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What now for LEPs on localism and devolution?

 

The need for strong, effective local leadership has never been greater, argues the chair of the Institute of Economic Development (IED), Bev Hurley.

With national funding for economic development and regeneration continuing to nosedive, and mechanisms for disbursing the proposed UK shared prosperity fund – like most things Brexit, unknown in quantum and structure – as we sit here today local government faces a daunting challenge.

The key opportunity presented by Brexit is around localism and devolution agendas, particularly with combined authorities, new mayors and local enterprise partnerships (LEPs). However, this does not mean there aren’t significant obstacles to be overcome.

One of the key challenges of the localism agenda is around skills and leadership deficits at a local level, and generally there is a great deal more to do to improve the capacity and capability of leadership and particularly around how we collaborate and overcome political differences.

The role of LEPs – which in my view are absolutely critical to the successful delivery of these agendas within this new landscape, and indeed many of the Institute of Economic Development’s members are from LEPs so we know their immense value – is also unclear, especially where economic geographies don’t align with combined authorities.

With the Local Growth Fund and locally-negotiated Growth Deals, forecast to rise to £12 billion by 2020-21, LEPs clearly have a vital part to play in spending taxpayers’ money wisely, as well as their strategic oversight of £5.3 billion of European Structural and Investment Fund (ESIF) funds.

Many LEPs depend on local authority partners for staff and expertise, but continuing deep funding cuts and statutory services having the first call on local authority money means that the economic development skills gap (already a key concern of the IED’s local authority members) can only get worse.

In addition, long-term transport or infrastructure projects require certainty and funding stability, and sadly certainty and stability is in pretty short supply right now, particularly in the business environment.

And this, in turn, impacts back on the skills issue in a vicious circle – if you can’t offer long-term prospects and career development to professionals, how can you attract or retain the right people with the right expertise to deliver effectively?

Greater business involvement in LEPs would help provide this missing expertise and commercial knowledge. Whilst chairs were mandated to be from the private sector, and many LEPs have attracted highly experienced business leaders to this role, private sector board membership averages only 58%.

In addition, representation on the boards from the SME sector is very small, and given the significant amount of money in which LEPs are involved, there have been criticisms about a lack of transparency and accountability in aspects of their management.

The need for strong, effective local leadership has therefore never been greater if all these challenges are to be overcome. Doing better with less requires a true spirit of openness, collaboration, and a willingness to engage across boundaries. It needs expertise, knowledge and experience, and collectively we need to work together to train and develop our people to meet both current and future skills gaps.

The IED, as the UK’s leading independent professional body for economic development and regeneration practitioners, is committed to working with LEPs and others to address these challenges in partnership – we are stronger together.

There is also a bigger picture here for the economic development profession that we need to address and the IED will be addressing over the next 12 months. That economic development remains a non-statutory function of local government in England is not helpful to achieving successful localism and devolution and improving our prosperity, productivity and competitiveness.

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