Tuesday, 24 August 2010

Local Enterprise Partnerships

During this past week there has been a vast amount of comment being made about the forthcoming launch of Local Enterprise Partnerships (LEP) which the Government has announced will replace the Regional Development Agencies (RDA) during 2012. The RDAs have had a chequered history as have other agencies that are being scrapped by the new Government in its bid to cut the expenditure plans from what they perceive as unnecessary gatekeepers for public funding.

This blog is not going to make a comment on the rights and wrongs of the scrapping of the RDAs since I am ambivalent about them - they have been costly and overly bureaucratic, and at times in my own dealings with them have actually totally lost sight of the funds and the end-uses; but they have also been able to act strategically across a region which has sometimes been immensely beneficial.

In the time beyond RDAs we will have LEPs; these we are told will be made up of councillors and of business leaders, led by the Council Leaders and they will have a geographic coverage to suit local needs but will be based largely on the major cities of England (Scotland, Wales and Northern Ireland having devolved administrations will thus be able to think and act in a regionally strategic way, but not so England). They will, we are told, be able to cover natural economic areas. I have to report that I am deeply unhappy about these airy fairy definitions and have, elsewhere, predicted that in all likelihood the development of LEPs will pass through a number of stages before it is realised that they will not deliver effectively to many places and eventually they will go the way of the RDAs, but with less dignity.

The first stage, which is where we are right at this moment, is the horse-trading stage. Following an invitation from Government, local authorities up and down the land are pausing to consider the best approach to the problem - if any. They are considering the problem of critical mass, to address the strategic planning issues; they are considering bids merely on a lone borough basis to offset the potential loss of influence if the more dominant neighbour in a city region becomes the dominant partner in the local LEP; they are even falling out with each other as they draw up newly imagined boundaries between 'natural economic areas'. Imagine, the Government believes that there is an actual definable concept as a 'Natural Economic Area' within the scales that the LEPs will be working. I wonder how those LEPs with multiple local authorities in membership will divide the council representation, and will the Leader of the Council that is dominant in the particular 'City Region' automatically be chairing the LEP? What when Eric Pickles vision of elected Mayors for all is a reality, will we have the likes of the Mayor of Barnsley battle it out for supremacy with the Mayor of Rotherham whilst both looking over their shoulder for the better equipped Mayor of Sheffield?

The second stage will be the introduction of the 'business leaders into the equation - I have yet to find an easily indentifiable 'business leader' who would, in my mind, be those who have made significant sums of money in their businesses or contributed significantly to the development of a tangible business idea or area, or have a proven track record in understanding the economy in their geographic area and the ability and erudition to champion the issues. My guess is that the 'usual suspects' in any area will be brought on board in the same game of jobs for the boys (or girls) but in a less prestigious location than the current RDA office facilities. How these people will be selected and how their performance measured is seriously unclear.

The third stage will be more horse-trading - where the pet schemes of the principal stakeholders of the LEP will be aired and haggled over to determine which of them will be most likely to gain the most value for that particular LEPs share of the £500 million pot. Naturally these decisions will be scrutinised but to what extent remains a mystery. Currently the monitoring is done by a range of organisations - too many in fact, but they include the Audit Commission (do you remember them, they were set up to monitor local authorities in the wake of the excesses of Liverpool City Council during those heady years of the Derek Hatton era - but they are being axed, so Derek could make his comeback on an LEP any time soon!); the RDAs own monitoring teams (but, of course they'll be gone); the Government Offices in the Regions have done some of this work (but, hang on, they're being scrapped too!); so it'll all be down to Whitehall then - that's Ok then, we know how they never get it wrong.

The fourth stage (which could start even before the third stage) will be the problems of the administration of the funds and the servicing of the LEP itself. It will not be funded for its own organisation, so the constituent local authorities will have to service them and provide the administration support. In a period of severe fiscal constraint in the town halls this must have an impact - something must suffer. I fully understand and acknowledge the statistical arguments about inefficiencies in local authority administration that have been much discussed in the press during the past few weeks - I am wondering how this will help in that regard. The councils are already giving notice that jobs will be made redundant, even before the autumn review that the Government is undertaking. So there is a double whammy - have fewer people and have them double up for the LEP.

Then the fifth stage - the bit where the work of the LEPs begins to be measured. This will be the bit where the publicly announced spending plans will become an actuality. Remember that the only PR people will be those employed in the reduced PR departments at the competing town halls - it will be interesting to see what happens, especially when the high profile projects fail to materialise - and that is not a cynical swipe against the proficiency of the embryonic LEPs but a pragmatic expectation that with complex projects things can go wrong, and statistically somewhere it is highly probable that a high profile project will fail.

The Government is taking away Quangos and replacing them with - well, Quangos on the cheap! It will be of immense interest to dispassionate spectators to see how the competing interests and aspirations between the local authority members of these bodies will compromise; it will will be similarly interesting to see how strategic regional planning takes place in this environment. As a perfectly passionate spectator I have no less interest but may be considerably more alarmed at the potential for real problems.