Written evidence from the North West Business
Leadership Team
EXECUTIVE SUMMARY
As an independent group of senior business leaders
in the North West, the North West Business Leadership Team (NWBLT)
welcomes the Government's proposal to create Local Enterprise
Partnerships (LEPs) aimed at rebalancing the economy both regionally
and sectorally. It is in our view essential for measures to be
taken to reduce the UK's reliance on London and the South East
and to stimulate a larger and more dynamic private sector.
We welcome the establishment of a Regional Growth
Fund but believe it will need to be very carefully and strategically
targeted to make a significant and lasting impact.
We have some practical concerns regarding potential
fragmentation in the North West and, to help address broader aspects
of economic development, we consider it essential that the LEPs
be supported by a lean but strong and effective co-ordinating
mechanism. This should take the form of a small, business-led
advisory partnership working from the outset to a shared statement
of overall priorities for enterprise and economic development.
We are also concerned at the prospect of functions
such as business support, inward investment and science and innovation
being centralised in London. In our experience, the efficient
delivery of these functions requires a detailed knowledge and
understanding of local conditions and facilities.
NWBLT members are keen to engage with LEPs in
the North West and play our part as business leaders, helping
to achieve enterprise growth in this part of the country and enabling
this major manufacturing region to make its maximum contribution
to the economy of the UK as a whole. In this submission we offer
some thoughts as to how the North West's LEPs can best support
local economic growth within the context of a coherent, business-led
agenda for the North West as a whole.
The comments made in this submission relate
specifically to the introduction of LEPs in the North West. We
recognise that "one size does not necessarily fit all"
and that our comments may or may not be relevant elsewhere.
INTRODUCTION
1. The North West Business Leadership Team
("NWBLT") welcomes the opportunity to submit evidence
to the Select Committee regarding the proposed Local Enterprise
Partnerships (LEPs).
2. NWBLT is an independent, privately funded
group of senior business leaders, all of whom carry major responsibility
for leading business operations in the North West (see enclosed
current membership list). Our aim is to provide an experienced,
cross-sectoral business view on issues of strategic importance
to the economic development and long-term well-being of North
West England. Over the years we have experienced a number of different
models of governance for promoting regional and local economic
development and this submission draws upon our experience over
the past 20 years whilst recognising the demands of the current
economic climate.
REBALANCING THE
ECONOMY
3. We strongly welcome the Government's
commitment to rebalancing the economy towards the private sector
and fostering economic growth in those parts of the country which
have become too dependent upon the public sector. Some parts of
the North West clearly fall into this category and we naturally
share the Government's concern to address the need for more entrepreneurial
and wealth-creating local economies. It will not be easy for the
private sector to absorb all of the fall-out from the public sector
but we entirely agree that the goal of more balanced and sustainable
growth will only be achieved through a larger and more dynamic
private sector in the regions, with more business investment.
If the UK is to reduce its reliance upon London and the South
East, significant measures need to be introduced to stimulate
enterprise and economic growth in other parts of the country.
POWERS AND
FUNDING
4. It is unclear at the present time exactly
what powers the Government intends to grant to LEPs. We would
like to see these include extensive powers in relation to enterprise
and business development, inward investment, skills, housing,
transport, the transition to a low carbon economy and, where appropriate,
promoting tourism and the cultural sector. We welcome the proposed
creation of a Regional Growth Fund and note that LEPs (and some
other organisations) will be able to bid into this for support
in addressing particular priorities in their area. The scale of
the proposed fund, at £1 billion for England as a whole,
is nevertheless small when viewed against the size of regional
economies (the North West's economy alone is worth well over £100
billion). We therefore believe the fund will need to be very well
targeted at some key business-related projects in specific areas.
We would be keen to support some well-targeted bids which can
make a significant, sustainable and strategic contribution to
economic development.
SOME CONCERNS
5. We have the following concerns regarding
the LEP proposals as they currently stand:
(i) In this region the formation of LEPs is being
based primarily upon Local Government structures and boundaries
which may not fully reflect the real economic geography as it
relates to business needs and future investment opportunities.
We are also concerned that if economic development is chiefly
a local authority function it may prove difficult inpractice for
business to be the lead partner, which we understand is theGovernment's
intention.
(ii) The centralisation of such functions as business
support, inward investment and science and innovation gives us
grave concern. These functions all require, in our experience,
a detailed knowledge and understanding of the relevant area in
order to operate successfully. In relation to inward investment
we would be particularly concerned that the North West would find
itself seriously disadvantaged in comparison with Scotland, Wales
and Northern Ireland, each of which has a substantial organisation
and budget despite having much smaller economies than North West
England.
(iii) We share with our region's Universities
a serious concern over the extent to which vital collaborative
working, in areas such as industrial and scientific research,
may be adversely affected. The loss of funding and support for
the North West Science Council, for major centres of shared excellence
such as the Daresbury Science and Innovation Centre, and for industry
alliances and development programmes such as the North West Aerospace
Alliance and the Energy Innovation Centre are potentially very
damaging to some important industries. The North West's well-developed
and valuable Regional Intelligence Unit would also be much missed
and we share a widely-held view that a closer evaluation of particular
RDA functions would have been advisable before throwing out "the
baby with the bath water".
(iv) There seems to us to be the potential for
considerable wastage of resources during the transition from existing
structures to the new arrangements. We are very concerned that
in some areas resources may be wasted unnecessarily on re-organisations
and the redundancy and subsequent re-employment of staff. Money
is too tight at the moment for this kind of re-organisation to
consume precious resources.
(v) There is a real risk of some particularly
valuable initiatives losing momentum—for example those which
are successfully developing young people, micro-businesses and
other new, creative enterprises. There is a serious danger of
failing to foster tomorrow's business leaders if we do not commit
sufficient support towards nurturing talent, eg through well organised
mentoring support, at the present time.
(vi) Finally there is a concern that the fragmentation
of the North West must not be allowed to lead to a breakdown in
collaboration and co-operation across the North West, as has sometimes
been the case in the past, nor to an undue concentration on short-term
gain as opposed to long-term benefit.
STRUCTURE OF
LEPS
6. The precise geography to be covered by
the individual LEPs is unclear at the time of writing. In our
view it is important that they not only cover natural economic
areas but that they also have sufficient economic and administrative
capacity and relevant expertise to make a real difference in terms
of economic growth. Within the North West we anticipate that capacity
levels, and the nature and scale of the challenges to be faced,
will vary considerably. It is therefore important to recognise
that "one size will not fit all". There is also some
concern as to whether the level of private sector engagement in
some LEPs will be of sufficient stature and experience to exert
real influence over policies and priorities. Given the inevitable
pressures on private industry these days, we fear that it may
be difficult to attract capable, influential business leaders
in sufficient numbers to ensure strong private sector engagement
on all of the LEP Boards. NWBLT can however help, and is already
helping, to mobilise some significant business engagement across
the region. We also believe that appropriate University representation
could help to provide some valuable and relevant expertise within
the LEP Boards.
CO -ORDINATION
7. We believe it will be essential for the
LEPs in North West England to be supported by a lean but effective
co-ordinating authority which provides coherent oversight of such
matters as major region-wide projects, transport schemes, collaborative
research and supply chain issues and European funding programmes.
For the North West as a region to continue its cluster-driven
economic revival it will require a regional appeal, offering combinations
of strengths and opportunities which may cross LEP boundaries.
Housing, transportation, leisure and communications will all need
to be developed on a broader scale to support the resurgence of
Manchester and Liverpool as powerful, internationally-competitive
cities. It will also be necessary for neighbouring LEPs to recognise
the demands and opportunities presented by one another when, for
example, considering the need for investment in skills development
programmes.
In order to ensure that these broader strategic
issues are addressed we would advocate the existence of a small,
business-led advisory partnership comprising independent regional
business leaders together with civic and business representatives
from each of the relevant LEPs. This partnership should at the
outset agree a shared statement of overall strategic priorities
for enterprise and economic development. We would be interested
in discussing further with the Department for Business, Innovation
and Skills how this essential co-ordinating role might most effectively—and
most economically—be performed.
SUPPORT FOR
THE LEPS
8. On the basis of the above comments we
would support the introduction and operation of Local Enterprise
Partnerships. We welcome the model of partnership between local
government and business leaders as a basis for strong, effective
and accountable economic development. Provided they are well co-ordinated
and are granted meaningful powers—including responsibility
for managing their own inward investment and business support—and
the quality of business engagement is such as to overcome the
risks of fragmentation and lack of capacity, we are confident
that we will be able to work successfully with the LEPs to achieve
significant enterprise development.
CONCLUSION
9. NWBLT is therefore encouraging its member
companies to play an active role in supporting and influencing
the North West's LEPs. Member companies of NWBLT—such as
Arup, AstraZeneca, Bruntwood, BT, Grosvenor, Manchester Airport
Group, Peel Holdings, Siemens and Virgin Trains—are already
taking active steps to participate in outline LEP proposals. Others
stand ready and willing to do so. As a group of significant business
leaders who have been closely involved in formulating regional
economic strategy, we have developed a clear and coherent set
of priorities for successful and sustainable economic growth in
the North West. We are confident that, with strong and consistent
direction, Local Enterprise Partnerships will make a very positive
contribution to the economic performance of this important manufacturing
and wealth-creating region and hence to the UK as a whole. Meanwhile
NWBLT will continue to develop its own role of stimulating innovative
and constructive dialogue, and collaborative working, throughout
the business communities of the North West.
13 August 2010
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