What do manufacturers want from LEP EU Funds strategies?

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Yesterday was the deadline for LEPs to submit their EU Structural and Investment Funds Strategies to Government. We've blogged before about the role LEPs will be playing in directing this £5.3bn five year funding stream from 2014.

There are tight rules on how these funds can be spent; effectively this is UK Government money which is then reclaimed from the EU once spent. It's therefore unsurprising that the Government has issued detailed and extensive guidance in this area.

From our perspective, the plans LEPs develop should strengthen the local business environment by removing local barriers standing in the way of businesses investing or exporting. LEPs should avoid the creation of financially unsustainable and market distorting incentives.

Our Route to Growth industrial strategy had 10 measureable progress indicators for stronger and better balanced economic growth. We believe that LEPs should reflect on two of these indicators as they piece together their overall strategies. These indicators are good measures of a strengthening business environment:

  • An increase in the proportion of companies exporting more than 25% of their turnover
  • A growth in the proportion of mid-sized companies contributing to turnover across the economy

Turning to EU SI Funds strategies, LEPs are all likely to put in place plans for skills and innovation. How can the local business environment be strengthened through these areas?

On skills, youth unemployment is a major part of the talent pipeline which does not have the same level of focus as other skills policy areas. Within manufacturing, the implementation of the Richard Review will see employers play a greater role in skills provision, similarly Industrial Partnerships will take end to end responsibility for the skills system in line with sectoral needs – these are issues above the LEP level and are not concentrated in certain geographic areas.

Youth unemployment has a distinct place based dimension; highly skilled talent is highly mobile talent. Conversely, those who are less skilled are more likely to remain in ‘place', unlocking and developing this latent talent is a natural challenge for LEPs to focus on. Local businesses will then be best placed to unlock this talent and deliver through sustainable jobs.

Innovation is a crucial part of growth and competitiveness, but ‘spreading the jam' as was often the case with previous RDA innovation activity, reduces impact and if not coordinated could end up with duplicated effort across multiple areas.

An activity LEPs should focus on is boosting existing innovation infrastructure already in place and working collaboratively across LEPs to ensure that resources are put to best use across supply and value chains. This collaboration should focus on the commercialisation and embedding of available research, the innovation activity with the lowest possibility of encountering duplicated effort with existing national programmes.

Following yesterday's submissions LEPs will submit their second draft of EU SI Funds strategies at the end of January. These submissions will reflect feedback from Ministers and we hope LEPs will also take the opportunity to undertake more meaningful engagement with local businesses to develop ever more robust strategies.


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