At last month's Local Enterprise Partnerships (LEP) Network Conference I reflected on the developments that have taken place during the five years since the 39 LEPs were established. The conference came in the week that followed the Budget which, as every Budget does, assessed the performance of the national economy. National GDP matters, not least because growth in national income is required to pay off the nation's deficit – a charge on the next generation.
But in my view ‘national GDP' is an integral measure, over the country, of local growth. And local growth occurs when specific people make specific choices in specific locations.
To slightly paraphrase William Blake: ‘General good is the plea of the scoundrel, hypocrite, and flatterer, for art and science [and in our case, economic growth] cannot exist but in minutely organised particulars.'
All growth is ‘local', and ‘particular'. All that is growth and all that is local – rolled up nationwide these ‘minutely organised particulars' become an increase in GDP.
I was reminded of this when I went to see progress on one of the Local Growth Fund projects, the extension of facilities at Eastleigh College in Hampshire. Using funds that were previously reserved for central government, the Solent LEP targeted the need to supply the growing South Hampshire economy with the skills needed to be able to meet growing orderbooks. The £9m of funding will help ensure that by 2021 the college will train 1,250 new apprenticeships in trades that are in demand by local employers. local, and particular.
In every part of the country, the Growth Deals are delivering specific improvements in the the performance of local economies – and, cumulatively, the national economy. The success of the Growth Deals allowed me to announce the next round of funding to be devolved. A further £1.8bn is now available to LEPs for the next round of investments that they wish to make. Quite simply, new deals will be made with the areas with the best proposals; those which best demonstrate how to use all their new powers, including leveraging of private investment, to drive economic growth.
Most LEPs have brought businesses into the closest possible working relationships with councils. And the best LEPs have been a driving force behind the devolution deals that are being negotiated all over the country. And there is more to be done to make sure the benefits of business growth for local councils are fully aligned. That's why we're pushing ahead with 100% business rates retention, so that local government keeps all of the rates paid by particular, local businesses. The Budget announced that we would proceed straight away in areas with mayoral combined authorities, before establishing a national system for retention on which I've challenged the Local Government Association to say how councils believe the national regime should be structured.
It's a huge change: at the start of the 2010 Parliament, nearly 80% of council spending came from government grant. By the end of this Parliament, local authorities will keep 100% of the income they collect, making that increasingly strong relationship between local businesses and their councils inseparable.
During the five years since the LEPs were created we have come a long way. City Deals, Growth Deals and Devolution Deals have changed the question from ‘should we decentralise' to ‘how much can we decentralise'. The answer to this question will depend on the local and the particular. How particular places – with their civic and business leadership – can make proposals that will be demonstrably to the benefit of the people who live and work in their area, and in so doing, to the country as a whole. The next five years promise to be even more transformational than the last.
Greg Clark is secretary of state for communities and local government
