A critical moment for LEPs?
Author: Alex Thomson, in the MJ |
Alex Thomson, chief executive of Localis, argues enterprise partnerships must win battle of hearts and minds, to match new funding and responsibilities.
I know I’m not alone in finding it difficult to remember birthdays, anniversaries, and the like.
So when Lord Heseltine’s ‘No Stone Unturned’ growth review was launched almost exactly two years to the day since the creation of local enterprise partnerships (LEPs) that featured heavily in his report, I wasn’t terribly surprised that their birthday went all but unremarked.
Which begs the question, having had a reasonable amount of time to establish themselves, and challenged by the government’s adviser to take the lead on growth, is now the critical moment for LEPs to show what they’re made of?
In considering the development of LEPs, one could draw an analogy to a child of similar age ? you would hope that they’ve made it past the teething stage, but they’re still trying to understand their place in the world and have yet to truly find their voice.
Should we be surprised? LEPs enjoy the favour of government, in rhetoric at least. A joint initiative by the Departments of Communities and Local Government, and Business Innovation and Skills (a rare beast indeed), LEPs are supposed to represent both local government and local businesses.
But one leader I spoke to recently thought that government has given them too many responsibilities, with ad-hoc grants and initiatives distracting them from their core purpose: providing strategic leadership in their areas to set out local economic priorities.
The government, as always, is in a tricky position. On the one hand, it faces calls for LEPs to be given more powers and responsibilities, on the other it wants to avoid the return of a quangocracy in the vein of the old regional development agencies. It’s a difficult balancing act.
But for the LEPs themselves, now is the moment that they must sink or swim. They now have core funding, with provides them with a base to build upon, but they have to make some tangible progress. One policy area that they could focus on is skills.
Momentum has been building for some time to rethink how skills policy and funding works. The so-called ‘skills mismatch’ theory is gaining traction, reflecting the fact that the ratio of hair dressers or car mechanics being trained versus the number of jobs available exceeds twenty-to-one in some parts of the country.
These are extreme examples of course, but reflective of a system that is clearly not working as it should.
Lord Heseltine has called for much of the skills funding from 16 onwards to be devolved into a single funding pot for local areas to bid for funding.
I would question whether a competitive bidding process is necessarily the right approach? will it lead to some areas ending up with nothing at all, and others whose presentational skills are particularly effective getting more than they frankly deserve? And in many ways, community budgets and city deals reflect similar such devolution already.
But it remains a key area where LEPS can act as a force for good ? if they are to be seen as a success, they need to be in the mix here.
Also vital for the public image of some LEPs will be the success of Enterprise Zones. It’s now over a year since the 24 zones were announced, with a commitment to deliver by April 2015 some 30,000 or so new jobs. That deadline is not quite so far away as some may think, and if things aren’t looking too rosy, it may not be too long before ministers and individual LEPs start hitting the panic button on this one.
In the final analysis, LEPs need to develop strong, productive relationships with both businesses and local authorities if they are to become a permanent feature of the governance landscape. Business needs to see that LEPs are delivering something worthwhile to support and encourage economic development, so they feel that their involvement is worthwhile.
And councils need to know that their LEP provides a useful vehicle for them to shape their localities for the better, though that is easier said than done. Some LEPs will undoubtedly have less productive relationships with their local public sector counterparts than might be desired.
Other LEPs suffer from politically (small and big ‘p’) challenging geographies, or those which have a rather tenuous claim to being based on functional economic geographies. If some LEPs just aren’t working, one wonders whether they might merge, split, or fold ? and if central government might let them.
Ultimately, LEPs will need to win the hearts and minds battle. When they had no funding and few responsibilities, many were content to let them continue without too much criticism.
Now they have funding, responsibility and, after Lord Heseltine’s review perhaps, the limelight, they’ll need to start convincing both government and business that they’re fit for purpose.