Government confirms it is "minded to" to transfer Local Enterprise Partnerships functions to local authorities

The Government has confirmed its "minded to" decision to transfer the economic growth and business representation functions of Local Enterprise Partnerships (LEPs) to local authorities in England.

The County Councils Network (CCN) has strongly welcomed the announcement, but the District Councils Network (DCN) has urged the Government to reconsider its plans after raising concerns that the changes could see district councils sidelined.

In guidance issued by the Department for Levelling Up, Housing & Communities and the Department for Business & Trade today (4 August), the Government detailed the plans, which will see its sponsorship and core funding of LEPs end.

LEPs are 'business-led' partnerships between local authorities and local private sector businesses.

The Government will now support local authorities to take on LEPs' functions as set out in the March 2022 LEP integration guidance and previously supported by annual core funding – namely, business representation, strategic economic planning, and responsibility for the delivery of government programmes where directed.

The Government said it expects these functions to be exercised by upper-tier local authorities (working in collaboration with other upper-tier local authorities as appropriate) where they are not already delivered by a combined authority or in areas where a devolution deal is not yet agreed.

Some revenue funding will be provided to local and combined authorities in 2024/25 to support them in delivering the functions currently delivered by LEPs, the Government said. However, details of the funding have yet to be released.

Responding to the announcement today, the DCN noted that the guidance does not encourage county or unitary councils to cooperate with district councils in relation to LEP functions.

Cllr Barry Wood, DCN’s regeneration and growth spokesman, said: “It beggars belief if the Government’s intention is to cut out district councils from the vital drive to support business and create jobs."

He added: “As the most localised principal authorities, districts know their places in more detail than any other tier of government – our officers and members have a uniquely localised understanding of the needs of local businesses and the needs of our communities."

He argued that district councils have unique expertise and knowledge of their local economies given their involvement with the local planning system, regeneration, economic regeneration and the local environment – “all of which are essential tools for building sustainable and prosperous local economies”.

“The danger is that by side-lining us, the drive to create new opportunities will be far weaker than it could be,” he added.

Cllr Wood urged the government to rethink its plans to ensure district council expertise is fully utilised.

CCN meanwhile welcomed the news after having published a report in collaboration with EY last month that called on the Government to swiftly transfer LEP functions to upper-tier councils.

Cllr Tim Oliver, CCN Chairman and Leader of Surrey County Councils, said: "Today's decision by the Government is a decisive one and very welcome, drawing a line under recent uncertainty and allows us to get on with integrating Local Enterprise Partnership (LEP) functions into upper-tier councils and combined authorities."

He added: "We are pleased that the Government has listened to the calls of the County Councils Network (CCN) that it is upper-tier local authorities who have the necessary scale and expertise to make this transfer a success, while also confirming that transition funding will remain in place for local authorities next year as they absorb LEP functions. It is important that transition and longer term funding is sufficient to fund all new burdens and provide the necessary resources to enable councils to make the most of these new functions to support local economies."

The Government has set out that LEP functions should be transferred to upper-tier councils, but it still allows LEPs to continue to operate independently without government support.

"While recognising these are private enterprises which the government cannot abolish, this could create duplication and confusion locally, and therefore they should only continue to function following consultation with the relevant upper-tier council," Cllr Oliver noted.

Adam Carey