The state of the LEPs

Posted by Andy Pike, 19 March 2013

Two and half years on from the invitation to local councils and business leaders to form Local Enterprise Partnerships (LEPs) in England we have now reached a critical juncture in their development. The 39 sets of local actors across England have been busy building these new institutions and forging and nurturing partnerships since 2010. In the wake of Lord Heseltine’s review In Pursuit of Growth in late 2012 and its central call for more decentralisation of resources and responsibilities to LEPs, Government is shortly to announce its response in next week’s Budget.

LEP logos

A montage of all 39 LEP logos

Researchers in CURDS have undertaken the first national survey of all 39 LEPs as part of their involvement in the national Spatial Economics Research Centre (SERC) and the study sought to take stock of the current position and prospects for the LEPs. In early March 2012, CURDS hosted a seminar on ‘The State of the LEPs to disseminate the preliminary findings and to engage in discussion about the issues with academics, analysts and policymakers from across England.

Several questions and issues critical to the current context were identified in the research and animated debate:

“What is the LEP?”

This fundamental question prompted some reflection on the specific nature and purpose of LEPs. For some in the CURDS research, the LEP constituted the Board while for others it was the locus of the local partnership for economic growth. Clarity on the aim, purpose and role of the LEPs remained a central issue on which LEPs were developing their own local views and they are were increasingly keen to better understand what Government has in mind for the longer term.

Are LEPs too small and fragmented really to add value and make a difference to local growth?

The size and scale of the LEPs and the fragmented character of the institutional arrangements was a very real concern to local and national economic development actors. Unflattering comparison was drawn with European and other regions whose more substantial and “heavy-weight” institutions and resources for regional and local economic development left the LEPs looking rather limited and under-powered in the competition for the investment, jobs and innovation to generate local growth. The CURDS research revealed a diverse picture of varied capacity and resources amongst the LEPs.

Establishing the staff and finances of the LEPs is complex. Staff contributions are direct, indirect and pro bono and in-kind from partner organisations. Finances comprise a range of funding streams – European, central and local – with some allocated and some won in competition. Direct staffing ranged from up to 40 to less than 1. Finances stretched from an estimated £40m to under £5m. In this kind of resource environment, it rang very true that for local economic growth the “LEPs were only as strong as their partners”.

How can central Government provide the advice and guidance on what the longer-term vision and plan is for LEPs in ways that don’t challenge the idea of ‘localism’ and undermine the autonomy local actors?

This issue is especially thorny. The CURDS research found that LEPs were crying out for a sense of where Government policy is heading and what further responsibilities and resources are coming over the horizon. Yet mixed and unclear messages were emerging from different Ministers and Departments. LEPs want a steer and direction – rather than prescription – on where Government would like to see institutional arrangements to facilitate local growth heading.

Are LEPs competitors and/or collaborators?

While the 39 LEPs were – in numerous cases – bottom-up entities, the CURDS research and discussion at the seminar focused on the issue of how the LEPs relate to each other within the broader network or system. There is evidence of chasing investments, firms and people for individual LEP areas. There are examples too of collaboration on issues of shared concern, whether with neighbouring LEPs or those further afield for example on MoD and the defence estate. Given the national centralisation of key policy areas important to local growth in inward investment and innovation, the CURDS research revealed an uneven set of relationships between specific LEPs and the key national institutions. In a competitive model, the more capable and better connected LEPs will forge ahead leaving others in their wake. In a collaborative model, the benefits of knowledge exchange and learning might be spread out across LEP-land. If rebalancing is still a serious government concern then some thought on how the overall system inter-relates and works would be timely.

How can LEPs maintain their streamlined organisations with growing responsibilities and resources to manage?

The fear articulated here was about “bureaucratisation” and losing the agile and focused ways in which LEPs are trying to do more with less. Balancing this concern was the need to be accountable for the decision-making and disbursement of public funds. Indeed, the CURDS research revealed many LEPs were uneasy and seeking advice on appropriate governance arrangements to address these concerns and assuage the anxieties of private sector board members. Engaging the private sector by giving them a real say was seen by LEPs as critical to sustaining their meaningful input. But how can it be done in ways that are accountable and transparent?

How much decentralisation and for whom?

In the wake of Lord Heseltine’s review, further decentralisation of responsibilities and resources are expected to be heading the way of the LEPs. Local actors expressed concerns about exactly how this would work. Would there be decentralisation in waves? Would an initial tier of more capable and strong LEPs with recognised economic opportunity and potential to contribute to local growth emerge at the front of the queue for further resources and responsibilities? Where this left the less capable and weaker LEPs was less clear.

Even given the history of flux in the governance arrangements for economic development in England and the alphabet soup of acronyms of the institutions of previous eras, it was felt that LEPs were likely be around for a while with little prospect of further change whatever the outcome of the General Election in 2015. Amongst the local actors there was little appetite for further institutional change and upheaval, the costs of which were still being felt by many in the wake of the dismantling of the regional tier. Fundamentally, local actors were trying to get on with the job of growing prosperity locally. “LEPs may come and go but the rationale for the local partnerships remain” as one participant put it.

As the LEPs await the announcements in next week’s Budget, rumination centred upon whether or not a collective voice for the “LEP family” could or should emerge. Two and half years in LEPs have been largely reactive to the changing landscape of economic development governance policy emanating from the centre. In the next two and half years, LEPs might decide that their shared concerns and interests would be better articulated in a collective and proactive way. This is especially the case if the current government’s predilection for the ‘deal-making’ of “asks” and “offers” continues to shape centre-local relations in England.

LEP participants

Participants from the seminar’s closing panel are pictured (left to right): David Marlow (Third Life Economics), Gillian Roll (North East LEP), Linda Edworthy (Tees Valley LEP), Paul Hackett (The Smith Institute), Lorna Gibbons (The LEP Network) and Andy Pike (CURDS, Newcastle University)

Recovering local economic development

Posted by Andy Pike, 8th February 2013

Few more difficult contexts exist for local economic development than the aftermath of conflict. Destruction and irreplaceable loss create conditions of fear, uncertainty and instability for people and places. As conflict situations end or begin to work towards resolution, the importance of recovering local economic development becomes pressing. Restarting economic activity and especially employment plays a critical role in contributing to stability, reintegration, livelihoods and sustainable peace. Creating jobs helps people and communities to cope and survive in the short term by addressing their basic needs. Revitalising local economic potential, reinstalling social safety nets and mending broken infrastructures become the focus of medium and longer term efforts.

Andy Pike (2nd row, far right) with delegates at the Istanbul Chamber of Commerce

Andy Pike (2nd row, far right) with delegates at the Istanbul Chamber of Commerce

Getting local economies back on their feet following conflict is no easy or straightforward task. The United Nations International Labour Organisation (UN-ILO) Programme on Crisis, Response and Reconstruction has been actively involved in post-conflict states internationally. Critical has been its establishment of an integrated approach to local economic recovery and development. The framework uses what the ILO describe as ‘one programme on three concurrent tracks’ to work through the phases of peace negotiation, stabilization, reintegration and transition towards the ultimate aim of sustainable employment creation and the ILO’s particular vision of ‘Decent Work’ (Figure 1).

Figure 1: Programmes for post-conflict employment creation, income generation and integration

Figure 1: Programmes for post-conflict employment creation, income generation and integration. Source: ILO (2010) Local Economic Recovery in Post-Conflict: Guidelines, ILO: Geneva

As part of this programme, CURDS has been contributing to the ILO’s work in developing guidelines to advise regional administrations in local economic recovery and development in Iraq and assessing the experiences of the pilot areas. The provinces and regions of Iraq are engaged in the task of recovering local economic development following the conflict in the 2000s. Several key issues have emerged from this research:

  • Addressing the questions of ‘what kind of local economic development and for whom? – Central to the rebuilding of local economies in post-conflict situations is the need for a vision of what sort of economy local communities aspire to and desire. Prior to conflict economic structures may have been dominated by specific sectors and labour markets may not have been producing sufficient jobs. Planning in the post-conflict context offers an opportunity to think through how the local economy structures might be reshaped and modified in ways more beneficial to the particular form of development required by local communities.
  • (Re)building capacity – Destruction of physical, social and intellectual assets during conflict creates substantive gaps in the capacity actually to undertake local economic development and its planning. Bringing together the remaining expertise and nurturing new talent become critical tasks in enabling regional administrations to follow the process. Crucially this involves learning by doing and engaging local stakeholders as part of an inclusive and participatory set of activities.
  • Decentralisation – As government and governance structures are renewed in the aftermath of conflict, formerly centralized states have to address the issue of decentralization. New political settlements often require greater recognition of autonomy and the decentralization of responsibility and resources. But it is often hard for central national states to let go and for sub-national institutions to develop the confidence and capacity credibly to deliver. This conundrum is not helped by the mixed evidence and uncertain causal link between decentralization and growth especially in transition contexts:
    Decentralisation Outcomes: a review of evidence and analysis of international data  (PDF: 1MB)
    Do you first need decentralized governance to generate growth? Or should growth be the first priority and then governance reform?
  • Progressive social and economic reform – The conclusion of conflicts can create opportunities for social and economic change as part of the transition to peace. The key issue is engaging local communities to ensuring reform is progressive and inclusive, serving to address existing social and economic problems and inequalities such as gender inequality and youth unemployment. Critical is the need to avoid the kind of damaging reforms described in Naomi Klein’s ‘shock doctrine’ of wholesale marketization and the reinforcement of social and economic disparities and tensions.
  • Sensitivity to context – In developing a general framework and set of guidelines to help local actors, there is a central need to adapt and tailor broadly based approaches to particular conditions. In the stakeholder engagement element of the planning process, for example, the key stakeholders at the regional level may differ with agriculture more important in one Province compared to another and trade unions elsewhere. In this sense, planning for local economic recovery and development in the post-conflict context is an explicitly place-based approach and benefits from adaptation to particular local circumstances.