Written evidence from Essex County Council
SUMMARY
1. Essex County Council welcomes the opportunity
to respond to the Committee's call for evidence. As one of the
largest local authorities in the United Kingdom, serving a population
of 1.4 million with a local economy worth £22 billion, we
have long felt current regional structures were inappropriate
and welcome the Government's commitment to develop new means by
which to support local economies.
2. The current economic climate and the
need to address the fiscal deficit require new ways of working.
Local strategic leadership allows for economic priorities to be
tailored to the needs of the local economy leading to a rebalancing
of the wider economy towards the private sector. The partnering
of private and public sector organisations would provide the optimal
environment for business growth and the wider issues facing local
communities.
3. Essex County Council (ECC) wishes to
submit the following response to the Committee.
RESPONSE FROM
ESSEX COUNTY
COUNCIL
The functions of the new Local Enterprise Partnerships
and ensuring value for money
4. ECC supports the replacing of the Regional
Development Agencies with business-led Local Enterprise Partnerships
(LEPs) that will work to promote local economic growth. Putting
leadership in the hands of business communities is critical to
ensure that LEPs have the correct priorities to meet the needs
of their local economies. ECC is therefore keen to see business
leaders as Chairmen of the LEPs to ensure focus on the local economy
throughout LEPs' programmes.
5. ECC supports the Government's wish to see
LEPs have significant economic weight and operate at a spatial
level that matches the real economic geography on the ground.
Although there is no universally applicable approach, we agree
with the point that single authority LEPs may not be in a position
to prove that their spatial composition reflects both economic
geography and cost effective administration but would contend
this might also hold true for combinations of authorities of insufficient
size and scale. A smaller scale LEP, whatever form that takes,
may struggle to compete with a larger LEP as well as fail to tackle
unnecessary bureaucracy.
6. A broad remit would produce effective
LEPs that can address the challenges faced in building stronger
local economies. ECC is keen to see the role of LEPs include policy
areas beyond those of the traditional economic regeneration functions
and thus to consider planning, housing, transport, infrastructure,
tourism, low carbon economy, employment and skills. Accordingly,
functions could include developing strategies for economic development
and regeneration, attracting funding to the local area, lobbying
government on behalf of local businesses, providing business support
and advice, helping to shape local transport strategies, influencing
post-16 education, promoting innovation among existing companies,
promoting workforce training, and providing a voice for local
businesses in planning decisions. The ability to shape delivery
is critical; LEPs must not become mere talking shops.
7. ECC supports strong local leadership and
as such backs the combination of strategic direction with financial
capacity to commission services from a range of providers across
the full gamut of economic activity. In order to support local
business leadership in the local economy, it would be beneficial
for the local public sector to gain the relevant powers to facilitate
LEP activities. ECC supports the transfer of functions and associated
funding from Regional Development Agencies to LEPs where appropriate,
and believes that LEPs would be a more appropriate level at which
to set economic priorities for the area.
The Regional Growth Fund, and funding arrangements
under the LEP system
8. In relation to funding, ECC supports a project-based
funding relationship between the Regional Growth Fund (RGF) and
LEPs, that would operate according to a bids system. This would
allow for funding to be allocated on the basis of merit. A grants-based
system with a funding formula would see the majority of funds
move to areas which would produce a lower return on investment.
When the Greater South East provides 43% of all tax revenues in
the UK, it would be regrettable if it were to receive limited
funds due to the use of a formula. ECC would also support LEPs
having an integral role in bidding for central government funding
as well as devolution of certain funding streams from central
government to further enhance the role of LEPs.
9. Akin to the argument already articulated
by ECC of place-based budgeting, the devolution of all local budgets
relating to economic development and transport (such as funds
controlled by the Highways Agency, Homes and Communities Agency,
Regional Development Agency and budgets for major transport schemes)
would give the LEP a substantial remit in the new era of devolution
and local accountability. A broad range of functions allocated
to the LEP would attract a more significant level of funding to
the local area. This pooled funding would ensure the LEP had credibility
among the business community in the county as well as providing
opportunity for meaningful reciprocal dialogue with central government.
ECC would also support funding arrangements from a wider range
of sources including private sector investment.
Government proposals for ensuring co-ordination
of roles between different LEPs
10. The coordination of roles between LEPs is
important. With the Coalition Government committed to the devolution
of power to local communities, it must acknowledge that LEPs will
wish to develop their roles and functions in different ways to
meet the disparate economic needs across the country. Coordination
will be valuable and must be an integral part of work relating
to areas such as transport and waste, but flexibility and versatility
in establishing LEPs' roles are crucial factors as well. ECC recognises
its important links with London, Kent and Suffolk, and as such,
believes that relationships between LEPs should be built where
it makes practical sense to do so, rather than on the basis of
a formal requirement.
Arrangements for co-ordinating regional economic
strategy
11. While there has been a move away from regional
economic strategy, there has been recent progress towards more
meaningful county strategies. The Local Economic Assessment is
informing the development of an Integrated County Strategy—a
vision for Greater Essex held by local authorities and sub-regions
which will articulate shared priorities for unlocking the potential
of Essex as an engine for national economic growth—which
leaves little place for Regional Economic Strategy. This works
to a more relevant geography where economic development makes
sense.
The legislative framework and timetable for converting
RDAs to LEPs, the transitional arrangements, and the arrangements
for residual spending and liability of RDAs
12. ECC would support a quick move towards transitional
LEPs, using existing resource, partnerships and capacity (including
RDAs) to form shadow LEP Boards with business. Only the Greater
South East is globally competitive in terms of UK regions, and
makes a net contribution to UK plc. The timely introduction of
LEPs in the Greater South East—the powerhouse of the UK
national economy—would support not only those local economies
but also the wider UK economy by providing a good return on investment.
Means of procuring funding from outside bodies
(including EU funding) under the new arrangements
13. Bids to external funds will often be more
effective if there are visible strong partnerships between public
and private organisations. The LEP structure should bring together
these organisations to support local economic growth, and as such,
have a greater chance of optimising external funding.
14. Bids for EU funding and negotiations with
the European Commission work most effectively at the regional
level which will require LEPs to work together in creating a strong
collective relationship with Europe. LEPs must not only coordinate
effectively, but must also be forward thinking and proactive in
their dealings with the EU. While flexibility in establishing
LEPs to meet the needs of the local economy is important, coordination
must be considered seriously in order to gain the external funding
necessary to carry out the LEP work programme successfully. Functions
in relation to external funding, as well as transport and waste
as mentioned above, must be aligned between LEPs.
12 August 2010
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