Local Enterprise Partnerships have been bolstered by a £12bn government fund. But concerns have been raised about their ability to drive economic growth.
A damning report published on 23 March by the National Audit Office accused the department for Communities and Local Government of failing to set LEPs quantifiable objectives for what they hope to achieve through growth deals.
England’s 39 LEPs were created in 2010 to replace regional development agencies.
It was estimated that the business-led partnerships between the private sector and local authorities could create 224,300 homes and up to 419,500 jobs, along with other gains.
However, LEPs have been held back by a lack of resources and rely on local authorities for access to skilled staff, according to the NAO study.
The government’s auditors found that only 5% of LEPs considered the resources available to them to be sufficient to meet the expectations placed on them by government.
In addition, 69% of LEPs reported that they did not have sufficient staff and 28% did not think their staff had sufficient skills.
The £12bn Local Growth Fund allocated for the period 2015-16 to 2020-21 is being distributed to LEPs through a series of growth deals, with allocations based on the strength of their strategic economic plans.
But the NAO found that the CLG had not set specific, quantifiable objectives for what it hoped to achieve through growth deals, therefore it would be difficult to assess how they have fostered economic growth.
A CLG spokesman said: “This report misses the point. The government is pushing forward an ambitious devolution agenda, with the most significant transfer of powers out of Whitehall to local places for a generation.”
LEPs have become a linchpin of the government’s devolution mission to distribute wealth and power more evenly across the UK, and the agenda has received cross-party support.
But there should be more accountability and transparency within the partnerships, after the NAO found that 87% of LEPs were unable to reveal information on senior staff remuneration from publicly available accounts and 42% of LEPs said they did not publish a register of interests.
The report also found that pressure on LEPs to spend their local growth fund allocation in a year created a risk that LEPs would not fund those projects most suited to long-term economic development.
However, LEPs remain optimistic about their ability to drive economic growth.
A Buckinghamshire & Thames Valley LEP spokesman said: “We have secured funding to develop the infrastructure needed to help our businesses and communities thrive and we have been instrumental in securing the business growth of iconic sites such as Silverstone and Pinewood.
“Our growth hub is supported by 7,500 businesses and we have secured enterprise zone status for three sites in the county, which together will create 8,000 jobs and open up 237 acres of prime employment land.”
So how can LEPs improve?
The Buckinghamshire & Thames Valley LEP spokesman said the priority for LEPs was to collaborate more with each other in the context of an “ever-devolving national landscape”.
Guy Butler, co-founder of Manchester-based developer Glenbrook Property and chairman of the Chester Growth Partnership, said LEPs needed to make greater private sector involvement a priority.
“The LEPs have the same funding as the RDAs but 10% of the resources, so they are reliant on the private sector,” he said.
“They tend to have prominent chief executives higher up in the LEPs but it would be good to get more bright young things, who have more time, involved.”
Andrew Carter, deputy chief executive of think-tank Centre for Cities, said some LEPs had taken on too much responsibility for delivering economic growth themselves.
They should “return to their original purpose of setting economic priorities for their areas, and ensuring that local politicians stay focused on them.”
As the government continues to pump money into LEPs, more clarity is needed about what they are trying to achieve, along with more scrutiny to ensure they deliver on their growth-driving promises.
LEPs’ financial muscle
- LEP funding 2010-2015: £1.5bn
- LEP forecast funding 2016-2021: £12bn
- Private-sector leverage secured by LEPs since 2010: £5bn
- Largest growth deal awarded to a single LEP, Leeds City Region: £627.5m
- Range of private sector board membership in LEPs: 45% to 80%
- LEP 2010-15 achievements: Built 16,000 homes and spent £945m on infrastructure
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