The New Local Enterprise Partnerships: An Initial Assessment - Business, Innovation and Skills Committee Contents


Written evidence from Business Voice West Midlands

INTRODUCTION

  1.1  Business Voice WM is appreciative that the Committee gave Business Voice WM the opportunity to appear before it on 12 October.

  1.2  Further to the Chairman's invitation to provide further clarification in addition to the evidence we have presented to the Committee, this supplementary submission is intended to provide additional details of our stance that we trust would be of benefit to the Committee.

ROLE OF LOCAL GOVERNMENT

  2.1  Local authorities are an important component of the local economy. Its' ability to harness the human and financial capital of a locality to drive local economic growth is of great value and we recognise that the strength of local government in serving their local areas could be enhanced by the introduction of Local Enterprise Partnerships (LEPs).

  2.2  However, LEPs can only operate on the basis of their local nature in helping to drive local enterprise. When it comes to addressing supply chain patterns or providing services that need to take account of economies of scale, LEPs—on their own—are ineffective in helping to develop the UK economy.

  2.3  Therefore, we propose a mechanism is needed as LEPs can come together in the interests of the common good in order to address the business efficiencies that need to be made across complex supply chains in order for economic growth in each locality to be sustained and developed.

  2.4  In addition, such a mechanism can also address a plethora of issues that, due to the local dynamics of LEPs, cannot be addressed at a local level as there are a number of functions that can only be delivered effectively through co-ordination across LEPs because they intrinsically straddle LEP boundaries or are otherwise unlikely to be successful with purely local delivery across LEPs.

  2.5  These functions are explored in more depth in the submission we have sent to the Government which the Committee has seen. In essence these functions can be summarised as follows:

    — Inward Investment.

    — Clusters.

    — Innovation and Technology Transfer.

    — High level and specialist skills.

    — European programmes.

    — Infrastructure.

  2.6  We support the Government in its assessment that economic development structures should be business led. It is business that will drive the economy out of this economic downturn and, while local authorities have a role to play, business leadership is necessary for ensuring a focus on the economy remains.

COLLABORATION ROLE AND THE WIDER ECONOMIC BACKGROUND

  3.1  As the evidence presented to the Committee on 12 October demonstrated, there was near unanimity from most witnesses in the two sessions for some form of collaboration across LEPs to exist.

  3.2  Therefore the debate seemed to be now focusing on whether such collaboration should be given direction or whether collaboration should evolve.

  3.3  We believe that in the current economic environment, when the economic conditions in the West Midlands are particularly serious, whether or not predictions of a double dip recession prove to be correct, there is not the time or space to wait for an evolutionary process to develop.

  3.4  LEPs need to work together urgently if global economic shocks hit the aerospace and automotive sectors, for instance. Active co-operation between LEPs and with the Government would be required in such an eventuality so that the number of potential job losses could be minimised and action can be implemented as quickly as possible to help sectors weather a potential bear market and put in place interventions so that the foundations for growth can be laid. An evolutionary approach would delay the need for such urgent collaboration to take place in a timely manner.

FINANCES

  4.1  Further to the question from Mr Nadhim Zahawi regarding the financial figures contained in our submission to the Government, may we clarify that the figures cited in the document do not refer to a request for new resources from the Government. Instead, we propose that a small proportion of existing public funds could be utilised.

  4.2  Specifically, the figures refer to an estimate of the administrative element of strategic business support that the Government has suggested should be led nationally. We propose, along with the majority of witnesses, that strategic business support, such as the Manufacturing Advisory Service and the Midlands Aerospace Alliance, should be led and delivered in the respective sub national areas.

  4.3  In the case of the West Midlands, we believe that if this happened, this element for administrative support for such programmes can also be used to provide the basis for a mechanism to enable collaboration across LEPs to take place.

REGIONAL GROWTH FUND

  5.1  We are concerned that the Government has set a deadline of 30 December for bids to access the Regional Growth Fund. To assist councils and businesses in preparing their bids for funding, we would suggest that it would be helpful if the deadline was extended, to enable bids to be prepared in the full knowledge of the Government's stance on LEPs and the publication of the Sub National Growth White Paper.

TRANSITION

  6.1  We believe that there is talent relating to many of the responsibilities of the Regional Development Agency which should be preserved and it is currently unclear how this should happen. It is paramount that this matter is resolved.

  6.2  In addition, the issue of the transfer of assets from the RDAs to LEPs is still to be finalised, including whether LEPs would have to carry the burden of some assets which may, because of the current market conditions, be in negative equity.

  6.3  These matters should be addressed urgently in order for a renewed focus on business growth to occur as we are concerned that until such matters are addressed a debate on structures will divert attention and resources away from addressing the economic downturn.

20 October 2010





 
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