Press Story

ippr north has published a short position paper which argues that, for LEPs to be successful, the following four tests must be passed:

1. Empower the sub-national level
The role of central government should be to respond to the aspirations of LEPs, removing barriers to the achievement of their economic vision.

This will require all central government departments to be committed to devolving powers. A key test of empowerment will be whether LEPs have access to meaningful mechanisms to resource their activities. Clearly the Regional Growth Fund will have a role to play, but LEPs should also have the option of raising revenue to help pump prime and secure other investments.

2. Further social justice
LEPs should further social justice as well as pursuing economic growth.

For most people, work remains the best route out of poverty, but in some parts of the UK - particularly parts of the North - availability of jobs remains a challenge. LEPs should not be afraid of supporting measures to boost demand in the labour market, but they will need the appropriate tools to achieve this. The centralisation of the Regional Development Agency's inward investment, business support and innovation functions is a backward step in this respect.

3. Pass a "functional economic areas" test
Groups applying to be LEPs must be able to demonstrate convincingly how their proposed grouping corresponds to a "functional economic area".

Government has requested LEPs correspond with functional economic areas. These are difficult to define as their boundaries depend on the activity being studied. But they are important because they enable effective land use allocations, for example avoiding duplication by adjacent local authorities. LEPs must be able to demonstrate that they correspond with a functional economic area, and government must reserve the right to refuse LEP proposals that do not. In these cases support should be provided to build the capacity of partnerships that better match a functional economic area.

4. Pass an accountability test
There should be clear lines of accountability back to the electorate

It is right that LEPs should develop their own governance structures that are workable for their area. Nonetheless, it is essential that the lines of accountability are clear. Furthermore, central government should set out an expectation, without being prescriptive, that greater powers will require a greater degree of accountability and formal governance arrangements. There is a limit to the powers that can be exercised by a voluntary partnership.

ippr north Director Ed Cox said:

'LEPs will be in the vanguard of sub-national economic development. As such it is vital that they are strong and powerful bodies that are able to make a real contribution not only to economic development but also to advance the causes of localism and social justice. We believe that if LEPs meet our four tests they will have potential to do just that.'

Notes to editors:

Vince Cable and Eric Pickles wrote to local authorities inviting them to put forward proposals to become Local Enterprise Partnerships on 29 June. A copy of the letter can be viewed here: http://www.communities.gov.uk/documents/localgovernment/pdf/1626854.pdf

Four Tests for Local Enterprise Partnerships by Katie Schmuecker and Michael Johnson will be published online at www.ippr.org/ipprnorth on Monday 6th September 2010.

Contact:

If you would like an advance copy of the paper please contact Tamsin Crimmens, Media and Events Officer, ippr north by calling 07800 742 262 or emailing t.crimmens@ippr.org