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Enterprise zones and the many unanswered questions

Having just read the very recent review of enterprise zones by SQW I feel compelled to add some additional views to those already expressed here and in some respects these echo my earlier concerns and the debate at the recent CLES Summit:

1. Displacement of jobs
‘We suspect that the displacement assumptions may require further verification,’ says the review. This suggests that far less attention has been given in enterprise zone applications to evaluating potential net impacts of initiatives; and more attention ‘getting quickly to the starting post’.

2. Clarity on local benefit
The review suggests that income from the business rates increment is expected to be around £2m per year. However, few applications are clear on how local enterprise partnerships (LEPs) will use the money. How long can this remain the case? LEPs need to provide a clear steer on how they see the benefits of the zone being repatriated within the local economy; and especially on issues such as workforce development, enterprise and employment support.

3. Guidance from government
How will the retention of business rates work in practice and who/how will agencies be held accountable? This appears symptomatic of the government’s paucity of guidance on how LEPs, zones and the Regional Growth Fund should work/operate. This is surely critical, given that some of these require a long-term commitment – 25 years in the case of business rate growth from enterprise zones.

Linked to this last point, I’d really like to hear others’ views on the following:

  • Who decides what LEPs are going to do? Local legitimacy will be important, so the role of councils needs to be clear. Is there really a general lack of consistent steer from HGM departments on how LEPs should operate/be held accountable?
  • People will engage with a body that can do things, i.e. that has resources, fiscal autonomy and legal power. Otherwise there is a danger that LEPs are a marriage of convenience. Should LEPs remain strategic bodies, or should they also be involved in commissioning/delivery?
  • Quick wins will be important – but long-term goals need to clear. Is there just too much pressure to deliver quick wins without making fully informed decisions about strategic priorities? Equally, do LEPs have adequate support to undertake strategic review and evidence gathering on what the long-term priorities for economic development should be?

There are some excellent people and minds out there on LEP boards, but I would hate to see the ‘LEP experiment’ go to waste… what then for future public-private sector engagement in local economic development?

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