Local Enterprise Partnerships (LEPs) could boost English growth figures by £144bn by 2020 if handed greater powers and funding from Whitehall, a new report from a leading think tank suggests.
Based on a survey of leading LEP stakeholders, Localis has projected a £143.9bn potential uplift in Gross Value Added (GVA) if LEPs are given the powers and funds that they have requested from central government – a 9% increase on predictions for 2020 GVA if present funding powers are maintained.
Alex Thomson, chief executive of Localis said: ‘The key finding of the report is that LEPs need to remain nimble and unbureaucratic, while retaining their crucial strategic input into local economies. Our research shows that they have the potential to make a massive impact on our national economy in the next parliament if they get the devolution they’re looking for.’
Among the range of devolution suggestions, the think tank calls for annual funding to increase to £12bn, representing a massive expansion on the initial £12bn Local Growth Fund – designed to provide £2bn a year from 2015 to 2016.
As part of this increase LEPs should be in line for an extra £1.1bn a year in transport funding if they perform to desired standards, according to the report entitled The Next LEPs: Unlocking growth across all our localities.
‘The Government should evaluate the effectiveness of the 2015/16 Local Growth Fund, and if it is achieving its goals, an additional annual £1.1bn of transport spending should be devolved down to LEPs,’ it states.
However the extra funding should be characterised by a ‘dual lock’ approach that would see both council leaders and the LEPs signing off on annual budgets to ensure LEPs ‘continue to play a strategic role while maintaining local government’s democratic importance’. Such a system is already used in Greater Manchester.
Mr Thompson explained to Transport Network that the dual lock would only apply to spending on money that came straight from central government such as the Local Growth Fund cash.
He added the system could work in two ways, firstly if the LEP and the council could not decide on their spending plans then the government could refuse to devolve any cash or secondly the LEP could only recieve funding for the plans that had been signed off by both the LEP and the relevant local authorities.
It also calls for LEPs to publish regular and transparent accounts, minutes of their meetings and board member email addresses, and be made subject to the Freedom of Information Act.
Transport Network has exclusively reported on the Government's failures to provide promised accountability controls for LEPs.
Other democratic reforms suggested by the report include allowing councils to propose a directly-elected LEP chair should ‘authorities representing 50% of local business rate-payers agree’ and for trade union representatives to be on the boards of LEPs as well a representative from at least one local business body such as the Chambers of Commerce.
In a direct rejection of recent calls from communities secretary Eric Pickles, the think tank does not outrightly call for any major reforms to the number or nature of LEPs and their boundaries.
‘To avoid impeding this maturing process, we do not propose a wholesale change to LEPs’ geography. While there are certainly some LEPs whose boundaries seem to create conflict between political variables and economic functionality, it was evident that there is no appetite from the ground up for a redrawing of the boundaries. Rather, we believe that partnership working between LEPs – of which many have a good record – will deliver more in shorter order and thus should be prioritised,’ the report states.
It also highlights that around £18.5bn of funds have already been allocated and provisionally allocated to LEPs since 2011. On top of the Local Growth Fund this includes cash from the European Regional Development Fund, the European Social Fund, a percentage of the European Agricultural Fund for rural development, and further central government allocations from the likes of the Regional Growth Fund, the Growing Places Fund.