06/12/12

Autumn Statement 2012 – Good news for Local Enterprise Partnerships

Lorna Gibbons summarises what the Autumn Statement means to LEPs.

The Autumn Statement clearly shows government’s commitment to LEPs. It is worth noting that the Government welcomes Heseltine’s report and will seek to implement as many of the recommendations as possible.  Given that chapter 2 and chapter 6 specifically reference LEPs this could mean a lot more powers for LEPs in the not too distant future.  The Government also agrees with Lord Heseltine that local leaders and businesses are best placed to set the strategic direction for an area and the statement referenced the success of the ?rst round of city deals, where LEPs and local authorities work together to reinvigorate local economies, as an example of the bene?ts of this approach.  LEP business plans are increasingly important.  The core element of the second wave of city deals provides a good opportunity to implement Heseltine’s recommendations and to provide a core set of tools for LEPs and city region areas to really affect change locally.  

LEPs will be asked by the Government to lead the development of new strategic plans for local growth consistent with national priorities. In developing the plans, LEPs will be expected to consult with all relevant local partners, including the local chambers of commerce and other business bodies. These multi-year plans will build on any existing plans and include coordination with ongoing public programmes. It is expected that local authorities or other bodies, and not LEPs, will deliver programmes and projects, ensuring that there are proper accountability structures in place.  Of course some LEPs may well be involved directly in delivery. 

Through this strategic plan the LEPs will have an increasingly important role, and the Government is keen to ensure that all LEPs are able to ful?l this strategic function. The Government believes that LEPs should remain small, responsive, business-led organisations and avoid creating a local bureaucracy.  The Government feels that not all LEPs are providing the local leadership that is needed. To help with this government will provide £10 million per year for capacity building within LEPs. Each LEP will be able to apply for up to £250,000 additional funding per year to support the development and delivery of their strategic plan. 

The Government agrees with Lord Heseltine that local business leaders need to have the tools and levers to drive investment and growth in their area and that means truly devolving funding and powers from central government. The Government will devolve a greater proportion of growth-related spending on the basis of these strategic plans developed by LEPs by creating a single funding pot for local areas from April 2015.

In line with Lord Heseltine’s recommendation, the Government will take the opportunity to streamline its management of the EU Common Strategic Framework funds in England, aligning priorities on the basis of the plans led by LEPs.  LEPs may find it useful to produce an EU funding prospectus 2014-2020 – the Heart of the South West LEP have already produced a really good example of what this might look like.

LEPs will be given a new strategic role in skills policy in line with the recommendations of the Heseltine Review. LEPs will be given a role setting skills strategies consistent with national objectives, and chartered status for FE colleges will be linked to having taken account of the skills priorities of local LEPs. In addition, the Government will encourage LEPs to have a seat on FE colleges’ governing bodies, with colleges represented on LEP boards. LEPs will also be able to determine how the EU Common Strategic Framework funds, including the European Social Fund, are used locally and will be able to bring bidders together to access Employer Ownership Pilot funding;

Other initiatives were announced that will be of great interest to LEPs:

The Government will provide £120 million for two additional rounds of the Advanced Manufacturing Supply Chain Initiative.  This is a great initiative.  The first round was very popular.

Government will increase the annual budget of UKTI by £70 million to deliver services to more small and medium size exporters and help to refocus UKTI activities on the highest value opportunities and emerging markets.  It will be key for UKTI and LEPs to work together to have maximum effect.

The Government will also provide a further £350 million towards the Regional Growth Fund, to provide support for jobs and growth across England until the end of this Parliament. In order to maximise the number of private sector jobs created, the Government will look to re?ect on the successes of the previous rounds and will con?rm how applicants can apply for funding in due course.  It would be great if the bureaucracy could be reduced and the process speeded up to be most useful for businesses.

Government will make available a new concessionary public works loan rate to an infrastructure project nominated by each LEP (excluding London), with the total borrowing capped at £1.5 billion.

In recognition of the importance of partnership across a functional economic area the Government will support local authorities that wish to create a combined authority or implement other forms of collaboration (for example, shared management), including ensuring that the existing legislation is ?t for purpose.  This maybe something offered by LEPs / city regions as part of their city deal bid.

LEPs will also want to highlight these initiatives to business:

The Government is creating a Business Bank to transform the way that Government delivers support to SMEs. It will deploy £1 billion of additional capital to address structural gaps in the supply of ?nance to SMEs and stimulate the provision of long-term capital, including by leveraging in substantial private sector ?nance.

Government will increase the Annual Investment Allowance from £25,000 to £250,000 for qualifying investment in plant and machinery for two years from 1 January 2013. This is designed to encourage and incentivise business investment in plant and machinery, particularly among SMEs.

To promote further private investment, the Government will exempt all newly built commercial property completed between 1 October 2013 and 30 September 2016 from empty property rates for the ?rst 18 months

The Government will extend the temporary doubling of the Small Business Rate Relief scheme for a further 12 months from 1 April 2013. Over half a million small businesses will bene?t from this extension, with 350,000 not paying any business rates until April 2014.

There are two more points I feel it is worth Highlighting:

Lord Heseltine recommended that the Government Property Unit (GPU) should work with local authorities to identify and publish details of surplus and derelict public land in ePIMS so the land can be brought back into use for local growth. The Department for Communities and Local Government and the GPU will work with the wider public sector to identify the best way of publishing open data in a single database, using the local authority Transparency Code, which the Government is currently consulting on, which will require local authorities to publish their data on land and assets.  I think it is also worth considering how a local property board could manage these assets to greater effect.

Finally Government is keen to further reduce burdens on business.   LEPs can help to bring together regulators and businesses – more information here: http://www.bis.gov.uk/brdo/latest/brdo-blog


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