Localism Bill

The Committee consisted of the following Members:

Chairs: † Mr David Amess  , Hugh Bayley 

† Alexander, Heidi (Lewisham East) (Lab) 

† Barwell, Gavin (Croydon Central) (Con) 

† Bruce, Fiona (Congleton) (Con) 

† Cairns, Alun (Vale of Glamorgan) (Con) 

† Clark, Greg (Minister of State, Department for Communities and Local Government)  

Dakin, Nic (Scunthorpe) (Lab) 

† Dromey, Jack (Birmingham, Erdington) (Lab) 

† Elliott, Julie (Sunderland Central) (Lab) 

† Gilbert, Stephen (St Austell and Newquay) (LD) 

† Howell, John (Henley) (Con) 

† Keeley, Barbara (Worsley and Eccles South) (Lab) 

† Lewis, Brandon (Great Yarmouth) (Con) 

† McDonagh, Siobhain (Mitcham and Morden) (Lab) 

Mearns, Ian (Gateshead) (Lab) 

† Morris, James (Halesowen and Rowley Regis) (Con) 

† Neill, Robert (Parliamentary Under-Secretary of State for Communities and Local Government)  

† Ollerenshaw, Eric (Lancaster and Fleetwood) (Con) 

† Raynsford, Mr Nick (Greenwich and Woolwich) (Lab) 

Reynolds, Jonathan (Stalybridge and Hyde) (Lab/Co-op) 

† Seabeck, Alison (Plymouth, Moor View) (Lab) 

Simpson, David (Upper Bann) (DUP) 

† Smith, Henry (Crawley) (Con) 

† Stewart, Iain (Milton Keynes South) (Con) 

† Stunell, Andrew (Parliamentary Under-Secretary of State for Communities and Local Government)  

† Ward, Mr David (Bradford East) (LD) 

† Wiggin, Bill (North Herefordshire) (Con) 

Sarah Davies, Committee Clerk

† attended the Committee

Public Bill Committee 

Thursday 17 February 2011  

(Morning)  

[Mr David Amess in the Chair] 

Localism Bill

Written evidence to be reported to the House 

L 107 Peter Hayward—further memorandum 

L 108 Hampshire county council 

L 109 Kathleen English 

L 110 Society of Local Council Clerks 

L 111 Friends of the Earth 

L 112 Mars Omega Partnership Ltd 

L 113 London borough of Hammersmith and Fulham, The royal borough of Kensington and Chelsea, Wandsworth borough council and Westminster city council 

L 114 Local Government Group 

9.30 am 

The Chair:  Before we proceed, Members may wish to know that the deadline for tabling amendments to be considered on Tuesday 1 March will be 4.30 pm on Thursday 24 February. 

Clause 90 

Duty to co-operate in relation to planning of sustainable development 

Mr David Ward (Bradford East) (LD):  I beg to move amendment 194, in clause 90, page 61, line 36, at end insert 

‘or is a body which has been designated as a Local Enterprise Partnership by the Secretary of State.‘(7) The Secretary of State may designate a body as a Local Enterprise Partnership where they are satisfied that it meets the following conditions—(a) the body is established for the express purpose of furthering the economic development of a specific geographic area,(b) the area concerned consists of more than one local authority area,(c) the membership of the body consists of representatives of local authorities, other public bodies or persons whose activities are based in the area concerned,(d) there are at least half of the members of the body each of whom are not representing a local authority or other public body and whose business activities are based in the area concerned, and(e) the organisation or body has a written constitution.’.

The Chair:  With this it will be convenient to discuss new clause 8—Local enterprise partnerships— 

‘(1) For the purpose of this section England may be divided into economic areas to form the basis of a Local Enterprise Partnership (LEP). The boundaries of the economic areas for each LEP are to be decided by the leaders of local authorities and are subject to approval by the Secretary of State.(2) A local enterprise partnership can be established under this section as a body corporate as and when the board members of such an organisation consider appropriate.(3) On being established as a body corporate a local enterprise partnership may be given formal powers by the Secretary of State to—(a) request or have first refusal on the assets and liabilities of a regional development agency in their area.(b) oversee local skills strategy and to influence public investment in skills.(4) A local enterprise partnership shall have the following purposes—(a) working with Government to set out key investment priorities, including transport infrastructure and supporting or coordinating project delivery;(b) coordinating proposals or bidding directly for the Regional Growth Fund;(c) supporting high growth businesses, for example through involvement in bringing together and supporting consortia to run new growth hubs;(d) making representation on the development of national planning policy and ensuring business is involved in the development and consideration of strategic planning applications;(e) leading changes in how businesses are regulated locally;(f) strategic housing delivery, including pooling and aligning funding streams to support this;(g) working with local employers, Jobcentre Plus and learning providers to help local workless people into jobs;(h) coordinating approaches to gaining funding from the private sector;(i) accessing and delivering European Regional Development Funding;(j) exploring opportunities for developing financial and non-financial incentives on renewable energy projects and Green Deal; and(k) becoming involved in delivery of other national priorities such as digital infrastructure.’.

Mr Ward:  Amendment 194 is a probing amendment to test the Government’s view of the role of local enterprise partnerships, particularly their duty to co-operate. As it stands, the duty to co-operate could not apply to LEPs because it applies only to persons who exercise functions for the “purposes of an enactment”. That means that the body whose main function is to foster cross-boundary co-operation between local authorities on the infrastructure needs of businesses would not have a role in strategic planning beyond a material consideration. 

I am a member of the Business, Innovation and Skills Committee, which looked at the role of LEPs. Various witnesses, who gave their evidence politely and diplomatically, felt that the LEPs were stumbling towards a purpose in life, although the model is very difficult to see at first hand. 

I am concerned about the message that is being sent to businesses if this flagship economic policy—I am not being facetious, because it is genuinely seen as being so—is not considered important enough to be given a statutory base. The Government want LEPs to take on a strategic function in planning and infrastructure, but there is no statutory involvement or requirement. Giving them a role in the duty to co-operate could be the necessary step for businesses to feel that LEPs are something other than talking shops. 

The Government have suggested that there is no need to include LEPs in the clause because the duty already applies to the constituent members, so local authorities and the top people within those local authorities—the leaders of the respective councils—would already be involved. I do not believe that is sufficient. There seems to be substantial scope for LEPs to be involved well beyond that. 

The British Chambers of Commerce suggested that LEPs could have a scrutiny role on the duty to co-operate and a right to appeal to the Secretary of State if local authorities failed to discharge their duty. Alternatively, they could be directly involved in the drawing up of planning documents. However, as a member of the Business, Innovation and Skills Committee, I understand why the Government do not wish to encumber the new LEPs with many of the additional responsibilities that seemed to stick like glue to the regional development agencies. 

There are two points to raise. One, which I mentioned last week, is throwing out the baby with the bathwater—getting rid of things without having something really firm in mind to replace them—and the other is the emperor’s clothes. I mentioned the diplomatic response of the witnesses who gave evidence to the Select Committee. There was general agreement that getting rid of the RDAs was silly, although there was clearly a need for review. If we were to have a complaints session covering things we did not like about the RDAs, I would be at the front of the queue. I had many run-ins with the RDAs and saw many of their weaknesses and faults. However, it was clear from all the presentations that there is a definite need for a strategic approach on the major issues that face businesses, which is what my amendment is an attempt to put in place. 

I do not pretend that my amendment—nor the Opposition’s new clause 8, which specifies some duties and responsibilities of LEPs—is the best way of achieving what we want to do. However, we are trying to make up for a shortfall. We are trying to fill a gap—or a vacuum—that will be created following the demise of the RDAs. Amendment 194 basically says that a LEP is a LEP, if it is a LEP—[ Laughter. ] We have to proceed on that basis because someone tell me what a LEP is! I understand that the Government say that they are open-minded, but there is a difference between open-minded and being vacant. A huge vacancy existed throughout the hearings of the Business, Innovation and Skills Committee, because business men said, “How can we possibly tell you what we see as the role for LEPs when you will not tell us the basic framework, model and criteria?” I think we are still in that position. 

I shall make one point about new clause 8. I believe—surprise, surprise—that the first refusal on assets should go to the local authorities. There are about seven in the Bradford district that were held by Yorkshire Forward, and they are in a pretty poor state because they were acquired for regeneration. Unfortunately, while those assets resided with Yorkshire Forward, the mess that results from the acquisition of assets that have just lain idle lies with the local authority. The local authority should first be given the opportunity to decide whether it wants to take on those assets before they are offered to undemocratic and, to a degree, unaccountable—albeit with local authority representation—LEPs. 

I want a fuller explanation from the Minister of how the Government see LEPs fitting into the process, and also why they do not feel it is necessary to give the role legal force. 

Jack Dromey (Birmingham, Erdington) (Lab):  I shall speak to new clause 8. 

I served on the Business, Innovation and Skills Committee with the hon. Member for Bradford East when we conducted the RDA inquiry. He gave hon. Members a masterly analysis that summed up what we found—first, that it was a mistake to abolish the regional development agencies. Should they be tested and reformed? Yes. Were they all as effective as they might have been? No. At their best, however, were they deeply impressive? Yes, they were. Secondly, the hon. Gentleman was right that the transition to the new arrangements has been poorly managed at the worst possible time—just when local businesses and local economies need support, guidance and assistance. Thirdly, he is right to say that the new arrangements leave a great deal to be desired. Fourthly, like him, we believe that if the RDAs are, sadly, to be a thing of the past, we now have to focus on trying to make the new arrangements work in the best interests of the economy and our local communities. The hon. Gentleman made an interesting contribution. 

New clause 8 would provide a statutory basis for local enterprise partnerships. We are extremely surprised and disappointed that the Government have failed to include provisions in the Bill that would put local enterprise partnerships on a statutory footing. That failure goes to the heart of the Government’s failure on the economy more generally, and their unconvincing strategy for growth. 

We can see the Government’s original intentions on the No. 10 website. Under the heading “the main elements of the Bill are”, it states that the Bill will: 

“Create Local Enterprise Partnerships (to replace Regional Development Agencies) – joint local authority-business bodies brought forward by local authorities to promote local economic development.” 

However, there are no provisions related to the new local enterprise partnerships in the Bill. In fact, the Bill is silent on any form of growth strategy. LEPs are meant to be the flagship of the Government’s economic policy for the regeneration of local economies and the regions, but only seven months after they declared that they would bring forward provisions on LEPs, the Bill has been published without a single mention of them. 

The Government’s mistaken conduct on the planning system is almost entirely mirrored in their conduct on the abolition of the regional development agencies and the way in which LEPs are being created. Their scrapping of the previous system and dismantling of the regional development agencies is creating huge uncertainty and depriving local communities and businesses of vital support at a difficult time. The Government are failing to support strong and credible organisations to replace the RDAs. 

My experience has shown that the most successful of the regional development agencies—in which every £1 invested realised £8.14 in wealth in the local productive economy—was Advantage West Midlands. It did not always get it right, but some of its achievements were truly remarkable. I could give many examples, but time

does not permit me to go into this in detail, so I shall outline just one. Rover nearly collapsed in 2000. In the five years that followed, Advantage West Midlands ensured through a magnificent collaborative effort that the supply chain diversified. That meant that when Rover sadly eventually did collapse in 2005, the supply chain in the midlands did not collapse with it. 

To this day, the work of Advantage West Midlands has galvanised a motor manufacturing cluster in the midlands that is 150,000 strong. There are the primes: component companies such as GKN; machine tool companies such as Goring and BSA; and logistics companies. Warwick university has worked with Gaydon. At the other end of the spectrum, games companies in the midlands are working with Jaguar Land Rover on the next generation of in-car entertainment systems. A key reason why Jaguar Land Rover, which is now owned by Tata, committed to Britain in last October’s historic decision was because, in the words of the chairman and chief executive, there are only two places in the world where there is a motor manufacturing cluster, which is key to its development and growth, and the midlands is one of them. That historic decision would not have been taken without the work of Advantage West Midlands with local authorities, universities and the private sector over many years. Forgive me, Mr Amess, for setting out that example in some detail, but the RDAs at their best were very important indeed. 

9.45 am 

Fiona Bruce (Congleton) (Con):  I do not have detailed knowledge of the experience in the west midlands, but the Northwest Development Agency had to span an area from the Scottish borders down to the fringes of the north midlands. That region was far too large for the agency to be effective and fair across the board to all its areas. I, for one, am pleased that it is being replaced with more LEPs that will address sub-regional areas rather than an entire north-west region, which was far too big. 

Jack Dromey:  The hon. Lady makes an important point. There is no doubt that sub-regional arrangements have real value. If one was having a sensible debate about reforming the RDAs, precisely that point should be addressed. Conversely, however—I say this to the hon. Lady with respect—because I know the nuclear industry well, as I led for all the nuclear unions for many years, I can say that the nature of the nuclear industry cluster in the north-west, which stretches from Cumbria down to Warrington, is such that an intense regional strategic and sectoral focus is needed to build on the success of that industry at a time when it has become a sunrise industry, which I welcome, and is no longer a sunset industry. There was never any conflict between the notion of the regional and the sub-regional; the two should have been partners not opposites. However, the Government have put all their eggs in the basket of local economic partnerships. 

James Morris (Halesowen and Rowley Regis) (Con):  I listened with interest to the hon. Gentleman’s eulogy about Advantage West Midlands. Just for the record, does he not agree that growth in private sector jobs in

the west midlands actually declined in the 13 years that the RDA was in existence, that productivity was lower in the west midlands during the 13 years that the RDA was in existence, and that innovation rates in the west midlands were lower than in any other UK region during the 13 years that the RDA was in existence? Given all the evidence about the RDAs' actual economic impact, the best that could be said is that it had no impact at all. 

Jack Dromey:  With the greatest respect, I find that intervention extraordinary. It is absolutely true, if we look at the statistics, that the regional economy of the west midlands is such that the area has gone from being one of the two strongest regions economically to one of the two weakest regions economically. The single biggest contribution to that was the devastating impact on manufacturing industry in the midlands under Mrs Thatcher in the 1980s, which caused serious problems. Mercifully—I do not want to go into the example I cited in further detail—thanks to the role of a good Government agency working in partnership with local authorities and the private sector, we have stopped the haemorrhage in motor manufacturing and built the basis for a solid future. I am involved in discussions right now about new companies coming into the midlands as part of that motor manufacturing cluster. That would not be happening if AWM had not done what it did with regard to the decision made by Jaguar Land Rover. 

Having had an important discussion about the past—sadly, the RDAs are now history—I would like to focus on the future and how we can make the new arrangements work. Local enterprise partnerships lack clout and resources. As the Secretary of State for Business, Innovation and Skills has admitted, the changes are “Maoist and chaotic”. We believe that there has been a failure to put in place adequate transitional procedures, and that the new proposals on LEPs are ill-thought out, inadequately resourced and lack the necessary powers to address the problems that local economies face. We cannot, as a consequence of the changes and the way in which the transition has been handled, have hard-hit regions falling further behind at a difficult time for the economy. 

Fiona Bruce:  The hon. Gentleman says that he wants to move away from looking at the past. When we talk about introducing value into a local area, it is important to appreciate the effort and hard work of those who work in the private sector. That is why it is important that we work with the new plan for LEPs. This is work in progress, and it is disingenuous for the hon. Gentleman to criticise it in such a way at this stage. Through this innovative work, we are seeking—for the first time in many years—truly effective joint partnership working between the public and the private sectors for the benefit of local economies. 

Jack Dromey:  I rely on evidence from the private sector. I have worked with the private sector all my life. As the hon. Member for Bradford East will testify, there was significant criticism from the private sector when the Business, Innovation and Skills Committee conducted its hearings. At best, we were given some good examples of where flourishing local partnerships were starting to be created. Sadly, however, in too many areas, either no LEP exists or there is substantial criticism from the private sector that it is not properly involved. 

Do we, like the hon. Member for Congleton, believe that there should now be a strong partnership through the LEPs, as there was historically through the RDAs? Without hesitation. Our focus is on how we make that work in the next stages. New clause 8 and the arguments deployed by the hon. Member for Bradford East go to the heart of that. Let us look forward. How do we make the new arrangements work? Having decided to establish LEPs, we believe that the Government must now trust and support local areas to drive growth and jobs, not hold them back. If LEPs do not have the power or the resources, as has already been evidenced, business might walk away, which would create yet more uncertainty. Our proposals would give LEPs a range of important powers over skills, European regional development fund funding and RDA assets. That contrasts with the Government’s failure to deliver a plan, leadership or action on growth. 

We are particularly concerned that the Government might be preparing a fire sale of billions of pounds of RDA assets, to which the hon. Member for Bradford East has referred, such as business parks and development land. We believe that LEPs and local authorities, together with the private sector, should have first say over RDA assets to enable real local influence. Ministers might point to the Government’s White Paper that was published in October, but little clarity exists over the fate of such assets. The total value of the land and property assets held by each RDA is in excess of £500 million, which is not a small sum. A substantial asset portfolio is held in the west midlands, for example. We want to ensure that the integrity of such regional assets, which were acquired for the purposes of economic development and strengthening local economies, is maintained so that there are no fire sales to cover large gaps in the budgets of the Department for Communities and Local Government, the Department for Business, Innovation and Skills or the Treasury. 

We are also concerned about the Government’s plans to centralise the delivery of the ERDF into the Department for Communities and Local Government. With the greatest respect to the Secretary of State for Communities and Local Government, given his well-known aversion to anything described as either regional or European, that is like putting a fox in charge of a chicken coop. Under these plans, it appears that LEPs will be excluded, with the management of the fund centralised in Whitehall—I thought we were talking about localism! There will no longer be local and regional input, leadership and direction, which has the consequent risk that regions’ priorities will fail to be reflected. Will the Minister tell us how that fits into the Government’s localism agenda? Is that why LEPs are not mentioned at all in the Bill? 

To return to a point raised by the hon. Member for Congleton, many LEPs share our concern about powers and funding, as do many private sector organisations. For example, the British Chambers of Commerce and the Federation of Small Businesses have also expressed concerns. 

As a consequence of this debate, Labour Members hope, first, to enable LEPs to have responsibility for hundreds of millions of pounds of RDA assets, such as business parks and development land, to give real local influence and allay fears of a Government fire sale. Secondly, we want to give LEPs access to the £1.5 billion of European regional development funding that RDAs

previously managed but is now at risk. Thirdly, we want to ensure that LEPs have appropriate funds for start-up and establishing plans for growth. Fourthly, we want to give LEPs powers to oversee local skills strategies to address local needs. Fifthly, we want to give LEPs a stronger formal role in the development of local economic growth plans. 

From my dialogue with those in the private sector, I know that if they thought that LEPs would be discharging these vital strategic functions, it would be much more likely that they would engage, which would combat the growing cynicism on the part of too many in the private sector. We want the private sector to engage with LEPs to make them work, but many in the sector will be reluctant to do so if they believe the LEPs are but a talking shop. 

It is important that we touch briefly on the hugely important issue of assets. We heard from the Minister of State, Department for Business, Innovation and Skills, the hon. Member for Hertford and Stortford (Mr Prisk), only last week that assets must be sold at market value. RDAs have been asked to look at their property portfolio, assets and liabilities, and to develop plans for disposal to be signed off by the Secretary of State, or the Minister on his behalf. We heard that the priority of the approach is to the public sector at full value. There is talk of the potential involvement of LEPs in disposals, but that would involve significant sums, and the problem is that LEPs have been given not one penny by the Government by way of running costs, for example. Where would the LEPs get the money to take advantage of assets being available for sale? 

We believe that the Government’s approach—this is reinforced by what was said last week—detracts from the ability of RDAs to manage disposals in the best interests of local communities. Crucially, it detracts from the principle of local assets for local people for local economic development, which I think we all support. It is not surprising that the Government are taking this approach—sadly it is the reverse of what we believe is appropriate—because they have said that they are under an obligation to deliver maximum value on public sector investments for the Government as they address the national deficit. 

10 am 

Let us consider what that might mean in practical terms. Forgive me if I take the midlands as an example once again. In fact, I will give three examples from the midlands to show what has happened in the past and the dangers inherent in what might happen in the future. Advantage West Midlands, working closely with local authorities and the private sector, strategically acquired a number of sites, sometimes as a consequence of closures, so that it could have a supply of sites for good industrial expansion and help businesses to grow, keep businesses in Britain and attract inward investment. 

The first example is Rover in Longbridge. Together with the previous Government, I was deeply involved with the efforts to try to prevent that tragedy in 2005. I will never forget the awful day when we finally realised that Rover was going to go under. Afterwards, together with AWM, it was about picking ourselves up, dusting ourselves down and wondering how we could make best use of the site. There has been a very effective partnership between Advantage West Midlands and St Modwen;

they developed a plan that combined industrial development, a new college, some housing to fund infrastructure, and a town centre arrangement in south Birmingham, because that is where the Longbridge site is. 

If the emphasis was changed to achieving maximum value for the Treasury, that, to be frank, would be secured by way of housing development, because in that particular part of south Birmingham and in the adjacent areas there is strong demand for housing. It is an attractive area, in a number of ways. Private sector housing development would be likely to attract more value for the public sector. In the event of the council changing planning use—historically the council has not been as strategic as it should have been, and certainly not as strategic as AWM—that excellent project, which involves the creation of thousands of jobs, would not proceed. 

I will give a second example, Ansty Park in Coventry. Sadly, it is another former industrial location. Great factories that were located there closed, starting in the era of Mrs Thatcher. Together with the private sector, including companies such as Rolls-Royce, AWM developed the notion of a technology park with connections to the M6. All sorts of offers were made; for example, AWM was approached by Severn Trent Water, which asked whether it could locate its headquarters on the site. AWM said no, because it wanted to develop a world-class technology centre. As a consequence, Ericsson, which had the option of shifting some of its production abroad, went to Ansty Park and developed its productive capacity there. 

Once again, if the criterion was to be achieving maximum value for the Treasury, it would be very likely that the site would be developed for housing. Without the firm grip that AWM maintained by insisting on the development of a world-class technology park, the Ansty Park site might have ended up as a business park for logistics firms, with far fewer jobs and much less value to the economy being created than would be generated through the development of the technology park. 

The third and final example is Bosch in Worcester. The company needed to expand. It wanted to move into the production of environmentally friendly boilers, and it also wanted to develop a training hub for high-end engineers working on Bosch product design, development and production, and the servicing arrangements thereafter. It was a landlocked site. The company said that it could go anywhere in Europe; it was seriously contemplating that. The company would not commit on where it would produce and develop the new capacity, but AWM was able to go in, having made a £10-million investment, with a site that the company then took advantage of. AWM rejected the short-term market value view and took a long-term view. When it acquired the site, it argued that if it was able to invest now, there would be up-front gain later. It took a holistic approach, and was not driven by short-term financial returns—in this case, maximum value for the Treasury—but instead chose sustainable jobs that created greater gross value added. 

Mr Ward:  May I come in with another angle with which the hon. Gentleman might agree? Many so-called assets are, in fact, liabilities. They have a negative value. They were acquired as part of site assembly for larger regeneration schemes. If the assets with a positive value

are sold off, the Exchequer would benefit from the gain but the local area would be left with the liability of a site that would not have a positive value until it was developed. 

Jack Dromey:  Once again, a masterly analysis. The last thing we want is for the plums to go and the rotten apples to stay. Some of those contaminated sites will be difficult to bring back into productive use. Would it not be a bitter irony if the Chancellor placed a remorseless focus on maximum value for the public sector—that is, for him— 

Gavin Barwell (Croydon Central) (Con):  For taxpayers. 

Jack Dromey  —and, as a consequence, the plums were sold, the opportunities for good economic development went, and the liabilities were retained, perhaps by the RDAs’ residuary bodies? 

Alison Seabeck (Plymouth, Moor View) (Lab):  We heard a sedentary comment from Government Members about taxpayers, and we are talking about taxpayers—that is absolutely right. However, we are also talking about community assets. We recently debated a whole tranche of clauses dealing with the importance of community assets and communities having buy-in. There is a conflict. 

Jack Dromey:  My hon. Friend is right. As supporters of localism on the Opposition side of the room, and in the best traditions of local economic development, we want local assets to be used for local people and the development of local economies. We do not want a fire sale; to the Chancellor, that might be like all his birthdays arriving on one day, but it would not be in the best interests of the local economies that we represent. 

Gavin Barwell:  If the Opposition wanted local assets to sit with local people, why did the previous Government not transfer them from the RDAs to local councils? 

Jack Dromey:  Because in all the examples that I just gave—I shall not go back through them—there was intensive dialogue and partnership between local authorities, the private sector and others to arrive at conclusions, and then to drive through those admirable objectives, all of them in the best interests of the local economy. We are strong believers in effective partnership between the public and private sectors. What we want to do—let me say this for the final time—is try to make the new arrangements work. 

Business organisations nationally, employers big and small across the English regions, and the LEPs have all been saying in different ways, but with one voice, that they want the Government to give the LEPs some teeth to do their job and to promote economic growth, so our proposals are focused on listening to local people, local councils, and local businesses, as well as their representative organisations at national level. I stress once again that they are practical proposals to enable LEPs to access the funding, resources and levers that they can use to become successful bodies. In short, we want LEPs to be given the tools to get on with the job. LEPs should have clear roles in agreeing spatial strategies and in working with local authorities to co-ordinate planning, housing, economic development and transport functions. 

We ask Government Members to support the new clause, so that we can provide a proper basis for LEPs and give them the powers to deliver economic growth. We hope that it will be the first building block that the Government need for a coherent policy on local and regional economic growth and development. 

In conclusion, the open-mindedness demonstrated by Ministers the other day when we discussed the duty to co-operate and how we will make that work was refreshing, and we welcome it. We hope that Ministers will be equally open-minded on this issue. Whatever our views about the past, we are all committed to making the future work. The new clause does precisely that. 

The Minister of State, Department for Communities and Local Government (Greg Clark):  It is a pleasure to be back after last night—a shorter night than we might have expected, Mr Amess. I detected the enthusiasm for localism of the hon. Member for Bradford East, and it was perhaps uncharitable of an hon. Friend to wonder whether the “local” that he had in mind was a visit to his local pub this evening, after the rigours of a week in Westminster. It is always good to hear from him. I have to say to the hon. Member for Birmingham, Erdington, that I have heard my right hon. Friend the Secretary of State called many things, but a fox is a new one; he will be pleased to hear that. 

I understand that this is an opportunity for some points to be made on more wide-ranging aspects of RDAs and LEPs, but I remind the Committee that in this clause we are debating the planning aspects of local enterprise partnerships and whether they should be given formal status. As the hon. Member for Birmingham, Erdington, and my hon. Friend the Member for Bradford East have raised the subject, let me say a bit about the thinking behind the creation of LEPs and explain why the amendments are not compatible with the approach that we have taken from the outset. 

The issue is summed up in the Opposition’s new clause 8, which begins: 

“For the purpose of this section England may be divided into economic areas”. 

That captures the essence of the difference in thinking. We are not taking an approach where England may be divided, either by the Government or by some other high-level body sitting around a map, as it were, and determining how England is to be carved up. Our approach is precisely the opposite. That is the approach that was taken in the creation of the RDAs, and we have had a useful discussion in recent days about some of the anomalies of having those imposed administrative boundaries. 

I accept the charge that ours was a new approach; indeed, I welcome it. I regard it as innovative. Rather than do the usual thing, and have Ministers and officials sit down and divide England, we decided to invite communities and businesses across England to describe for themselves the economic geography that they consider most relevant to their circumstances. That approach raised some eyebrows when we put it forward. It was different from the experience of how these things had been done. However, many Members here—this was reflected in some of the Opposition’s speeches in the last sitting—have been impressed with proposals that have emerged in response to this invitation. The LEP in the constituency of the hon. Member for Birmingham,

Erdington, has proposed a fantastically vigorous set of arrangements; the same goes for the Manchester area covering the constituency of the hon. Member for Worsley and Eccles South. Kent, which is my own area, and Essex and East Sussex recognise a commonality that was not available to them in the previous arrangements. 

10.15 am 

I was born and brought up in Middlesbrough, and one of the fascinating things about the response to the invitation there is that businesses in the Tees valley, when given the opportunity to revisit and revise the north-eastern set of regional arrangements, made a strong, clear demand for recognition of their contribution. It has been a tremendously successful example of how, if we trust people and allow them greater self-determination, they will not let us down, but will impress and rise to the challenge. 

Jack Dromey:  On the LEP covering my constituency, the Minister is right that there is a collective determination to try to make it work. That has included me personally trying to persuade some rather cynical people from the business community to get in there and engage. It may not be everything it should be, but we want to make it work. The new clause says: 

“The boundaries of the economic areas for each LEP are to be decided by the leaders of local authorities”. 

Looking to the future, it is right that we recognise that one of the problems with the RDAs of the past was that the regional boundaries did not necessarily make economic sense, in terms of particular clusters in the economy. It is therefore right that there should be greater flexibility, which is precisely what the new clause would provide. 

Greg Clark:  I am grateful for that point, which leads me to my next one. We are agreed that greater local determination of the appropriate area would be fair. 

Mr Nick Raynsford (Greenwich and Woolwich) (Lab)  rose—  

Greg Clark:  Let me address the point made by the hon. Member for Birmingham, Erdington. I will give way to the right hon. Member for Greenwich and Woolwich in due course. 

We can establish that there has been an advantage in people reflecting on the true economic geography. Turning to the question of organisation and what the statutory basis should be, the hon. Member for Birmingham, Erdington, is right in what he describes; my hon. Friend the Member for Bradford East put it in his usual robust way when he said that a LEP is a LEP, and that is very much captured in the amendment. The LEP merely reflects what has been created willingly and voluntarily, so one needs to ask whether there is any reason or requirement to create a statutory variant of something that has happened at the spontaneous invitation of the authorities. 

Several hon. Members  rose —  

Greg Clark:  I shall give way to the hon. Member for Plymouth, Moor View, then to the right hon. Member for Greenwich and Woolwich, and then to my hon. Friend the Member for Great Yarmouth. 

Alison Seabeck:  Vast swathes of the south-west have no LEP, and the 15th largest city in the whole of England is not part of a LEP, despite the fact that business and local government thought that, in the main, a Devon and Cornwall LEP would be the way to go. The Government decided to say no to Cornwall, so Plymouth—we are the economic driver for the south-west—has been scrabbling around trying to find a model that works. We think that we have something, but it has been cobbled together. We have been forced into something with which Plymouth does not feel comfortable. I am not sure whether the idyll painted by the Minister applies totally throughout the whole of England. 

Greg Clark:  The hon. Lady’s part of the south-west may not yet have the arrangement that she has in mind, but that reflects a degree of determination on the Government’s part to not approve, willy-nilly, any arrangement, however defective, that emerges, but to look for strong consensus among local authorities and businesses. The Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), has spent a great deal of time with businesses and local authorities in the hon. Lady’s area, guiding them on the need to co-operate and to recognise that the previous way of operating—of having regard only to previous administrative, traditional boundaries—is not the way to go. I am happy to talk to the hon. Member for Plymouth, Moor View, who might like to meet my hon. Friend the Minister of State, because I think we can give her a degree of optimism about the fact that the arrangements that will emerge and be approved in due course will be very strong indeed. I am optimistic about that. 

Mr Raynsford:  To follow on from the point raised by my hon. Friend the Member for Plymouth, Moor View—surprisingly, we are thinking along similar lines—will the Minister tell us, first, how much of the country is not covered by LEPs? Secondly, how much of the country is still in a state of uncertainty because of conflicting proposals that do not necessarily mesh together? I am thinking particularly of London’s relationship with the Thames Gateway. 

Greg Clark:  I am grateful to the right hon. Gentleman for his intervention. I am in a difficult position because a statement is to be made to the House today on arrangements for London. Looking at the time, I do not think that today’s sitting in the Chamber has started. If the right hon. Gentleman intervenes on me this afternoon, I may be able to describe the arrangements. However, before any announcements are made at questions to the Department for Business, Innovation and Skills, let me say that the LEPs that have been approved to date account for 70% of England’s gross value added, and I suspect that that will be much higher as a result of today’s announcement. Given that the closing date for initial expressions of interest was just at the beginning of September, the fact that a considerable percentage—I do not know the exact percentage—of the country will be covered by strong LEPs is not to be sneezed at. The right hon. Gentleman will see a strong dialogue over the coming months in some of the remaining areas about how to come together to form LEPs. We may be able to reflect, perhaps even later during proceedings on the Bill, on progress in that regard. 

Brandon Lewis (Great Yarmouth) (Con):  In light of what has been said, my right hon. Friend the Minister and the Committee might be interested to know that some of the LEPs are keen on the flexibility that the Bill provides and do not want to be prescribed to. In fact, the New Anglia LEP chairman told me yesterday that 

“for LEPs to succeed they need to retain as much flexibility over form and function as possible”, 

and that a one-size-fits-all model would not work. He specifically said that the LEP would be against legislation and prescribing in that way. He went on to say: 

“Different parts of the country require different approaches and as business leaders, we believe we are best placed to determine what the priorities and focus of our LEP should be.” 

Although LEPs want to be part of a consultation on planning, they do not want things fixed in legislation, prescribing their area of expertise and work. 

Greg Clark:  That is exactly right. 

Mr Ward  rose—  

Greg Clark:  Before I give way to my hon. Friend, let me respond to points raised by my hon. Friend the Member for Great Yarmouth. The Committee will rise in two minutes, so let me answer his points first. The arrangements have been made voluntarily. Do they need to be in statute? We considered that question when drafting the Bill, but the overwhelming conclusion from everyone we spoke to was that there was no reason for that. We are not talking about creatures of Government—bodies that are there, as the RDAs were, to act as branch officers of Government. 

That is why the Local Government Association, for example, is clear that it opposes the new clause. It says that it will strongly resist any further requirements to set up a statutory basis. It adds that such requirements would tie up precious time and resources in a way that was unnecessary. My hon. Friend the Member for Great Yarmouth is right, and the chairman of the LEP in his area has also written to me to say that it would be 

“concerned if there were measures introduced to prescribe what LEPs should and should not do.” 

To paraphrase, they should have as much flexibility over form and function as possible. 

The Royal Town Planning Institute also considered the matter seriously and with an open mind. It said that it had 

“considered whether LEPs should be statutory bodies and has concluded that the main responsibility for strategic plans” 

must continue to lie with the democratically elected local authorities. The issue has therefore been reasonably considered. It is perfectly fair to ask whether there would be some advantage in setting up a statutory reflection of what is the case in practice, but people have come to the conclusion that there would not. 

Mr Ward:  If LEPs are everything that Members on both sides of the room agree we want them to be—if they cover the whole country and are very successful—there will still be no duty to co-operate. 

10.25 am 

The Chair adjourned the Committee without Question put (Standing Order No. 88).  

Adjourned till this day at One o’clock.