UK levelling up plans risk freezing out growth hubs, business leaders warn

In a science park south of Oxford an autonomous car is demonstrating that it’s able to evading a skateboarder — or on this case an £11,000 side-impact check dummy, or Sid, on a remote-controlled trolley — because it makes use of a pedestrian crossing.

The dummy being put by its paces on the Culham Science Centre in Abingdon was delivered because of £500,000 obtained by the Oxfordshire Native Enterprise Partnership, one among 38 LEPs in England which are designed to spice up regional economies.

However after greater than a decade in existence LEPs are to be wound up as unbiased our bodies from April 2024 within the authorities’s drive to speed up devolution in England and hand extra energy to native governments and mayors.

The change is a part of the levelling up agenda set out in a white paper final 12 months by levelling up secretary Michael Gove. However many native enterprise leaders and consultants worry that dissolving LEPs, which have been arrange in 2010 as a successor to the Regional Improvement Businesses (RDAs) — will come at a value.

Clare Hayward: ‘My concern is that the unbiased enterprise voice goes to be watered down’

“My concern is that the unbiased enterprise voice goes to be watered down,” stated Clare Hayward, chair of Cheshire and Warrington LEP and a managing director on the enterprise consultancy Accenture.

Nigel Tipple, chief government of the OxLEP, factors to Sid for example of how the partnerships can ship added worth, coordinating with politicians and serving to win cash from more and more fragmented authorities funding pots in Whitehall.

“LEPs can simplify that panorama and co-ordinate throughout political our bodies whereas additionally sustaining an unbiased voice for enterprise,” he stated, noting that OxLEP included representatives of six native councils in addition to Oxford metropolis council.

Chancellor Jeremy Hunt introduced that he was “minded” to stop funding the LEPs within the Finances in March, providing £12mn for a remaining 12 months’s operational funding and a authorities session to resolve how they need to be folded into native authorities.

“The federal government is dedicated to empowering democratically elected native leaders at each alternative. To this finish, the federal government intends for the capabilities of native enterprise partnerships to be delivered by native authorities sooner or later,” he stated.

Mark Bretton, chair of the LEP Community, which represents all 38 LEPs, stated the chancellor’s resolution “might considerably diminish and even silence the voice of native enterprise” in regional financial coverage.

In final 12 months’s levelling up white paper the federal government stated it needed to “retain the important thing strengths” of LEPs, whereas “higher integrating” their providers into new devolution plans.

Nevertheless, critics warn that folding all LEPs into native authorities dangers shedding a discussion board that at the moment brings collectively greater than 2,000 enterprise leaders, 350 additional schooling faculty and college leaders, and 200 native politicians in current schemes.

Bretton stated of explicit concern have been the 12 or 13 LEPs that coated geographical areas with a number of native councils and didn’t match right into a devolved space, reminiscent of Manchester or Liverpool, the place LEPs are already firmly built-in into native authorities.

Nevertheless, Thomas Pope, of the Institute for Authorities think-tank, stated the plans to abolish the partnerships have been logical, on condition that LEPs now not had their earlier function of delivering Native Progress Funds, which they did between 2015-2020.

“The panorama is at the moment fragmented. However the purpose in 5 or 10 years is that extra [business development] will probably be delivered by beefed up mixed authorities with extra freedom in insurance policies they select, extra versatile funding, however participating with enterprise,” he stated.

The enterprise growth plans of stronger devolved authorities will as an alternative be pushed by employer-led consortiums reminiscent of the brand new Native Expertise Enchancment Plans. Paul Kett, the previous expertise lead on the Division for Schooling now with the consultancy PwC, stated these will assist and affect native decision-making, relatively than competing with it, which was generally an issue with LEPs.

Specialists applauded the purpose of making a extra coherent panorama for industrial technique by scrapping LEPs. However some worry they are going to be changed by a patchwork of latest establishments, replicating the issue policymakers try to unravel.

Sean Mackney, chief government of Petroc additional schooling faculty in Devon, stated that it was unclear scrapping LEPs would result in a extra strategic strategy to enterprise funding. “With out sustained and elevated funding, initiatives like LSIPs will simply be new, inadequate pots of cash, unconnected to a unified transformative technique or plan,” he stated.

Shevaun Haviland
Shevaun Haviland: ‘Funding needs to be simplified and put into bigger pots, which companies can have certainty will nonetheless be moving into 5 years’ time’ © Yui Mok/PA

Shevaun Haviland, director-general of the British Chambers of Commerce, agreed, warning that firms have been confronted with “fragmented schemes, which overlap, have inadequate funds, contain an excessive amount of paperwork, and are too short-term” and have been exhausted with limitless change.

“Funding needs to be simplified and put into bigger pots, which companies can have certainty will nonetheless be moving into 5 years’ time,” she stated, “The federal government additionally must cease reinventing the wheel. It ought to use current networks to make this occur.”

Again in Oxford, Tipple stated that discussions are already underneath means over how Oxford’s six native councils, all of which sit on the OxLEP board, can keep the advantages of the LEP and retain the non-public sector expertise of partnership staff who aren’t on native authorities payrolls.

Nigel Tipple
Nigel Tipple: ‘LEPs can simplify that panorama and co-ordinate throughout political our bodies whereas additionally sustaining an unbiased voice for enterprise’ © Charlie Bibby/FT

Tipple, who lived by the transition from RDAs to LEPs, stated one possibility can be a Native Improvement Firm, with native authorities leaders on the board and holding a controlling share.

“We are able to’t waste one other two years, we’d like a well timed and well-managed integration to keep up an unbiased voice for enterprise. I believe there’s a recognition that if we didn’t have one thing just like the LEPs, then we’d must invent it,” he stated.

The Division for Levelling Up, Housing and Communities stated: “The federal government is consulting with LEPs and different companions on this proposal and it might be inappropriate to remark additional at this stage. We are going to define subsequent steps by summer season 2023.”

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