Counties still back LEPs, but fears remain over “fundamental weaknesses”

A survey of county councils has found that there continues to be support for local enterprise partnerships (LEPs), but significant concerns remain over their structuring and accountability.

A survey of 20 authorities carried out by the County Councils Network (CCN) suggested that there was general confidence regarding LEPs’ contribution to local growth and improved economic outcomes, “which is regarded as moderately high across a number of indicators”.

The survey found that:

  • 65% of respondents agreed or strongly agreed that the LEP allowed them to deliver major infrastructure projects in their areas;
  • 43% agreed or strongly agreed that their LEPs would support the creation of new enterprises;
  • 52% believed LEPs had significantly increased the training opportunities for young people;
  • 66% strongly agreed or agreed that LEPs allowed them to develop growth strategies across county borders – "a key policy driver behind their creation".

“These results point to clear support and optimism for the creative impetus and potential of LEPs to instigate private sector-led growth across a number of key areas,” the CCN said.

However, the survey also highlighted a number of problems and ‘policy tensions’ with LEPs, including the “marked variety” in the geographical and economic size of LEPs, board composition, principal areas of activity and governance processes.

The survey found that:

  • 52% of respondents agreed or strongly agreed that their LEPs were poorly structured. “Specifically, qualitative evidence confirms widespread concerns created by the complexity of overlapping LEPs and the feeling in some areas that their LEPs do not reflect their functional economic areas”;
  • 76% agreed or strongly agreed that their LEP/LEPs were democratically unaccountable;
  • 52% disagreed or strongly disagreed that their LEPs provided an accountable decision-making process;
  • 42% disagreed or strongly disagreed that LEPs provided strong or inclusive decision-making;
  • 50% agreed or strongly agreed their LEP/LEPs were lacking meaningful input from local economic leaders generally, including relevant stakeholders from community enterprises, the skills sector and the voluntary sector, as distinct from business leaders in particular.

The research also suggested that there was a widespread belief that LEPs continued to lack capacity, and that the Local Growth Fund lacked sufficient devolved funding. Almost half of respondents agreed or strongly agreed that LEPs were under resourced, while 62% agreed or strongly agreed that LEPs lacked sufficient devolved funds.

The CCN said it had consistently maintained that whilst the Local Growth Fund and City Deals were a welcome first step on fiscal devolution, Government policy must be more reflective of the £70bn target identified by Lord Heseltine in his report No Stone Left Unturned in the Pursuit of Growth.

However, the survey suggested that county leaders remained committed to developing strategic economic plans and positive over the ability of LEPs to deliver improved outcomes through these.

Forty-two per cent were confident or very confident in their plans’ capacity to deliver improvement economic growth, while 67% were confident or very confident LEPs can coordinate funding and investment better than Whitehall departments.

The network set out six principal recommendations in the report. These were that:

  1. Government must recognise that LEPs’ success in delivering growth activities fundamentally relies on CCN member councils exercising their strategic leadership role in promoting and securing economic growth. “Government policy on local growth, particularly in two-tier areas, must give greater weight to the primary role of counties’ leadership and services that directly or indirectly secure growth within their areas, as well as the economic potential of non-metropolitan economies.”
  2. LEPs needed to be grounded in democratic and accountable decision-making, providing transparency when investing public funds. Local communities also needed to be aware of how to access and influence the work of the LEPs that served them. “The strategic decision making capacity of county leaders (and their authorities as accountable bodies) within LEPs should therefore be further strengthened to address the democratic deficit, inadequate decision making processes and accountability mechanisms of many LEPs.”
  3. LEPs must ensure that they engage and consult with the full range of economic and business stakeholders when designing and implementing strategic economic plans.
  4. To exploit the full growth potential of LEPs and increase their accountability to the communities they serve, LEPs should be allowed to evolve to ensure they are effectively conterminous with their functional economic areas, with an organising principle that LEP areas should not overlap. “This would allow LEPs to reduce the complexity of local growth programme delivery while increasing the transparency of the arrangements for local communities.”
  5. The Government must consider what further departmental funding, powers and flexibilities can be devolved to LEPs and county areas. “There should be further consideration regarding how to increase the direct funding within the [Local Growth Fund] to a level closer to that envisaged by Lord Heseltine and a further round of bespoke fiscal devolution policy proposals aimed specifically at county areas.”
  6. LEP secretariats needed to be resourced at a level that enabled them to fulfil their core functions without undue calls on the resources of their local partners, including county councils and county unitary authorities.

The CCN said: “The results of our survey show underlying support for the concept of LEPs and indicate strong potential for improved economic outcomes. However, the survey results tellingly point to a number of fundamental weaknesses within the current LEP system.”