Heseltine adds to confusion over Local Enterprise Partnerships

Kevin Meagher examines the confusion over the funding behind local enterprise partnerships amidst further ambiguities in the coalition's regional policy. Business leaders have criticised the rush to switch from regional development agencies to LEPs.

Research by Regeneration & Renewal magazine indicates that none of the 24 recently approved local enterprise partnerships (LEPs) plan to recruit regeneration experts from regional development agencies, creating fears about a “brain drain” in the sector. Of 22 respondents to a survey asking about LEP expectations, 12 replied ‘no’ to the question ‘do you intend to transfer any RDA staff to the LEP?’ The remaining ten said they ‘don’t know’.

The survey also revealed confusion over funding. Half (11) LEPs did not know whether there would be any day-to-day finance for their activities. The government has already said it will not be forthcoming with core funding.

Fifteen of the 22 LEPs surveyed said they would be submitting bids to the government’s new Regional Growth Fund – the £1.4 billion pot to help boost the private sector in England. This comes as Lord Heseltine, who chairs the RGF’s advisory panel, has urged businesses (who can also bid) to submit joint submissions to increase their chances of success.

The former trade and industry secretary told Insider magazine this week:

“We have no means of coping with very large numbers of very small bids.”

But ensuring greater localism is supposed to be the point of switching from regional development agencies to LEPs in the first place.

Meanwhile, on the first of his regional roadshows to talk up the RGF, Heseltine sounded decidedly downbeat about the fund’s prospects of making a real difference, telling an audience in Taunton:

“If it was easy to create jobs in the sort of areas we have in mind the market would long since have done so.

“We will do whatever we can to secure value for taxpayers’ money, but we all know that the track record of public investment is littered with failure. We shall do our best to secure value by a close partnership with existing private sector companies.”

So the government’s botched regional policy limps on – despite another business leader voicing concern about the new structures. Sir Peter Rigby, West Midlands technology entrepreneur and chairman of Coventry Airport, has warned that the jury is out regarding the quality of candidates who might end up leading local economic partnerships:

“LEPs have to have good business leadership and get business investment in the future development needs of the city and region. Will they achieve that? I don’t know.

“The remit for that leadership is totally vague. The government is not allocating resources. Hence I would question whether they will get somebody of the right calibre to take the role on.”

He joins a chorus of criticism from business leaders that the switch from regional development agencies to LEPs is rushed and confused and risks freezing-out business leaders from key economic decisions. Clearly it will take more than Eric Pickles’ bluster and Michael Heseltine’s infamous chutzpah to sell this flawed prospectus.

Like this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.