Integration was seen by the areas we engaged with as a chance to reconfigure strategic and operational arrangements for services that exist to serve the interests of the area. Arrangements vary from place to place and in some areas, local authorities have been playing a strong role alongside LEPs in supporting their delivery work.
There is an important policy question about where accountability for local economic growth should sit and the budget announcement was couched in terms of an opportunity to empower democratically elected local leaders. However, it is also helpful for areas considering the future of LEP functions to consider, in purely practical terms, the work that LEPs currently deliver. Councils told us that they recognised a number of capabilities, closely associated with LEPs, that they consider important to safeguard in an integration process. In addition to separately funded functions, including growth hubs and careers hubs, these include:
Data
Being a single source of business data and intelligence, and labour market intelligence. This links to a strong role in evidence-based strategy making, for example leading on local industrial strategies. Other business support organisations (Chambers of Commerce, Federation of Small Business for example) and local government do not often have a similar offer.
Quality apolitical decisions
LEPs over time have developed strategic priorities with strong business influence as well as assessment frameworks in order to assess funding bids, for example local growth fund, regional growth fund etc. While local government does a similar role with competitive business case development, LEPs have been seen to make decisions based on technical evidence, embracing private sector challenge. There were cases where it had been helpful to be able to explain decisions when they were not politically based.
Functional economic geography
LEP geography is not ideal in all cases and has been the subject of debate and reform in the last five years. However, it was intended to be rooted in functional economic geography and does offer an institutional focus to working across local authority boundaries which may be at risk (for those pending progress with devolution deals). There is also the question of economy of scale – breaking down cross authority functions may require more aggregate resource to replicate them at local authority or devolution deal level.
Continuity
LEPs are not governed by the same four-year local political dynamic as local government. This can help to provide practical momentum and continuity to economic support. This can be complementary to the vision and convening legitimacy of political leaders and so gives confidence to businesses and investors.
Expertise in bidding
Many LEPs have strong expertise in driving funding bids. They have managed the bidding process for programmes such as regional growth funding and local growth funding. Many LEPs have also supported local government with recent bidding rounds, for example Levelling Up Funding and UK Shared Prosperity/Rural Prosperity Funding. Allied to this is experience in providing the infrastructure for the distribution of EU funding. This is an important capability area for linking technical evidence and place-marketing.
Assurance function
LEPs went through a process of designing and developing a National LEP Assurance Framework in 2014 with the then Department for Communities and Local Government (DCLG). This resulted in a guide to support local decision making with accountability, transparency, and value for money. While local government has strong governance and processes, LEPs built in the business voice to their assurance through, for example, a public annual review. LEPs have also developed a strong monitoring role and understanding of HM Treasury Green Book requirements. These are all capabilities that are beneficial to an area – whether they sit in a LEP or elsewhere.
Engagement of business
LEPs have been recognised as strong deliverers of inward investment. This has been made easier by the fact that the Department for International Trade (DIT) has been able to work with 38 LEPs covering the entire country. They also have proactive and ongoing engagement with a large scale of businesses and across sectors most relevant to local growth ambitions.
Ability to attract people with business understanding
The part private sector make up of LEPs was seen as a factor in helping them to be successful in attracting senior executive talent with commercial experience. This is important in a context where local authorities continue to face recruitment challenges for their economic development work. This appears to be linked to the non-statutory nature of the council function at a time of funding pressure and less-well defined career paths than other local government professions.
Lobbying
LEPs are proactive in lobbying, delivering business briefings and do have good access to MPs. The LEP Network plays a role in lobbying for the economy. How this works alongside other institutions does vary according to local circumstances – the changing role of lobbying and creating dialogue with central government will be different in areas with and without devolved mayoral authority.
The way that these capabilities are exercised and experienced will vary between current LEP areas. A key aim in the integration process should be to understand what capabilities are delivered with a benefit to the area and to consider how they can be delivered in the future and in a way consistent with enhancing local democratic accountability.