs. And Sir Howard said he would like to see the LEP evolving to work with the areas outside Greater Manchester that also provide its labour force, like Cheshire, Lancashire and areas of Yorkshire.
But Sir Howard said there was a “tension” in the Government’s narrative about the Regional Growth Fund driving private sector employment and compensating those places that will lose public sector jobs.
“The places that are going to drive private sector jobs are places like Manchester. You’ve got to be backing success otherwise you will not be creating the jobs we need.”
He added: “Decisions must be made on the basis of delivering growth rather than spreading the jam. What we need to see is real rigour in the way proposals are evaluated.”
While the general tone of the discussion was positive two advisers sounded a note of caution.
DLA Piper’s Chris Bowes was worried that other areas that do not have Manchester’s infrastructure and investment framework could fall behind. “Where local regions are competing to win these big investments there’s a risk that areas that don’t have the infrastructure in place will get worse.”
His colleague Nick Helm added: “Competition between the LEPs needs to be controlled.”
