Leps in driving seat as industrial strategy is unveiled

The government has published the details of its industrial strategy, and put local enterprise partnerships (Leps) in the driving seat for local economic growth.

The 255-page document outlines a series of commitments, which the government claims will help boost productivity, embrace technological change and increase the ‘earning power of people across the UK’.

One of the key measures outlined in the report are local industrial strategies, which will help identify priorities to ‘improve skills, increase innovation and enhance infrastructure’.

According to the document, the government aims to have the first local industrial strategies in place March 2019 and will prioritise areas with the ‘potential to drive wider regional growth’.

In places with a mayoral combined authority, the document states the strategies will be led by the directly-elected mayor and supported by Leps.

In areas without a mayoral combined authority, the strategy will be led by the Lep.

‘We will also discuss the suitability of this approach with the devolved administrations,’ the report states.

Alongside this, the report adds the prime minster will chair a biannual ‘council of Lep chairs’, which will provide an ‘opportunity for Lep leaders to inform national policy decisions’.

The document adds the government plans to review the roles and responsibilities of Leps and bring forward various reforms around leadership, governance and reporting.

‘We will agree and implement appropriate structures for holding Leps to account,’ the report states.

‘We will work with Leps to review overlapping geographies and ensure people are clear as to who is responsible for driving growth in their area.’

The industrial strategy also pledges to create a £1.7bn transforming cities fund to improve transport between cities and provide £42m to pilot a new ‘premium’ teacher development programme.

The chief executive of the think tank Localis, which recently published a report on local labour markets, Liam Booth-Smith, said the decision to give Leps primary control for strategic economic planning was ‘disappointing’.

‘There must be concerns about Leps, rather than councils, gaining the central role in driving local industrial strategy,’ said Mr Booth-Smith.

‘Put simply Leps are not the right groups for this task. Earlier this year communities secretary Sajid Javid told them to ‘take a good look at your corporate governance’ – echoing concerns about their transparency and accountability previously voiced by public spending watchdogs the National Audit Office and Public Accounts Committee.

‘Another concern is the wide disparity in leadership and powers between Lep areas,’ added Mr Booth-Smith. ‘Some do a very good job, with excellent people involved on boards and leading them but others are less well-equipped to leading local industrial strategies effectively, democratically or accountably.’

While the vice-chairman of the County Councils Network and leader of Staffordshire council, Philip Atkins, said counties ‘ought to be in the driving seat to lead local industrial strategies’.

‘County authorities already work closely with their own Leps, but we have concerns they are not always the most effective bodies to dynamically lead local industrial strategies,’ said Mr Atkins.

‘Counties contain the size to do business nationally and the intimate knowledge of their economies to grow communities locally, while offering the democratic transparency that Leps currently cannot,’ he added.

‘Indeed, a recent County Councils Network survey showed that only one fifth of council leaders believe Leps are democratically accountable, while over half believed they should not lead local strategies.

‘However, we welcome the government’s proposed Lep reform, including reviewing overlapping Lep boundaries,’ he added.

The executive director of the Institute of Economic Development (IED), Nigel Wilcock, said the publication of the strategy was ‘long overdue’.

‘The document is clear on the ‘grand challenges’ that we face in terms of artificial intelligence, big data, mobility, ageing society and clean growth,’ he said.

He added the commitments around reforming the role of Leps are ‘encouraging’ and will help ensure they may be ‘properly established to fulfill the wide remit that they have gained’.

‘What wasn’t seen coming by the IED was the need for each of the Leps to create a local industrial strategy to allow the cascading of the national policy,’ he added.

‘At one level this sounds sensible, but most Leps have recently refreshed their strategic economic plans and might have hoped to avoid further strategizing.

‘In common with our view on the budget, the IED now hopes that the industrial strategy provides some consistency of approach and certainty of policy for some years allowing private enterprise to have confidence to invest on the back of it.’

And the author of the social value act and former MP Chris White said the government was ‘missing a trick’ by not addressing procurement in the strategy.

‘The social value act currently ‘shapes’ around £25bn of public sector spending, meaning that we as taxpayers are getting more young people into apprenticeships and more people with disabilities into employment, as well as delivering significant cost savings,’ said Mr White.

‘At present around £243bn of public sector spending is beyond the reach of the social value act. Imagine how much more bang for our buck the country would get if we extended it to cover all public sector expenditure.’

• Read the full report here