Written evidence from the Greater Manchester
Chamber of Commerce
Greater Manchester Chamber of Commerce is the
most prominent and collective voice of business across Greater
Manchester and is the largest in the UK with over 5,300 members
who between them employ 1/3 of the total workforce in Greater
Manchester. The Chamber is well placed to understand the needs
and concerns of the business community as it not only provides
help, advocacy and representation to its member businesses, but
also provides services to another 8,000 non-member businesses.
The Chamber welcomes this opportunity to give
written evidence to the Business, Innovation and Skills Committee
on behalf of our members concerning the proposals for the introduction
and subsequent operation of Local Enterprise Partnerships (LEPs).
Proposals for a Greater Manchester LEP are at
an advanced stage and are the result of several years worth of
established and integrated work between the local authorities
under the auspices of AGMA (Association of Greater Manchester
Authorities) and the private sector, primarily through the Greater
Manchester Chamber of Commerce.
The proposals not only fully address the initial
outline requirements for LEPs from government, as described in
the joint BIS/CLG letter of 29 June, but also identify and make
recommendations that would make the function of a GMLEP much more
effective and relevant for local needs and priorities.
The Chamber is fully supportive of the move
to LEPs in order to help deliver the required private sector growth
and capacity, however we feel that there are significant elements
of the proposals that require further development especially around
the transfer of those RDA functions (inward investment, sector
leadership, business support, innovation and access to finance)
that government proposes to be nationally led in the future. Our
view is that if the LEP is to be fully effective then all services
and functions must be controlled and delivered locally across
the full spectrum of business support needs. To create artificial
barriers at the outset will prove damaging in the long term and
cause confusion at a critical time for the economy. It is vital
that effective business support delivery is at the heart of LEP
activity, our members have been vocal in their demands for a significant
change in the existing arrangements yet the proposals as they
stand at present from government only offer, at best, a half way
house solution. We believe our proposals offer a viable, workable
and transferable solution to this fundamental issue.
There must also be effective transitional arrangements
in place to ensure a smooth and timely handover from RDAs to LEPs
and it is vital that any funding currently earmarked for local
programmes should be retained under local control and not be transferred
to and between central government departments.
The following section identifies in detail the
key areas and topics for the committee in addition to expanding
on other issues described above.
3.0 ISSUES FOR
3.1 Functions of a Local Enterprise Partnership
including revised proposals for business support and capacity
We fully agree with the guidance from government
that the priority aim of the current formation process for LEPs
should be on the purpose and functions rather than the structure
and governance. We also agree with the geographical basis for
LEPs being functional economic areas rather than specific local
From the content of 29 June letter and taking
into account that LEPs have their origins in the demise of the
RDAs, there are five functions that have been identified as being
best led nationally. These are inward investment, sector leadership,
business support, innovation and access to finance.
Current proposals identify that LEPs will be
able to create the right environment for business and growth by
tackling issues such as housing, planning, local transport and
infrastructure, employment, enterprise, the transition to a low
carbon economy and business start-ups.
At the time of the letter from BIS and CLG it
was anticipated that further details on the function of LEPs would
be set out in a white paper that was expected to be released in
summer. Latest information now suggests that this has been delayed
until late September/early October. This will be too late for
the initial LEP proposal deadline of 6th September and also be
too late to have any real effect on the CSR which will be released
on 20 October.
In the absence of a formal mechanism to respond
to governments initial proposals we would welcome the opportunity
to raise our suggestions as to how a significant number of core
functions of a LEP could be more effectively delivered and incorporated
into a cost effective and comprehensive local business support
To be truly effective and deliver what will
be needed to support the required private sector growth, LEPs
must have as much control over all elements of business support
as necessary. Whilst current RDA functions may be run nationally
in the future, there must be a workable and effective structure
in place to ensure that LEPs have as much control as required
to ensure successful local delivery. This must be available to
areas where LEPs exist and are effective and may take the form
of a sub-contract or tender model. Where areas have no LEPs then
neighbouring LEPs or other contractors should be allowed to deliver
the service. Whilst there must be consistency in the quality of
the service it should be recognised that areas have different
needs and requirements and flexibility must be built in so that
individual LEPs may be allowed to tailor elements of the function
in order to achieve a satisfactory service delivery. Any attempt
by central structures to control the local delivery of any service
or programme will weaken a LEPs ability to deliver on its remit.
Tailoring support to meet identified needs,
linking policy strands closely within LEP areas and ensuring that
business support, skills and employment are linked together and
not delivered in isolation will further strengthen the ability
of LEPs to successfully deliver economic growth.
In Greater Manchester the Chamber, with strategic
and delivery partners, has identified a model for the delivery
of all the major elements of business support and growth that
exceed the basic requirements laid out for LEPs at a cost of approximately
1/3 of current delivery. The identified mechanism and model offers
a workable solution to ensure the successful local control and
delivery of the proposed nationally led functions.
In addition to meeting the requirements around
strengthening overall economic growth, this also addresses major
priorities for Greater Manchester as identified within the Manchester
Independent Economic Review around international trade, productivity
growth, inward investment and business engagement and which have
been subsequently included as priority action areas in the Greater
Manchester Strategy and carried forward into the proposals for
a Combined Authority, due to commence in April 2011.
In addition to the ability of delivering effective
support for growth, this model also delivers a true local business
advisor led service, leading to the involvement in fee paying
and co-funded services, which has been absent for the last four
years and has been a source of dissatisfaction for the business
This practical, tailored approach, coupled with
broader strategic issues that the LEP would be responsible for
eg housing, infrastructure, planning would enable a Greater Manchester
LEP to deliver everything required to ensure the continued economic
success of the local economy.
Full details will be included in the GMLEP bid.
3.2 Structure and accountability of LEPs
LEPs should set the economic strategy and delivery
plan for their areas and have a functional Board structure, chaired
by a representative from the private sector, that reflects the
true partnership nature of public and private sectors yet does
not become or is seen to become further strata of organisation
Board members should be seen and acknowledged
as influential leaders who are able to operate successfully at
a strategic level and also take on accountability for their actions
and ultimately the performance of the LEP.
It is important that any operational or delivery
organisations are not hindered or obstructed in the pursuit of
their activity by excessive or poorly thought through governance
3.3 Transition from RDAs to LEPs
The current haste and speed of change is causing
some concern. Whilst acknowledging government's desire to move
quickly on this process to enable action to start to address the
deficit, the danger is that gaps are left in current provision
which may prove detrimental in the medium to longer term.
Questions remain about the potential future
use of RDA assets currently within the region and it is felt that
these must be retained to assist with binding the work and objectives
of the relevant LEPs together.
There is current potential for random cuts to
be made by the RDA to address immediate budgetary issues eg ignoring
the value and impact of projects in favour of cutting spend as
contracts fall due for renewal. This could be damaging in the
extreme and could adversely affect the ability of LEPs to be as
fully effective as possible from the start of their operation.
We would like an early positive decision on
a GMLEP following submission of the proposal on 6 September. Due
to the nature of the importance of the Greater Manchester economy
any hold up or delay to allow other areas to catch up will be
detrimental to the local economy and also ultimately the ability
of the UK economy to move back into full and sustainable growth.
We would expect to see formal approval for a 2011 transition from
the NWDA to a GMLEP.
3.4 Regional Growth Fund
We will be responding in full to the current
Regional Growth Fund consultation however in relation to LEPs
we have some concerns about the potential conflict that may arise
by allowing non-LEP bodies to bid for funds yet still have LEPs
as being the main coordinators of the fund. Recognising the ongoing
consultation on RGF this needs clarification for the avoidance
3.5 Co-ordination of regional economic strategy
and between LEPs
The Chamber acknowledges that co-operation between
LEPs will be a necessity. However the new structure and framework
of LEPs will allow greater integration between non-traditional
areas eg Greater Manchester having the ability to work closer
with other surrounding LEPs some of which may not necessarily
be within the North West.
There is though, in the short term at least,
still a need for an under arching residual body that is a product
of and answerable to LEPs to ensure an effective transition from
current RDA work and to ensure relevant strategic economic and
infrastructure issues are addressed, alongside supporting the
delivery of residual contracts after the RDA has been abolished.
Current proposals in the North West are for this to be undertaken
on a very light touch basis that will give the necessary anchor
point but in no way replicates previous levels of bureaucracy
or control that could stifle innovation and growth And with the
LEPs being very much in the driving seat.
The other major consideration is that LEPs established
with Chambers of Commerce firmly at their centre will inherit
a natural heritage and depth of experience of close working and
co-ordination not just with immediate neighbours but across wider
geographic areas. This is also a fundamental benefit as integration
of services with public funding will help further reduce costs.
Greater Manchester Chamber of Commerce is supportive
of LEPs and is engaged at the highest level with the preparation
for a Greater Manchester LEP.
As a result of this work, opportunities have
been identified for a business support model that would:
be business friendly and hence maximises
the degree to which businesses do things which they would not
otherwise have done;
be delivered at approximately one third
of recent costs but nevertheless deliver a higher volume of businesses
started and assisted and higher growth outcomes;
link directly to the requirements of
the Greater Manchester Strategy;
strike a proper balance between what
Government will do centrally and what must be led and delivered
locally such that we work together with national programmes (eg
be integrated with business funded services
so as to maximise impact and minimise costs;
be based on the use of advisers for the
majority (but not all) of the programmes; and
retain what is best in the current regional
programmes and structures.
Whilst acknowledging the role and remit of a
LEP is more than just delivering business support we feel that
this is a fundamental issue that needs addressing if LEPs are
to be truly successful and deliver the economic and employment
growth that is required.
We would hope to see Chambers of Commerce playing
key roles in the set up and running of LEPs. This would help bring
in necessary skills in addition to acting as a viable and legitimate
conduit to the private sector.
12 August 2010