Are LEPs ready to roll, or do they need a push?

It’s nearly a year since Vince Cable and Eric Pickles lit the fuse on the local enterprise partnerships with their joint letter to business leaders and local authorities.

Over the intervening months the shape of England under the LEPs has emerged in fits and starts, as the proposed LEPs have gradually been signed off. Today the total stands at 34 approved LEPs, with white spaces still to be filled in East Yorkshire, part of Surrey and Buckinghamshire, Corby and Wellingborough, and a swathe of the West Country covering Wiltshire and Dorset.

The Centre for Cities published a 6-Step Plan for Local Enterprise Partnerships in June 2010, setting out the key principles we believed would determine their success. Our plan focused on helping LEPs get off to the right start, with appropriate powers, governance arrangements and a clearly defined role. Progress is mixed, but many LEPs are working hard to put their plans in place.

A year later many of these issues are still unresolved, but time is now far more pressing. That’s why we’ve published Sink or Swim: What Next for Local Enterprise Partnerships. We believe the LEPs have six months to answer some crucial questions and to convince business and the third sector that they will be effective, focused bodies which can get things done. LEPs rely almost entirely on goodwill, and the longer they delay the lower supplies will fall.

Each LEP needs to agree its purpose, and we believe the only focus should be on creating jobs and driving growth. Centre for Cities has outlined six levers for LEPs in its report which we feel will give LEPs some of the teeth they need to build credibility and legitimacy with businesses and government over the next six months. There’s a gap in many parts of England at the level of the real economic footprint of cities, which crosses local authority boundaries. Effective economic planning needs to be done at this scale, and it’s a job for the LEPs. The government tasked LEPs with providing strategic leadership to set economic priorities, and creating the right environment for business and growth. LEPs should not turn themselves into delivery bodies, a role which can be fulfilled by other organisations. Proper strategic planning is a crucial task that no-one else is in a position to undertake.

We also believe LEPs need some real clout if they are to be effective. The Budget handed distribution of Enterprise Zone income to the LEPs, providing them with a major financial rationale. However, not every LEP will have an Enterprise Zone and the income will take time to accrue. We believe LEPs need more financial leverage, and that he Local Government Resource Review should allow funds to be devolved from central government to LEPs on areas such as transport and skills, as well as speeding up the introduction of Tax Increment Financing.

LEPs have huge potential, and a small window in which to fulfill it. They could be a new force driving economic development in England, an unprecedented joint endeavour between public, private and third sectors. Or they could end up as another layer of local government, carrying out business as usual. By the end of the year we’ll know how well the LEP concept has worked.