‘Give LEPs the power and funds they need’

Abolishing regional development agencies (RDAs) like Yorkshire Forward and replacing them with business and council-led LEPs is at the heart of the Government’s plan to get economies across the country growing, rather than seeing them fall further behind London and the south east.

But while RDAs were lavished with £1.4 billion a year, 34 LEPs are battling over just £9m of Government funding, although those which are granted Enterprise Zones – including Leeds and Sheffield City Regions – will keep any business rates from new companies setting up there for 25 years.

Richard Kendall, Head of Policy at Hull and Humber Chambers of Commerce, said: “LEPs have the potential to make a really important long-term contribution and will benefit from the drive that businesses will give them, but the lack of powers and dedicated funding will make it harder.”

Ed Cox, director of the IPPR North think-tank, also called for “greater fiscal freedom” for LEPs, while Centre for Cities research institute urges more powers.

To back its claim to want to tackle the north-south divide, the Government has also made much play of its three-year Regional Growth fund which will hand out £1.4 billion for projects creating private sector jobs in areas hit by public sector job losses – but most first-round bidders missed out.

Ministers are also under fire for demanding many RDA assets are sold off rather than being passed to councils or LEPs to use.

Shadow Business Secretary John Denham told a conference this week: “The Government has scrapped RDAs with reckless speed, leaving no effective organisations in place. RDA assets, built up for economic development, like business parks, are being sold-off in a fire sale, while Local Enterprise Partnerships are hobbled by the Government’s decision to leave them powerless – a failure that’s dismayed many LEP participants as well as key business organisations.”