Ernst & Young Column: Can LEPS deliver?
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Stephen Church
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By Stephen Church, partner at Ernst & Young REGARDLESS of December’s heavy snowfall, the recent GDP figures underlined the fragility of the UK economy. Much now depends on Local Enterprise Partnerships and their ability to set local economic priorities and help drive economic growth and the creation of local jobs. Can they deliver? “Government is offering local areas the opportunity to take control of their future economic development.” At least, that’s the ambition underpinning the creation of Local Enterprise Partnerships (LEPs), announced by the Coalition Government shortly after its formation. The creation of the LEPs, which are replacing the network of Regional Development Agencies (RDAs) set up by Labour, has not proved uncontroversial. The decision to abolish the RDAs prompted much concern amongst business – a somewhat ironic turn of events given the fact they hardly garnered universal support from corporate leaders during their existence. Nevertheless, on this policy anyway, the Coalition is not for turning. In its vision, by March 2012, the LEP network will be fully up and running, with business and civic leaders working together to provide locally-based economic support. Localism in action, then, with government interaction restricted to areas such as bidding directly for payments from the £1bn available in the Regional Growth Fund. So far, some 35 LEPs have been sanctioned and are now being established across England. But clearly, for the Coalition’s vision to become reality, the basic fundamentals must be in place. For starters, they need to attract a strong level of engagement from across the business community in which they operate. High-calibre individuals and businesses need to articulate what needs to be done to drive growth in their local area, communities and neighbourhoods. For this to happen, business needs to be fully convinced of the merits of the LEP structure and design. The onus is on LEPs to demonstrate how critical they are to the local, and therefore the UK’s, growth agenda, and what powers they will have to catalyse the economies in which they operate. Second, LEPs need to grip local issues without being overwhelmed by overheads and bureaucracy – a charge often levelled at their RDA predecessors. By being nimble and fleet of foot, they stand a greater chance of success, particularly as no central funding is available; the £2.9 billion per year previously allocated to RDAs was earmarked as one of the necessary savings in the Spending Review. LEPs will therefore have to work hard to influence their local economies and only present cases that are compelling to growth as well as being able to source public and private investment. So while sound business planning is the first step towards a successful implementation of this new structure, the jury’s out on whether LEPs will actually succeed in promoting economic growth. Given the ongoing fragility of the economy, as well as the depth of the public sector cuts still to come – particularly in areas outside of London – a formidable task awaits them. Only time will tell if they have sufficient leadership, guile and resources to prosper. More articles in
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