Thursday, September 23, 2010

Still waiting for the great LEP forward

Speaking at an event at the Liberal Democrat conference, Vince Cable has reported that of the 56 Local Enterprise Partnerships bids received by the closing date of the 6th September, only 10-15 of them are any good. He added that most regions are 'hopelessly fragmented and will have to get their acts together.'

This will come as a surprise to precisely nobody. The LEP concept, with a business-led partnership with local authorities, has been cobbled together with entirely inadequate guidance and direction as to what was expected in a bid - the government haven't even been clear as to what the responsibilities of the LEPs are likely to be. I'm puzzled by Cable's criticism of the fragmentation, as that was always going to be the outcome of abolishing the eight RDAs and leaving it up to local businesses and councils to sort themselves out - fragmentation was exactly the aim if Pickles' chaotic vision of localism was to be achieved. Curiously, this vision of localism

If the government wanted a continuation of the regional agenda, then they should have set out to establish replacements for the RDAs. The whole logic behind the scheme is fundamentally flawed in the first place - a regional viewpoint is essential when it comes to large scale regeneration of areas suffering structural economic problems. Reordering an economy is not something best left to a local authority and it actually needs sight of the bigger picture within a region. Most of the LEP bidders will be sent back to the drawing board - whether they are given any blueprints from which to work is a matter of conjecture, although it seems that Cable has some sort of checklist that allows him to dismiss certain applications at this early stage. It would have been of great help to LEP bidders if they had been let on this secret prior to the closing date for submissions, as the bids were submitted with only the vaguest of outlines.

It appears to be a done deal that the Regional Growth Fund, the only game in town when it comes to funding, will be doing its bit for the localism agenda by centralising all the money in the hands of two people who will dole it out directly to businesses. They will only have £1 billion to spend over the course of two years, which is hardly a huge amount, but it is intended to be focussed on areas particularly badly hit by the cuts to public sector jobs. The problem is that one of the two men in charge of this fund isn't in favour of giving any money to the LEPs, even assuming that these bodies are incorporated in a way that allows them to bid for funding from the RGF and are not just loose associations of businesses and local authorities.

Meanwhile, it has become apparent that when Eric 'Pieman' Pickles swept the RDAs away, he failed to consider what was to become of their liabilities, so there is now a bill of at least £1.5 billion floating around, with a serious risk that the costs could escalate beyond the £2 billion mark once all the outstanding costs are tallied up and the final demand will probably end up on the doorstep of Pickles' own Department of Communities and Local Government. The excellent Allister Hayman at the Local Government Chronicle runs through the options that Pickles has to find the money, made even more challenging by the deep cuts that Pickles has already offered up to the axemen from the Treasury - housing and charity programmes look set to all but disappear and the RGF may find that even the promised £1 billion fails to materialise in full.

Another dark cloud on the horizon is the funding provided by the European Regional Development Fund, which has some £1.9 billion to be delivered through England's regions, but with the demise of the RDAs, the match funding required to access this looks to be unavailable. Considerable work is going on to try to get private and public sector bodies to provide matching resources, but it is entirely possible that the Tory/Liberal Democrat government will have to effectively hand back almost £2 billion of European money needed to invest in our regions simply because they cannot match it.

It does look increasingly likely that the LEPs will have no money, no resources and will therefore have no real impact on communities that are about to be hit very hard by economic cuts.

1 comment:

Dankzy said...

The LEP concept is clearly a distraction tactic to bamboozle the business community into believe it will be living in the land of milk and honey while systematically dismantling everything that's there to help them.