As we have seen over the past few years, politics is essentially a battle of ideas, even within political parties.
If we rewind back to 2010 and the first of five successive Conservative leaders, we saw the birth of private sector led Local Enterprise Partnerships (LEPs) which were charged with driving local economic growth. They replaced Regional Development Agencies as sub-regional bodies - albeit ones that cut across many local government boundaries.
Fast forward 13 years and six governments later, and local growth is back on the agenda, with powers and funding increasingly flowing back into councils.
Over the last few years, we’ve seen the devolution agenda comprehensively rebooted with growth funding delivered directly to local government, empowering and emboldening local leaders. Running parallel to this has been a gradual weakening of LEPs, culminating in this March’s ‘minded to’ decision to stop funding them and integrate their functions within councils.
With a final decision likely over the coming weeks, today the County Councils Network (CCN) has released a new report with EY which explores the key themes and considerations that will make for a successful transition from LEP to local government.
It has been difficult to comprehensively assess the success of LEPs in terms of outputs and outcomes. There has been remarkably little carried out in the way of evaluation from successive governments and this arguably flows from one of their biggest drawbacks – a lack of democratic accountability.
We know that this government places a great emphasis on direct accountability and strong local leadership. Having diverted funds that erstwhile would have gone to LEPs to councils, bringing their functions back in-house is the natural next step.
All of this comes at a crucial time. According to analysis carried out by EY in the report, it will be a full five years since the pandemic before economic outputs recover in the 27 LEPs that cover (fully or partially) county areas. Growth, as measured by GVA, will be higher by 3% in 2025 compared to 2019 but that is well below the 11 LEPs covering city and urban areas who are set to grow at 6.7% on 2019 and saw their economies recover from the pandemic as early as last year.
Growth in England’s counties has long lagged behind the major cities, so CCN’s member councils need as many tools that they can get their hands on. Devolved powers will be a significant boon, and having LEP functions on top will be another string to their economic growth bow.
So, if we take it as likely that LEP functions will be subsumed into local government, then today’s study sets out how.
We at the CCN believe that the government should be guided by three main principles – be strategic; be decisive; and be clear.
The first principle is crucial. If LEPs are not integrated at the right strategic level then any amalgamation into local government is likely to be more difficult and lead to less effective outcomes.
Here, the report finds that upper-tier local authorities have the necessary strategic scale and powers to convert any national economic growth ambitions into local action, with these authorities having a track record in convening the voices of business, education, and political leadership in their areas.
For CCN members, many of them align with present LEP boundaries and therefore they can build up a head of steam from day one, building on their pre-existing role in shaping sub-regional economic growth strategies.
Government also needs to be decisive. Local authorities need to be doing all they can to drive up productivity to help ease the cost-of-living crisis and, in turn, improve national prosperity.
Therefore we need ministers to make a decision in the coming weeks, and do so in a way that is a clean break from the past. If the transfer of functions is delayed beyond the April 2024 target, or LEPs continue in some piecemeal fashion, we will end up with a muddled and confused picture of business support - the worst of both worlds at a time when CCN members need to be delivering for their residents.
Last but not least, ministers need to be clear. They should set out an over-arching strategic framework that councils can work towards, including clear principles for governance and accountability, baking in the voice of business, and consolidating both existing local authority and LEP growth plans. As part of this, there should be a clear roadmap for transition laid out, but there should be enough room left for local nuance and flexibility where required.
We at the CCN have long believed local growth is most naturally at home within councils, and now we want to work with business leaders and LEPs on a smooth transition. Today’s report sets out how we can achieve this.
Alun Hughes, Senior Policy Advisor: Economic Growth, County Councils Network
