LEPs Remain On Probation

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A central theme in Lord Heseltine's sprawling review of growth policy, published last week, is the need to empower local enterprise partnerships (LEPs). But the jury is still out on how big a role they can and should play going forward.

Heseltine's most radical idea is consolidating central funding for local spending on areas such as skills, infrastructure and regeneration into a single £50bn+ pot that LEPs would bid into on competitive basis every five years.

There's a lot to be said for the idea. Replacing hand-outs with competition can deliver better value for money. The UK's piecemeal local funding arrangements need simplification. And local communities are often best placed to understand their own needs.

But £50bn is a lot of taxpayers' money to entrust to fledgling voluntary organisations whose performance has been patchy and who continue to divide opinion.

Supporters see them as the ultimate expression of the government's once much-vaunted ‘localism' agenda – partnerships of equals between local authorities and businesses coming together to take control of their own destinies.

Detractors, however, seem them as toothless successors to the Regional Development Agencies that lack the authority and organisational resources to drive local economies.

LEPs have had a good couple of months. In September, the government committed to providing them with core funding for their organisational capabilities. Last month they enjoyed unprecedented success in the third round of the Regional Growth Fund, securing a third of the money on offer.

But it is the next couple of years which will determine their future. They are in the shop window and will need to prove they are up to the task of a bigger role and more financial responsibility.

How they use the money available to them between now and the next election will determine whether there is an appetite to give them anywhere near the authority and scale of resources that Heseltine believes they should have.

Effectively, they are on probation.

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