The 39 LEPs?

By Dan Peters | 11 November 2014

Love them or hate them – and many in the sector are not in the fan club – local enterprise partnerships (LEP) have made a difference.

The idea behind them was to shake up the delivery of economic growth by taking centre stage and councils could have been forgiven for feeling these new organisations were muscling in on their domain.

Of course, the LEP name stresses their partnership status, bringing together local authorities and businesses to work on what should be a common agenda.

But, unsurprisingly, the process has not been easy.

There has been a lot of criticism – often valid – thrown at the new kids on the block in the last four years, with some in local government hoping they would be a political fad that would last as long as the current government.

Uneasy relationships continue in some areas, particularly where LEPs are new and not underpinned by a previous history of partnership working.

As Eastleigh BC leader Cllr Keith House told a Lib Dem conference fringe event this year: ‘To be honest, we wouldn’t notice if LEPs were not there.’

And LEPs have reappeared on the agenda this week, with a joint report by the Association of Directors of Environment, Economy, Planning and Transport and Chief Economic Development Officers’ Society giving an early assessment of the local growth deals.

The report, seen by The MJ, finds that local authorities were sidelined in the ‘haphazard’ negotiations with government, there was over-emphasis on capital spend in 2015/16 and there has been a lack of proper feedback from Whitehall.

It also criticised the deals’ contribution to devolution, highlighted mixed messages and changing requirements from government and objected to the ‘overly-demanding’ timescales involved.

Despite this, some of these negative voices have got quieter as some LEPs have started to make progress in establishing themselves as a key delivery model for local growth.

What has probably made the biggest difference, however, is the growing realisation that their increasing influence is here to stay beyond the next election.

The Department of Communities and Local Government (DCLG) insists LEPs are ‘proving their worth’ and they have been backed by the main political parties, forcing some councils to adapt their approach to spending on economic development and on their structures.

Labour, for example, instead of talking about scrapping LEPs is considering reform.

One senior national Labour source said: ‘The tricky thing is do we carry on with 39 LEPs? If there are fewer, on what basis are there fewer? We are not sure how many fewer there should be. Is there a case for them amalgamating?’

What is clear from this list of rhetorical questions is that the future of LEPs is far from certain, especially with the advance of combined authorities onto the agenda.

Director of the New Local Government Network think-tank, Simon Parker, believes combined authorities could wrest the economic growth agenda away from LEPs.

Mr Parker said: ‘I think LEPs are an intermediate step to a better council-led form of governance. There is so much more to recommend in the combined authority model than the LEP structure. Thinking about further devolution, LEPs are probably not robust and accountable enough to take on the new responsibilities.’

But some of the most ambitious LEPs and their business members are unlikely to want to lose the influence they have managed to win.

As chief executive of the Local Government Association (LGA), Carolyn Downs, recently warned: ‘Some of the LEPs are clearly setting themselves up as an alternative to a local authority structure.’

Shadow communities secretary Hilary Benn believes at the very least it makes sense for LEP boundaries to coincide with those of combined authorities.

Manchester City Council leader Sir Richard Leese has also argued that LEPs ought to follow functioning economic areas ‘as close as possible’.

Director of the Institute of Local Government Studies, Catherine Staite, said: ‘At least on paper it’s quite a confusing picture. I think wherever possible the boundaries of LEPs and combined authorities should be aligned so they’re all rowing in the same direction.’

Future boundaries may be up in the air but what is clear is that LEPs could certainly learn a few lessons from the local government sector, in which there is a resurging confidence.

Part of this is the result of moves towards greater openness, with councils having made progress in publishing key datasets even before the imposition of the DCLG’s transparency code earlier this year.

Chair of the LGA’s improvement and innovation board, Cllr Peter Fleming, said: ‘Local government is the most open and transparent part of the public sector and councils already publish information on budgets and revenues, performance, salaries, asset and annual parking reports.

‘This allows residents to democratically hold them to account, and helps drive innovation and efficiencies.’

The DCLG’s own code argues that transparency is the ‘foundation of local accountability and the key that gives people the tools and information they need to enable them to play a bigger role in society’.

It adds that fraud can ‘thrive where decisions are not open to scrutiny, and details of spending, contracts and service provision are hidden from view’.

Chairman of the management committee of the LEP network, Alex Pratt, believes transparency will become a ‘critical dimension’ to the organisations’ success but admits each one ‘will have its own approach’.

Despite the mixed picture, the DCLG has decided that the transparency code should not apply to LEPs, making them shrouded in secrecy, as well as unelected and democratically unaccountable.

In response to the National Audit Office claiming LEPs were creating ‘blurred lines’ of accountability, the DCLG has agreed to work closely with the watchdog to improve transparency but maintains they are democratically accountable through the local authority leaders sitting on them.

But, as revealed by The MJ's sister title Transport Network, months after England’s 39 LEPs were allocated billions of pounds of taxpayers’ cash through the local growth deals, DCLG has failed to publish the accountability arrangements it promised.

Despite their aim to increase the influence of firms, criticism has even come from the Federation of Small Businesses, which recently highlighted how only 31% of LEPs published annual accounts and less than half produced annual reports.

Some LEPs have been proactive on this and could act as an example to others.

But, as with so much relating to LEPs, practice varies wildly across the country, with everybody offering different levels of council representation, ambition and efficiency. One chief executive of a council in the South East LEP area described it as ‘terrible’.

More generally, shadow local government minister Andy Sawford has highlighted how LEPs are ‘not really accountable to anyone’.

He told The MJ: ‘Throughout the passing of the Local Audit and Accountability Act Labour argued for greater transparency and accountability for LEPs.

‘As LEPs become more powerful it is right that members of the public have more information about who sits on their local LEP and how decisions are made.

‘A future Labour government has identified the equivalent of £30bn of funding to devolve to city and county regions over five years. As part of this decentralisation, we will ensure greater accountability of LEPs and ensure they are co-terminus with combined authorities so they can operate more coherently and effectively.’

Looking to the future, with LEPs expected to handle £17bn of public money between now and 2021, the issues surrounding them are certainly not going to go away.

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Local economies Local Government Association Politics MHCLG Economic growth Local Enterprise Partnerships NLGN Devolution Combined Authority

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