Written evidence from Rocket Science and
Rose Regeneration Ltd
1. SUMMARY OF
POINTS
— Whilst the consideration of geographical
boundaries is important it should not be allowed to detract from
the core issue at the heart of the Local Enterprise Partnership
design process—namely the practical economic renewal priorities
LEPs should address. Form will then follow function.
— The most important priority in terms
of geography concerns the need for a clarification on the London
position on LEPs.
— Business engagement and representation
is a key issue. LEPs will need to find a way of getting business
round the table. Businesses will only meaningfully engage with
LEPs if the organisations have "teeth" enabling them
to feel their involvement provides a meaningful expression of
their corporate social responsibility. Flexibilities on local
business rates and influence over support for businesses, including
skills, are examples of potential opportunities that will encourage
the involvement of business.
— Whilst the Regional Growth Fund is important,
it might not be available to all areas, therefore it is important
for LEPs to consider other sources of revenue and investment.
There is an important judgement call to be made in this context,
as to the distribution of assets formerly managed at the local
level by RDAs. Where they are not toxic, consideration should
be given to vesting them in local authorities or LEPs.
— Dialogue between sub-regional bodies
and Government needs to be maintained, but will be difficult with
the removal of regional bodies such as Government Offices. Will
Government need to set up a national LEP panel of representatives
in order to ensure collaboration and good practice?
— LEPs should focus on local issues and
priorities. The previously and now swept away overweening approach
to the direction and management of economic development from the
centre should be avoided.
2. INTRODUCTION
Rocket Science and Rose Regeneration are economic
development and regeneration businesses, providing economic development
and regeneration support to the public, private and third sectors.
In 2008 we formed a strategic alliance to work together with 17
authorities to develop a series of tools, learning, practice and
support for the local government sector to enable them to produce
a Local Economic Assessment as a statutory duty. This work was
funded by the Department of Communities and Local Government and
delivered on behalf of the Improvement and Development Agency
(now known as Local Government Improvement and Development) and
Planning Advisory Service.
We currently provide a "hands on"
service to authorities and their partners in developing their
assessment as well as manage an online learning community of 800
practitioners. There are significant resonances between the Local
Economic Assessment Duty (now under review) and the issues underlying
the development and formation of LEPs. Not least in terms of the
identification of Natural Economic Areas.
On 29 June 2010, Business Secretary Vince Cable
and Communities Secretary Eric Pickles invited authorities and
business to develop proposals for establishing a Local Enterprise
Partnership (LEP) to be submitted to government by 6th September
2010.[72]
A White Paper is due for publication later this summer which may
be too late to help inform these proposals. In view of the short
timescale proposed we undertook an independent consultation with
local authorities on their views for developing a LEP. This took
the form of:
— An online survey which went live on 24
June and closed on 5 July 2010. 69 Councils completed the survey.
— A roundtable event held on 10 August
2010 in London to discuss issues from the local authority perspective
and in particular the role of business. 56 individuals attended
from 33 local authorities. A further roundtable is being held
in Newcastle on 25 August 2010.
In all over 100 local authorities have participated
in this independent consultation and the following evidence submission
provides an overview of the key findings and emerging issues.
3. CONSULTATION
SUMMARY
3.1 The most significant things local authorities
told us during the survey:
— There is a broad consensus about the
importance of Natural Economic Areas (NEAs) as the common denominator
for LEP boundaries.
— There is no significant negativity about
the issue of private sector leadership. Neither is there any consistent
advice or activity within current authority thinking on how this
might be most effectively addressed, to ensure individuals of
the right calibre and quality are recruited.
— Functionally, local authorities feel
that business support and inward investment should be central
roles for LEPs, whilst there is emerging thinking that these roles
might be led nationally. There is clearly scope to join national
leadership and sub-regional delivery up effectively but this is
a key area for early thinking in the development of LEPs.
— There is relatively less enthusiasm for
giving LEPs significant responsibility for planning and transport.
This could be based on an emerging concern that LEPs might become
"mini regional assemblies" by default. It is also a
concern that LEPs may be in danger of trying to focus on too many
things and not on driving up private sector growth.
— In two tier areas there is a danger that
district councils will be marginalised in the development of the
LEP agenda. It is clearly not appropriate to give them a "veto"
in terms of the development of partnerships which will work at
higher geographical levels, but emerging thinking, as in the development
of the current duty to undertake a Local Economic Assessment,
should put an onus on their engagement.
— There is limited enthusiasm for a "big
bang" approach to the development of LEPs. Most authorities
prefer having the flexibility to build pragmatically on existing
structures and arrangements which work. However, there is little
enthusiasm for LEPs to follow current RDA boundaries and there
is emerging evidence of significant interest in LEPs straddling
traditional regional boundaries where it makes economic sense.
— At the time of the consultation, there
was already significant activity underway to prepare the ground
for the development of LEPs, although with a Government commitment
to less prescription, there is a danger that time and effort could
be wasted if LEP proposals do not reflect the ambitions set out
in the forthcoming White Paper. They also have the danger of not
being aligned to the impact of outcomes from the Comprehensive
Spending Review due in October 2010.
3.2 Emerging issues
Following our recent roundtable event, a number
of issues emerged around the findings identified in the survey
and recent press announcements:
— There has been a lot of discussion on
geography and defining NEAs. There is a danger that this takes
up time and could still be inconclusive; the important thing is
for areas to focus on the "ask" and what an LEP should
pitch for and manage.
— The most important priority in terms
of geography concerns the need for a clarification on the London
view on LEPs. Those boroughs that share their Natural Economic
Area with counties in the greater south east will need guidance
on how to approach these relationships outside the confines of
the London boundary.
— Business engagement and representation
is a key issue. LEPs will need to find a way of getting business
round the table. Businesses will only meaningfully engage with
LEPs if the organisations have "teeth" enabling them
to feel their involvement provides a meaningful expression of
their corporate social responsibility. There has been significant
"jockeying for position" by national business fora for
influence in terms of this agenda, whilst this is perfectly understandable,
it should not mask the fact that real change will be most effectively
achieved by participation from actual businesses with a real and
local LEP context. Flexibilities on local business rates, influence
over support for businesses, including skills, are examples of
potential opportunities that will encourage the involvement of
business.
— Whilst the Regional Growth Fund is important,
it might not be available to all areas therefore it is important
for LEPs to consider other sources of revenue and investment.
There is an important judgement call to be made in this context
as to the distribution of assets formerly managed at the local
level by RDAs. Where they are not toxic, consideration should
be given to vesting them in local authorities or LEPs. Local management
and joining up of these with other local resources is likely to
represent better value for money than seeking to sell them to
third parties. This is because the encumbrances and complexities
underpinning them will make their liquid asset value far less
than what might be described as their "indigenous regeneration"
value.
— Dialogue between sub-regional bodies
and Government needs to be maintained, but will be difficult with
the removal of regional bodies such as Government Offices. Will
Government need to set up a national LEP panel of representatives
in order to ensure collaboration and good practice?
— LEPs need to be setting the agenda for
the key performance indicators upon which they would be judged
and measured, and clarity is needed on who will be scrutinising
the performance of the LEPs at national level. LEPs should focus
on local issues and priorities. The previously and now swept away
overweening approach to the direction and management of economic
development from the centre should be avoided.
A final point is that the focus for all areas
has to be on driving up employment growth in the private sector.
As employment in the public sector reduces, areas will have to
focus energies on investing in the private sector where it will
have the greatest impact. This may lead, however, to difficult
decisions on:
— where to focus funding;
— how to make sure that the labour market
is sufficiently connected to those opportunities; and
— how to support local areas where they
may not fit within a tightly defined investment approach.
3.3 Findings from the survey
3.3.1 What should be the key areas of interest
for LEPs?
The letter sent to all local authorities and
business leaders on 29 June 2010 suggested that both inward investment
and business support should be managed nationally. It also hinted
at the development of planning and transportation roles within
LEPs. Our survey, undertaken before the publication of this letter,
indicates strong local authority support for the retention of
a local or sub-regional focus for inward investment and business
support along with limited enthusiasm for more substantively involving
LEPs with planning and transport issues:
Figure 3
CORE AREAS OF INTEREST
3.3.2 What is the most appropriate area for
a LEP to cover?
Our findings show that in the spirit of localism,
the majority of authorities believe it is up to them to lead on
identifying the most appropriate area. Reassuringly, other responses
(when combined), show that authorities will focus on Natural Economic
Areas (also referred to as Functional Economic Market Areas).
Figure 4
WHAT SHOULD BE THE GEOGRAPHIC SCOPE OF A
LEP?
3.3.3 How should LEPs develop?
Authorities and partners are keen to work pragmatically
and avoid "re-inventing the wheel". More than half of
respondents indicated their intention to build on existing partnerships
rather than start from scratch. It will be important, therefore,
for Government to clarify their position soon on the future of
existing formal partnership arrangements such as Employment and
Skills Boards, Multi-Area Agreements and City Regions.
Figure 5
OUT OF THE FOLLOWING OPTIONS, WHICH BEST
DESCRIBES YOUR VIEWS ON HOW LEPS SHOULD BE DEVELOPED?
3.3.4 The challenges for developing LEPs
Undoubtedly LEPs are an opportunity to create
a new environment for private and public sector working. But there
is a challenge around timescales. History and experience shows
us that setting up and running an effective organisation does
not happen overnight. There is often a considerable lead-in time
before an organisation functions at full capacity. Additional
challenges include;
— Resourcing an organisation in a time
of spending cuts and without any current indication from Government
about how it might contribute to the costs,
— Attracting the right skills and leadership
and,
— Partners' commitment to work sub-regionally.
Figure 6
WHICH OF THE FOLLOWING DO YOU THINK WILL
BE THE BIGGEST CHALLENGE IN CREATING A LEP?
Partners will also need to determine the key
role and function of the LEP. The survey suggested agreement on
three areas; 1) pooling of partner resources and distribution
of investment, 2) research and development and—unsurprising
in this climate—3) lobbying Government for resources.
Figure 7
CORE FUNCTIONS OF THE LEP
There is less agreement around delivering programmes
and although 60% either agree or strongly agree that they should
deliver programmes, many of the supporting comments state that
LEPs should focus on being commissioners, rather than deliverers
of services.
3.4 Preparing for the future
The survey revealed that a third of authorities
were working up their proposals with a further third in preliminary
discussions. It is important that Government moves quickly to
set out more detail about the evolution of LEP. When analysing
responses by authority type, district authorities appeared to
be waiting for what comes out of the consultation. Districts will
need to start a dialogue with their upper tier to ensure that
their needs are taken into consideration, by using their influence
through the Local Development Framework, their strategic housing
responsibilities and their access to local businesses.
At the time of writing this report there was
little information about how European Funds would be managed locally
and whether they would come under the role of the LEP. The Government
will need to provide clarification on this as proposals are being
developed.
Finally, authorities were asked to estimate
when they might be able to have a LEP in place and ready for business.
When responses are combined, more than two thirds stated these
could be open within six to twelve months. There is an interesting
balance to be struck here, with RDAs likely to run until March
2012, there is ample time to carefully plan and develop the formation
of LEPs. On the other hand, the transfer of responsibilities and
need to maintain momentum around the proposed changes are persuasive
arguments for moving quickly.
Figure 9
WHEN DO YOU THINK THAT YOU COULD HAVE A LEP
IN PLACE?
3.5 Reflections for the future
We are entering a new era with an emphasis on
localism. This requires changes in thinking and behaviour from
Government to local authorities, civil servants to members, business
leaders and partners—but learned behaviour cannot change
overnight. As we make the first steps to creating LEPs, we must
embrace the opportunity to:
— Challenge the way in which we have done
things in the past,
— Keep what is useful and what works, and
— Create the right structures and conditions
that bring the best of the private and public sector together.
One of the key lessons we have learnt about
managing organisational change is to mitigate "intellectual
flight". Local areas have amassed significant intellectual
capital across their partnerships and organisations. If we are
to deliver on the Government's aspirations for local economic
renewal then organisations have to find a way of keeping the skills
and capabilities they have developed and learn the new language
and behaviours that "less prescription" brings.
In the current rush to save resources and plan
more efficient approaches to service delivery (including economic
development), there is a danger of turning off a number of initiatives
which give legitimacy and add value to the work of the public,
private and voluntary and community sector organisations—organisations
that will have a key role to play in the Localism agenda.
For example, data and evidence collected as
part of the Local Economic Assessment (LEA) reflects the unique
nature of places that will be key to the geographical and service
rationale for LEPs. The current duty to produce these assessments
helps move established and received behaviour in the context of
economic development onto the right agenda using an evidenced
based approach to intervention, thus providing an effective contribution
to the development of LEPs. There is a danger that this duty will
be scrapped in the current "bonfire" of duties and responsibilities.
It should be retained because of its practical value in having
an evidence base to understand the potential and constraints of
local economies and key to informing the investment decisions
and strategic priorities of LEPs.
4. RECOMMENDATIONS
In view of the findings of this consultation
and our work with local authorities we ask that the following
recommendations are reviewed as part of the inquiry.
4.1 The financial context for the operation
of LEPs needs to be worked out as soon as possible. This should
involve;
— Setting out more specifically their role
in terms of the proposed Regional Growth Fund,
— Development of a policy in terms of the
vesting of non toxic RDA managed assets in them or local authorities,
and
— Consideration of whether there should
be universal coverage of England by LEPs and if not, how national
government should support the regeneration priorities (which will
still exist in pockets) in more "affluent" areas.
4.2 The duty to conduct a Local Economic
Assessment (LEA) or a duty for authorities within a LEP to produce
this at the Natural Economic Area level, should be retained as
a tool to baseline and measure the impact of LEP activity on economies
as well as provide the evidence base for investment and strategic
priorities.
4.3 LEPs should be encouraged to deliver,
with Government facilitating support where needed, in tangible
activities that will engage and retain meaningful business engagement
including:
— Influence over local business rates;
— Practical engagement with the commissioning/management
of national programmes at the local level on skills, employment,
specifically the Work Programme and business support; and
— Flexibility to coordinate inward investment
activity either as an individual LEP or as a coalition of LEPs.
13 August 2010
72 http://www.communities.gov.uk/newsstories/newsroom/1626460. Back
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