A Leap to the LEP – or prepare for the charm offensive

Last week, the Government published a guidance note that represents an earthquake realigning the geopolitical/economic plates of councils and Local Enterprise partnerships. For those of you with an interest in seismic activity, that’s about a Richter scale 6 –

6.0–6.9 Strong Earthquake-resistant structures survive with slight to moderate damage. Poorly-designed structures receive moderate to severe damage. Felt in wider areas; up to hundreds of miles/kilometres from the epicentre.

If you have not caught up with a copy of the Initial Guidance for Local Enterprise Partnerships on Growth Deals, then I would heartily recommend that you follow the link and read https://www.gov.uk/government/publications/growth-deals-initial-guidance-for-local-enterprise-partnerships

Ostensibly this publication is simply to introduce the new Growth Deals that are the successor to City Deals and a further step in implementing the response to Lord Heseltine’s review – “…ensuring that no place gets left behind”, as it beguilingly puts it. So underpinning Growth Deals is the principle that the Local Growth Fund (LGF) will be allocated, partly to deliver on the Government’s commitment that all places will receive something from LGF, with approximately £1billion in 2015/16 to be allocated in a competitive way.

But read further, and the whole package – including the guidance on what’s expected in and from the LEPs’ Strategic Economic Plans – seems to mark a step change in the LA/LEP relationship.  Up to now, the message that local authorities need to get closer to the LEP in order to access the funds that these bodies are gatekeepers to has more often than not brought disenchanted responses about lack of influence ( particularly from districts) and lack of LEP interest in local issues and local decision making.  But with this guidance, comes  a clear steer that from now on LEPS will have just as much incentive to make sure that their local authorities are on board with the strategic economic strategy.

Why? Because the commitment of LAs to the growth strategy will be essential for success in the competitive element of Local Growth Fund.

The competitive element of the LGF is going to be influenced by an assessment of the LEPS Strategic Economic Plan.  The scope of what LEPS will need to show their local authorities are up for is huge.  This guidance sets the criteria for assessment and includes the need to demonstrate an active commitment by effective, efficient, co-operating local authorities.

Some key elements that the plan will need to show are:

  • Demonstrating a wider commitment to growth – meaning
    • that the plan is sustainable across local spending and decision making,
    • that up to date  local plans are aligned or jointly prepared with a positive framework for growth
    • with planning and regulatory decisions that support businesses, and
    • effective regulatory services that meet business needs.

So – for a PAS audience, the LEP will have a vested interest in both the way local plans are drawn up and the way development management decisions are processed and determined.

  • Aligning or pooling LA capital and revenue spending on growth – meaning
    • LAs decisions on  capital and revenue spending should give weight to supporting the strategic economic plan ( specifically spending on housing, transport, economic development, regeneration, planning and infrastructure)
    • LA asset management ( rationalising use of assets, selling assets)  and
    • mainstream spending should support growth
    • a proportion of New Homes Bonus will be handed over by councils to be pooled as a positive means of supporting strategic housing delivery (Government will determine the proportion).
  • Effective collaboration on economic development –  meaning
    • Where LAs have merged teams and/or services for efficiency, or
    • where there are shared plans, this will be taken as evidence of partners being able to work together to improve efficiency and effectiveness to reduce risk and prove the strength of partnership.

The document suggests that over the Summer there is lots of work done on “investing in partnerships, diagnosis, direction and commitment to ensure that there are strong foundations for the proposals put forward”.

So should local authorities be in expectation of a bit of a charm offensive from their LEP?

In preparation, it will be the canny local authorities who have their heads sorted out about what they want and what they are prepared to do in return.

On the upside for local authorities, the proposals should fit well with the LGA’s manifesto on “Rewiring Public Services”.  The guidance includes a section looking specifically at the role of accountability in the spending of Local Growth Fund.  When the LEPs were first established, the emphasis seemed to be on the engagement and leadership of the private sector in driving through strategies that would deliver businesses needs.  With this guidance I am seeing a swing in the direction of local political accountability – hence the need to ensure that local elected representatives have a greater role in the collective decision making. The guidance clearly lays the responsibility for ensuring that the public money is spent “with regularity, propriety and value for money” on democratically elected council leaders (oh, and centrally, on the ministers). The need for individual LEPs to review their governance arrangements to encapsulate the new requirements is mentioned several times in the document.

There are a slew of suggestions about how to build these strong relationships and foster collective decision making. In terms of the LAs, these include Joint Leaders committees, the creation of Economic Prosperity Boards and other arrangements that will help to deliver collective decision making.  The term “combined authorities” is used – although from reading the guidance  I am left with no clear idea of what the proposal is here.

There is a suggestion that the uneasy jigsaw of LEPs and local authority boundaries could be reconsidered in order to give better representation for councils that are not formally represented or where more than one LEP area is involved ( indeed, there is a window identified if the Local Enterprise Partnership decide that they wish to change their boundaries in order to better set out their vision across a functional economic area).

So this is the offering to local authorities – a real role in decision making?

What will the councils need to be prepared to offer in return?

  • A greater willingness to subjugate local interests to collective decision making for the wider economic area (see the repeated mention of joint work on local plans)
  • A preparedness to make the hard decisions on development proposals to achieve the objectives of the Strategic Economic Plan (interesting to speculate on the relationship between the development plan and the strategic Economic Plan in making decisions on planning applications)
  • A preparedness to take a wider view on the use of individual council’s assets where, not just the assets themselves but the receipt from disposals, might be earmarked for supporting elements of the Strategic Economic Plan ( sometimes being prepared to put the collective good ahead of pressing local financial interest?)
  • A willingness to move more quickly towards shared services, joint contracts, and even these “combined authorities”.

Back to the earthquake analogy – from my reading of this guidance, I see a whole new landscape being created for local authorities and LEPS to work in. It has come about quite suddenly and the timetable for making the most of the opportunities that are thrown up by this step change are quite short.

The key dates for the Strategic Economic Plans are:

  • December 2013 – LEPs share their first draft of the Strategic Economic Plan with Government
  • March 2014 – LEPs submit their final version of the Strategic Economic Plans to Government
  • April 2014 – Government begins the formal assessment of Strategic Economic Plans
  • July 2014 – Local Growth Fund offers are made to LEPs.

I think that rather than sitting back and enjoying the hazy, lazy days of Summer – this timetable should put a new urgency into the discussions about what local authorities want for the growth of their communities and how much they are willing to commit to managing local expectations in order to increase the chances of accessing big chunks of Local Growth Fund cash to deliver on the big economic plans.

The Duty to co-operate – maybe that was just the pre- tremor?