|England’s new regional growth bodies are subject to a “misguided” funding policy from central government that is jeopardising their role as the “engine of local growth”, MPs have warned.
“We have to build the stadium,” says Alex Pratt. “It’s the businesses’ job to win the matches.”
Mr Pratt, founder of lighting products company Serious Brands, is also chairman of the Buckinghamshire Thames Valley Local Enterprise Partnership, one of 39 new regional bodies charged with being the “engines of local growth”.
“It’s down to us to have the right railway stations in the right places, make sure there’s fast broadband available and that companies can access the right skills – the stuff that allows wealth creators to get on.”
The problem, according to a report by MPs published today, is that those aims risk being jeopardised by a “misguided” approach to LEPs from central government.
LEPs – business-led organisations which replaced the controversial Regional Development Agencies two years ago – are being expected to deliver “long-term growth” without the resources to doso, the Business, Innovation and Skills Committee said.
The MPs also criticised the Government’s “hands-off” approach to monitoring LEPs’ performance despite the fact that they are being given taxpayers’ money and are responsible for key areas such as local infrastructure, planning and job creation.
Adrian Bailey, chairman of the committee, said: “LEPs receive considerable amounts of public money from central government. Being free to react to local issues does not absolve them of accounting for how it is used.”
LEPs are loosely formed partnerships between businesses and local authorities that cover the whole of England. They were originally supposed to organise their own funding to avoid repeating the expense and bureaucracy associated with the now defunct RDAs.
However, the Government responded to warnings that this was putting their impartiality and even survival at risk, by providing core running costs funding for the next two financial years. Despite this, Mr Bailey said “the current funding commitments fail to provide... [LEPs with] the confidence to make long-term investments”.
The committee called for five years of Government funding to allow LEPs to “drive the local economic growth on which national growth relies” and for more flexibility in how this money is provided. They also called for a single Government minister to be given responsibility for LEPs.
In his influential report on local growth last year, former deputy prime minister Lord Heseltine said LEPs should be given more power and funding. He envisaged beefed-up organisations driving a shift of power to local businesses and communities and away from central government – ultimately rebalancing the economy.
Mr Pratt said the bodies are “up for stepping forward” to fulfil this role. However, he added: “Who is owning this policy? It’s Lord Heseltine’s thinking but he’s outside government.”
He is planning to write to David Cameron, the Prime Minister, on behalf of England’s LEPs asking for a more coherent approach from Government. “We want to play a bigger role but we need someone on the inside as a champion. If we want to make a big change, let’s work through it together,” he said.