Q. What are Local Enterprise Partnerships?
A. Local Enterprise Partnerships (LEPs) were brought into being on 28th October this year through the Local Growth white paper, in part to replace Regional Development Agencies (RDAs), which have now been abolished by the coalition government. Local authorities and business leaders were invited to come together to form local enterprise partnerships by the Department for Business Innovation and Skills. In all 24 such bodies were initally approved across England, though the number of LEPs has since grown to 27. These initial LEPs are described as being part of the “first phase” in the Local Growth white paper, and as “first wave” by CLG, so it is presumed that more such partnerships are envisaged for the future, though there doesn’t appear to be any timetable in place as yet. The LEPs will be joint local authority – private sector bodies, they will not have any statutory powers nor receive any funding from central government to cover the costs of setting up or running the new partnerships. However, LEPs can apply for a new capacity fund, which will amount to £4 million over four years (about £100,000 per LEP) to conduct work to assess the state of the local economies within which they are operating. Though the apparent absence of a government imposed criteria regarding the composition of LEPs may alarm some, it is worth considering that this complements the government’s localism agenda and desire to remove top-down Whitehall targets and quotas.
Q. What will LEPs do?
A. The government envisages that LEPs will exist under business and civic leadership and are intended to promote a vibrant environment in which the private sector, including social enterprises, might thrive and generate new employment and increased prosperity. It is hoped that LEPs will provide a more nuanced growth strategy for specific localities than that which had been provided by the now defunct RDAs, and therefore will help to rebalance the economy in favour of the private sector. The Local Growth white paper also talks of LEPs helping to foster an entrepreneurial spirit by, for example, engaging with schools and further education colleges though there is little detail on this. LEPs will also be expected to encourage and support existing and new enterprises, including in deprived areas. Without financial support from government, however, some critics have questioned whether LEPs will be able to have much influence at all, with Alexander Ehmann, of the Institute of Directors, deriding these new public-private partnerships as “little more than ... toothless talking shop(s)”. LEPs will, though, be able to bid for central government contracts, including for a share of the £1.4 billion Regional Growth Fund that will replace some of the funds removed from the regions as a consequence of the abolishment of the RDAs. Nevertheless, LEPs will be given no special treatment in the tendering process and will have to compete with other private sector and public-private partnerships.
The Local Growth white paper also discusses the potential for LEPs to become involved in transport, housing and planning decisions, particularly where the private sector is directly affected. It was also announced last week that LEPs will sit on the regional councils which are to oversee the distribution of European Regional Development Fund (ERDF) money.
ERDF funding is quite substantial and amounts to €3.2 bn for England alone between 2007 and 2013. ERDF money is to promote business, innovation and employment and is distributed according to the needs of the various regions.
Q. Will LEPs be linked in with the current Local Strategic Partnerships?
A. Local Strategic Partnerships (LSPs) were introduced in 2000 in order to bring together the public, private and voluntary and community sectors at a local level. These bodies are supposed to be involved in making the key decisions affecting their areas. Although Local Area Agreements are being abolished, and there is no mention of LSPs in the Local Growth white paper, the coalition government has proposed no major change to their status and role and continues to encourage joint working at local level. However, they have made it clear that they do not wish to prescribe the detail of local partnership arrangements so it is up to local areas to determine whether they want to retain their LSP. Therefore, it is very difficult to ascertain whether or not LEPs will replace LSPs in some areas or what the relationship between them might be.
It is also unclear whether LEPs will have to comply with the “duty to involve”, which requires local authorities to consult and involve representatives of local people. It remains to be seen whether this will actually require LEPs to have voluntary sector bodies on their boards. At present there are no indications that the coalition government intends to repeal or vary this duty.
Q. What opportunities are there for social enterprises to get involved?
A. As previously stated the Government includes social enterprises within its definition of the private sector and therefore it is envisaged that such organisations will be included in the new LEPs. However, Stephen Bubb, the Chief Executive of Acevo (the Association of Chief Executives of Voluntary Organisations), claimed recently that 70 per cent of LEPs had no plans to appoint representatives of the voluntary sector, including social enterprises, to their boards. Back in July, the voluntary sector umbrella bodies, the National Council of Voluntary Organisations (NCVO) and Navca, had criticised CLG and BIS for not including the VCS in their letters to local council leaders inviting bids to form the initial LEPs.
Striking a slightly more positive note the Social Enterprise Coalition has observed that it will be necessary for LEPs to have “sufficiently robust and clear” governance structures and that this could provide a window of opportunity for social enterprises to become more involved in the governance of these nascent partnerships. The Coalition doesn’t, however, elaborate on how it thinks this will happen.
Q. What’s in it for Social Enterprises?
A. Despite the difficult start made by LEPs, significant opportunities could be available to social enterprises that involve themselves in these projects. Indeed LEPs could provide social enterprises with invaluable opportunities to learn from, and network with, more established private sector organisations. Furthermore, LEPs also afford social enterprises with the chance to form consortiums with the private sector in order to bid for RDA money. This could help provide social enterprises with an excellent opportunity to become more professional and give a considerable boost to their efforts to scale-up their operations, something which many social enterprises have found very challenging to date.
As Stephen Bubb has highlighted, there are seemingly significant obstacles to social enterprises becoming more involved in LEPs, despite the current government’s championing of the sector. The limited size of many social enterprises may well prohibit them from becoming involved in LEPs, as well as the attitudes of the private sector towards the voluntary sector. As Stephen Bubb also argued in a recent blog, many local chambers of commerce largely regard the third sector as the place “where they buy their raffle tickets or organic jam”. Such attitudes are unlikely to simply disappear overnight and undoubtedly form a barrier to social enterprises being taken more seriously.
The government has also stated that it wants LEPs to work with Jobcentre Plus and other organisations that work with the unemployed. This could provide social enterprises involved in such work with opportunities to get more private sector support for their projects.
Q. Will the work of LEPs be linked-up with any new or existing government programmes?
A. According to the Local Growth white paper, LEPs are expected to complement the work of schemes such as the Work Programme, which aims to get the long-term unemployed back into work. Incentives will be provided to the private sector and voluntary organisations to help make this programme more effective.
However, there seems to be a slight disconnect between the government’s rhetoric on the Big Society and the importance of the voluntary sector, and the content of the Local Growth white paper. Indeed, despite the paper making several references to the importance of communities having control over decision making and voluntary organisations playing a part in creating jobs and economic growth, it seems there is little of substance for the VCS to get its teeth into. However, this is in keeping with the government’s localism agenda which aims to promote local decision making, and rejects the idea of Westminster “micro-managing” the affairs of local authorities. Nevertheless, although the government may support the idea of the VCS, and especially social enterprises, becoming more involved in partnerships like the LEPs they have not proposed any specific measures which may enable the sector to be able to compete on an equal footing with private business. Therefore the government could well miss an excellent opportunity to foster a stronger and more vibrant VCS, and achieve their aims of a Big Society.
