September 10, 2010 - Anonymous

Local Enterprise Partnership scheme may be too “parochial”

Business groups have warned that the Government's new system of business support may be too "parochial", after its tender process revealed that as many as 57 separate groups would like to establish a Local Enterprise Partnership (LEP).

Following the 6 September deadline for local authorities and business organisations to submit their proposals to establish LEPs, the Department for Business, Innovation and Skills (BIS) announced it had received 57 bids from across England.

However, the Institute of Directors (IoD) has written to business secretary, Vince Cable, outlining the criteria on which it believes LEP bids should be judged, and warning that the formation of too many will result in a fragmented system.

"We believe that each proposed LEP should only go ahead if it has critical mass in terms of size, is supported by the vast majority of business bodies locally, and focused on the issues of transport, infrastructure and planning development," said IoD director general, Miles Templeman. "If these conditions are not met by bids and business is not given a central role in the governance of each new LEP, the Government must be willing to say no on a case-by-case basis."

Forum of Private Business spokesman, Phil McCabe, agreed that the LEPs could become too localised and unable to meet business needs.

"There is a chance that a significant number of the 57 proposals will become LEPs with ultra-local remits and only a fraction of the funding that was available to Business Links," said McCabe. "There is a danger that there will be a postcode lottery for the quality of support available. Business owners appreciate the opportunity to consult, but they need more direction from Government on how LEPs should work."

A BIS spokeswoman said that not all 57 proposals will necessarily be approved, as ministers will check them against the economic priorities in the local areas. "It is too early to suggest that they will be too small or there will be too many," she added.

In June, the Government announced plans to replace Regional Development Agencies (RDAs) with LEPs, to be run jointly by councils and business leaders. It is expected that the new system will be in place by March 2012.