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White Paper sets out new local development landscape

29 Oct 10 The first 24 of the new local enterprise partnerships that replace the nine regional development agencies have been announced by the Department for Business, Innovation and Skills. However, they will have to get by on a third of the budget previously enjoyed by the RDAs.

The local enterprise partnerships (LEPs) form part of the coalition government’s strategy for local economic growth, which it claims will encourage business investment and promote economic development.

In September the government received 62 responses to its invitation to form local enterprise partnerships. Proposals covered every part of England outside London. Of these, 24 bids have been asked to progress their proposals to the next stage.

Ministers also opened up the £1.4 billion regional growth fund. LEP’s can bid for funding from this pot, with the first round bids requested by 21 January 2011. The government says that the fund will support the creation of private sector jobs and will particularly support communities dependent on the public sector to  help them make the transition to private sector led growth.

The announcements form part of a White Paper on Local Growth that sets out the government’s approach to “rebalance the economy and drive sustainable growth”.

Business Secretary Vince Cable said: “I was delighted that so many of the proposals for local enterprise partnerships showed real imagination and initiative and a genuine desire to drive local economic growth. I am pleased to announce that we are asking 24 of these partnerships to set up their boards and get to work.

“The knowledge and expertise of the private sector, local authorities and their local communities will be crucial as we work to create a better environment for business and ensure that everyone has access to the opportunities that growth brings.

“The measures set out in today’s White Paper demonstrate the Coalition’s ambition to create a fairer and more balanced economy – one that is driven by private sector growth with business opportunities spread more evenly across the country and between industries.”

Communities Secretary Eric Pickles said: “Over the last decade, the country's economy became skewed by artificial boundaries and top-down prescription that did not work. We want to create a fairer and more balanced economy driven by private sector strength, and our plan for local growth will create local enterprise partnerships, reform the planning system and introduce development incentives for local authorities, like allowing them to keep their business rates, so all parts of the country benefit.

"I am delighted that we can announce today the first 24 local enterprise partnerships to be given the go ahead. Our vision for local enterprise partnerships will help transform the economic geography of the country by creating a new local dynamism that will encourage economic growth and protect business with proper local accountability.“

Chief Secretary to the Treasury Danny Alexander said: “The Spending Review made radical changes to way local government is funded, putting the local and the government back into local government. Now this White Paper paves the way for local authorities to drive growth in their own communities, delivering on our promise to give power back to the people.”

The Local Growth Plan also sets out new incentives for local authorities in England to promote business growth, including:

  • a New Homes Bonus from April 2011 that will match fund the additional council tax raised for new homes for the following six years. £200m has been set aside to fully fund the scheme in 2011-12;
  • looking at proposals for local authorities to keep the business rates they collect locally, reducing central redistribution;
  • a new system of Tax Increment Financing (TIF), which will enable local authorities to borrow against future increases in business rate revenues;
  • a new simple, streamlined and planning system, which will give communities and neighbourhoods more power over decisions, increase investor certainty and help international businesses locate, move within or stay in the UK.

The White Paper also sets out the timetable and further criteria for the operation of the newly-launched £1.4bn Regional Growth Fund. The fund will provide focused investment for projects that offer potential for private sector-led economic growth and sustainable employment.  Lord Heseltine will chair the Independent Advisory Panel, which will consider all bids submitted to the fund and make recommendations to Ministers on which to approve. Lord Heseltine will be supported by deputy chair Sir Ian Wrigglesworth and a panel of academics, business and civic leaders.

Labour's Shadow Business Secretary John Denham called the Regional Growth Fund "a pathetic fig leaf to cover the absence of any plan for growth".

He added: "Regional funding has been by cut at least two-thirds, all key decisions are being centralised in Whitehall, the new Local Enterprise Partnerships are a shambles and leave areas of the country with no effective development organisation, and the voice of business is being ignored on everything from planning to investment and to skills. Regional funding has fallen from £1.4bn a year to £1.4bn over three years and is now expected to pay investment in transport and housing that previously enjoyed dedicated budgets.”

The closure of the Regional Development Agencies (RDAs) was confirmed in the Budget and they are expected to cease activity by March 2012.

The first 24 LEPs are:

- Birmingham & Solihull with E. Staffordshire, Lichfield &Tamworth
- Cheshire and Warrington
- Coast to Capital
- Cornwall & the Isles of Scilly
- Coventry & Warwickshire
- Cumbria
- Gt. Cambridge & Gt. Peterborough
- Greater Manchester
- Hertfordshire
- Kent, Greater Essex & East Sussex
- Leeds City Region
- Leicester & Leicestershire
- Lincolnshire
- Liverpool City Region
- Nottingham, Nottinghamshire, Derby, & Derbyshire
- Oxfordshire City Region
- Sheffield City Region
- Solent
- S.E. Midlands
- Stoke-on-Trent & Staffordshire
- Tees Valley
- Thames Valley Berkshire
- The Marches
- West of England

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