Wednesday, 16 November 2011

Localism Act and LEPs

I have been trying to understand how the Localism Act will impact on LEPs.

One of the key measures to increase the power of local government through the Act is by opening the door for the transfer of power to our major cities to develop their areas, improve local services, and boost their local economies, specifically to promote economic development or wealth creation. 
Further powers can be devolved to core cities at their request, without the need for additional legislation.

As I understand it there are 8 core cities.

Core CitiesLEP
BirminghamGreater Birmingham and Solihull
BristolWest of England
LeedsLeeds City Region
LiverpoolLiverpool City Region
ManchesterGreater Manchester
NewcastleNorth Eastern
NottinghamDerby Derbyshire Nottingham Nottinghamshire
Sheffield Sheffield City Region

It will be interesting to see what powers are requested and by whom.
It will also be interesting how the role of elected mayors fits into LEPs. As 11 cities will be able to decide whether or not to have an elected Mayor.

Sunday, 13 November 2011

LEP and other funding update

There are a few new funding sources / amouncements that are worth capturing.

Growing Places Fund

The Growing Places Fund will provide £500m to enable the development of local funds to address infrastructure constraints, promoting economic growth and the delivery of jobs and houses.  Information can be found here:

Things to note:  LEP areas have been allocated an indicative distribution, subject to successful completion of a pre qualification questionnaire due on 20th December.  Buckinghamshire LEP has an allocation. This is subject to Ministerial approval of the local enterprise partnership proposal. It would seem that the 39th LEP is imminent.


Regional Growth Fund Round Two

There were 119 sucessful bids announced http://www.bis.gov.uk/policies/economic-development/regional-growth-fund/successful-2nd-round-bids but some bids have more than one project hence over 150 projects are listed.

In addition some other sucessful bids have also been announced eg Princess Yachts and RBS, NatWest and HSBC have agreed to facilitate the distribution of the £95 million - which is part of the government’s RGF to SMEs  http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=421994&SubjectId=2

Business Growth Fund

Apply Investment Criteria

•Target companies that demonstrate a strong growth trajectory and have a turnover between £5m and £100m
•Offer investments of between £2m to £10m in return for an equity stake in the business and a seat on the Board
•As Board Members, contribute business guidance as well as capital for growth
•Invest over the long term - five to seven years or more; and
•Consider investment opportunities across all sectors apart from financial services and real estate.


Tuesday, 1 November 2011

Why other LEP analysis doesn’t reflect the full picture: first round Local Enterprise Partnerships one year anniversary the real story

The original 24 Local Enterprise Partnerships were announced a year ago on 28th October. The Centre for Cities produced a report on LEPs to coincide with this date which looks at the progress of the first round of LEPs. In essence the report suggests that LEPs have made little progress over the last year and this is indicative of their underperformance. The report can be accessed via this link http://www.centreforcities.org/one-year-on-and-local-enterprise-partnerships-show-limited-progress.html.

I take issue with this report.

Figure 1 of the report looks at a number of variables which are suggested to be judging performance.

Having a shadow Board was one approach some LEPs took whilst recruiting a full Board. Having or not having a Shadow Board just looks at governance arrangements. It doesn’t represent progress as it is not a necessary step.

Another measure used was having a Board recognised by government. Not all LEPs have had their Board recognised by Government. This isn’t to say the Board doesn’t exist and wasn’t recruited using an open and honest process. Rumour has it that government won’t recognise an all male Board. Once again whether or not a Board is recognised by government isn’t representative of the Board existing and taking decisions.

All LEPs will have indicative priorities / strategy. In order to become a recognised LEP a prospectus had to be put together for government and part of this included what the LEP will focus on. Whilst I accept that this information might not be easily available, or indeed public it doesn’t mean it doesn’t exist. I would suggest that some LEPs could do with improving their communications, but this doesn’t mean strategic decisions are not being taken.

Enterprise Zones were bid for through a competitive process. A LEP area which doesn’t have an Enterprise Zone doesn’t mean the LEP has failed to achieve this it is more likely that geographically and politically the area is less suitable. Not all LEP areas even bid for EZ status. Also where a LEP wasn’t successful in achieving EZ status, new local freedoms mean that action can be taken. Accelerated Development Zones can be created http://www.thisisstaffordshire.co.uk/Plan-create-1-200-new-jobs/story-13709414-detail/story.html

In one sense it is true that there may be a two tier LEP structure developing. There are LEPs that have Enterprise Zones, Regional Growth Fund round one and two success and established partnership arrangements which will give them an advantage over other LEP areas without the joint working history or money and projects which can be used to lever in private sector support. The LEPs without these things I believe will still be able to make an impact. It might just be a bit harder to maintain private sector interest.

Having a dedicated website cannot be used to judge a LEPs performance. The South East LEP for example does not have a dedicated website but does through Essex County Council webpage’s contain some of the most through and timely information of any of the LEPs and probably is saving a lot of money through this approach http://www.essex.gov.uk/Business-Partners/Partners/Local-Enterprise-Partnership/Pages/Default.aspx  I particularly value the weekly Board updates.

The South East LEP http://www.essex.gov.uk/Business-Partners/Partners/Local-Enterprise-Partnership/Documents/South_East_LEP_making_progress.pdf, New Anglia LEP http://www.eadt.co.uk/business/new_anglia_and_south_east_lep_chiefs_defend_partnership_s_performances_1_1110798 and Teesside LEP have defended their progress http://www.nebusiness.co.uk/business-news/latest-business-news/2011/10/28/teesside-lep-hits-back-after-report-blasts-progress-51140-29677836/ I am sure others have too.
I also like the Coventry and Warwickshire LEP area League Tables http://warksobservatory.files.wordpress.com/2011/10/local-enterprise-partnership.pdf  but it should be remembered that this is looking at stats based on LEP geographies.

The problem with comparing LEPs is that you are not comparing like with like. They have different priorities, are different sizes, have different histories and different needs.

There is a lot of good news for LEPs.

LEPs are currently spending Start Up funding to for example get business plans, Bbards recruited and trained, websites and other comms in place etc this should level the playing field by the end of March 2012 of all the 38 LEPs.

First round capacity fund is also being spent by LEPs. Second round capacity fund will be announced soon with funding available from 1st April 2012.

Regional Growth Fund round two has just been announced. Four LEP (Leeds City Region, Greater Manchester, Solent, Cornwall and the Isles of Scilly) bids were successful.

Leeds City Region secured £13.2m of funding for a package of nine projects that fell below the £1m threshold for individual RGF bids. This programme, Unlocking Growth in Advanced Manufacturing, along with other successful bids endorsed by the LEP brings the total funding secured by Leeds City Region to £32m, which is expected to unlock £257m of private investment and help create and safeguard 4,000 jobs.

Greater Manchester LEP’s bid into the RGF was £89m to secure a further £615m of investment and deliver 12,900 private-sector jobs directly, 11,500 indirectly and safeguard 2,470. The application was based around a programme of projects linking to themes of infrastructure in key investment locations, growth through innovation and technology, and high-growth businesses. Further details of which elements of the bid were successful are expected to emerge later this week.

Solent LEP also submitted a successful bid, entitled Bridging the gap: RGF Funding for SMEs in the Solent. The funding will allow the Solent LEP to manage a fund that new start-up businesses and SMEs looking to grow can bid into on a competitive basis.

Cornwall and the Isles of Scilly LEP secured £13m from the RGF. This is to attract additional funding that will create a £43m programme to directly create or safeguard 3,200 jobs and indirectly create 2,100 jobs. The funding will be split into two

Above RGF section was taken from the October LEP Network Newsletter https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B5Vdxsrk2JSvNmRmN2I0OTMtZDVmZi00OTA5LWJjNmYtMGU0MWI2MTE3NmU2&hl=en_US&pli=1

Other LEPs supported RGF bids in their area.

LEP sector groups are being established, some of which have already met. For example there is a Rural Network and a National Automotive group. Soon there will also be one on Aerospace.

In the next few weeks the Growing Places Fund will be offered via prospectus to LEP. This is a DfT, DCLG and HMT pot.

There is currently a consultation on how the Government can put in place a structure to fully devolve decisions and funding for local capital transport improvements from April 2015 to a number of "local transport consortia," each made up of a number of LEPs and their constituent local authorities.

LEPs it seems will have a fuller and more varied role going forwards, given the developing roles of LEPs I believe they will make a difference and have made lots of progress over the last year.