LEPs lack clout to foster growth, says report

The new council and business-led local enterprise partnerships (LEPs) will lack the clout to foster economic growth unless they are handed more resources, a think-tank report has warned.

The study, published today by the Smith Institute, warns that LEPs – which are replacing the regional development agencies - risk falling into irrelevance without increased support from the government and a greater clarity of purpose.

The report says that the RDAs generated economic benefits that exceeded their costs and adds that their "rushed abolition" endangers growth.

Its authors warns that LEPs, unlike the RDAs, lack legal and statutory foundation, have been given little resources to cover running costs and most are unlikely to hire staff. Without a better deal from the government, LEPs face "institutional oblivion", according to the report.

The report cautions that the government is likely to fail in its stated aim of "rebalancing" the economy away from the South.

Paul Hackett, director of the Smith Institute, said: "This new report shows that the government’s strategy to rebalance the economy is not working. The consensus view among the experts is that the LEPs will not be able to match the RDAs and lack the resources and clout to address the growing economic divide."

But a spokesman for the Department for Business, Innovation and Skills said: "The government is totally committed to rebalancing the economy and giving power back to local people, who really understand what is needed to drive growth in their area.

"LEPs now cover all businesses in England. They are breathing new life into local economies by driving forward innovative projects that are stimulating business growth and creating jobs."

Changing Gear: Is Localism the new Regionalism is available here.

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