In a science park south of Oxford an autonomous vehicle is demonstrating that it is capable of evading a skateboarder — or in this case an £11,000 side-impact test dummy, or Sid, on a remote-controlled trolley — as it uses a pedestrian crossing.
The dummy being put through its paces at the Culham Science Centre in Abingdon was delivered thanks to £500,000 obtained by the Oxfordshire Local Enterprise Partnership, one of 38 LEPs in England that are designed to boost regional economies.
But after more than a decade in existence LEPs are to be wound up as independent bodies from April 2024 in the government’s drive to accelerate devolution in England and hand more power to local governments and mayors.
The change is part of the levelling up agenda set out in a white paper last year by levelling up secretary Michael Gove. But many local business leaders and experts fear that dissolving LEPs, which were set up in 2010 as a successor to the Regional Development Agencies (RDAs) — will come at a cost.
“My concern is that the independent business voice is going to be watered down,” said Clare Hayward, chair of Cheshire and Warrington LEP and a managing director at the business consultancy Accenture.
Nigel Tipple, chief executive of the OxLEP, points to Sid as an example of how the partnerships can deliver added value, coordinating with politicians and helping win money from increasingly fragmented government funding pots in Whitehall.
“LEPs can simplify that landscape and co-ordinate across political bodies while also maintaining an independent voice for business,” he said, noting that OxLEP included representatives of six local councils as well as Oxford city council.
Chancellor Jeremy Hunt announced that he was “minded” to cease funding the LEPs in the Budget in March, offering £12mn for a final year’s operational funding and a government consultation to decide how they should be folded into local government.
“The government is committed to empowering democratically elected local leaders at every opportunity. To this end, the government intends for the functions of local enterprise partnerships to be delivered by local government in the future,” he said.
Mark Bretton, chair of the LEP Network, which represents all 38 LEPs, said the chancellor’s decision “could significantly diminish or even silence the voice of local business” in regional economic policy.
In last year’s levelling up white paper the government said it wanted to “retain the key strengths” of LEPs, while “better integrating” their services into new devolution plans.
However, critics warn that folding all LEPs into local government risks losing a forum that currently brings together more than 2,000 business leaders, 350 further education college and university leaders, and 200 local politicians in existing schemes.
Bretton said of particular concern were the 12 or 13 LEPs that covered geographical areas with multiple local councils and did not fit into a devolved area, such as Manchester or Liverpool, where LEPs are already firmly integrated into local government.
However, Thomas Pope, of the Institute for Government think-tank, said the plans to abolish the partnerships were logical, given that LEPs no longer had their previous role of delivering Local Growth Funds, which they did between 2015-2020.
“The landscape is currently fragmented. But the aim in five or 10 years is that more [business development] will be delivered by beefed up combined authorities with more freedom in policies they choose, more flexible funding, but engaging with business,” he said.
The business development plans of stronger devolved authorities will instead be driven by employer-led consortiums such as the new Local Skills Improvement Plans. Paul Kett, the former skills lead at the Department for Education now with the consultancy PwC, said these will support and influence local decision-making, rather than competing with it, which was sometimes a problem with LEPs.
Experts applauded the aim of creating a more coherent landscape for industrial strategy by scrapping LEPs. But some fear they will be replaced by a patchwork of new institutions, replicating the problem policymakers are trying to solve.
Sean Mackney, chief executive of Petroc further education college in Devon, said that it was unclear scrapping LEPs would lead to a more strategic approach to business investment. “Without sustained and increased funding, initiatives like LSIPs will just be new, insufficient pots of money, unconnected to a unified transformative strategy or plan,” he said.
Shevaun Haviland, director-general of the British Chambers of Commerce, agreed, warning that companies were faced with “fragmented schemes, which overlap, have insufficient funds, involve too much bureaucracy, and are too short-term” and were exhausted with endless change.
“Funding should be simplified and put into larger pots, which firms can have certainty will still be going in five years’ time,” she said, “The government also needs to stop reinventing the wheel. It should use existing networks to make this happen.”
Back in Oxford, Tipple said that discussions are already under way over how Oxford’s six local councils, all of which sit on the OxLEP board, can maintain the benefits of the LEP and retain the private sector skills of partnership employees who are not on local government payrolls.
Tipple, who lived through the transition from RDAs to LEPs, said one option would be a Local Development Company, with local government leaders on the board and holding a controlling share.
“We can’t waste another two years, we need a timely and well-managed integration to maintain an independent voice for business. I think there’s a recognition that if we didn’t have something like the LEPs, then we’d have to invent it,” he said.
The Department for Levelling Up, Housing and Communities said: “The government is consulting with LEPs and other partners on this proposal and it would be inappropriate to comment further at this stage. We will outline next steps by summer 2023.”