Local Enterprise Partnerships

Future of Soft Power – in Westminster Hall at 4:30 pm on 16th March 2022.

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Photo of Sally-Ann Hart Sally-Ann Hart Conservative, Hastings and Rye 4:30 pm, 16th March 2022

I beg to move,

That this House
has considered the status of local enterprise partnerships.

It is a pleasure to speak under your chairmanship, Ms Rees, and I thank everyone for attending the debate.

I am delighted to have secured the debate at such a critical time for local enterprise partnerships, when strategic, business-led, local economic growth remains in rather a state of suspended animation following the LEP review. In East Sussex, we have been well-served by LEPs over the past 10 years and I am delighted that my right hon. Friend the Secretary of State for Levelling Up recognised and affirmed the vital role that LEPs can continue to play in the recent levelling-up White Paper. It would have been all too easy for him to have looked for a headline and to have announced the creation of successor bodies, so I congratulate him for the leadership and common sense that he has shown on the issue.

That said, the sector is in limbo as it awaits clarity on its future role and, critically, confirmation of the funding it needs to fulfil it. That is creating an inability to plan, and the continued uncertainty has seen some of our most talented people leave LEPs. It is also having an impact on our business leaders, who give their time and experience in support of their local areas. They will not stay at the table for long if the uncertainty continues or if they do not feel valued.

It is six weeks to the day since at the levelling-up White Paper was published and LEPs have very much welcomed its conclusions. The value of LEPs is based on an array of evidence about their impact across the country, and a visit to any of their websites or social media platforms will demonstrate the huge amount of work that is under way. Only last week, the Under-Secretary of State for Digital, Culture, Media and Sport, my hon. Friend Chris Philp, who is the Minister with responsibility for the digital economy, was in Hull to launch the latest LEP local digital skills partnership, which equips people across Hull and East Yorkshire with the skills needed to support the region’s digital jobs boom and to ensure that more residents can benefit from the thriving local tech sector. LEPs are also home to, and work closely with, world-leading sector champions, from creative industries, cyber and net zero through to defence and space. LEPs are already bringing together critical clusters to support innovation and turbocharge growth.

In research and development and innovation, LEPs are making groundbreaking advances based on high-tech economic clusters. They are demonstrating their value in a way that is crystal clear, whether through cell and gene therapy in Hertfordshire, the first test flight of a hybrid electric aircraft in the south-west, developing new agri-tech systems in the midlands, strengthening cyber-security technology in Gloucestershire, automation and robotics in Oxfordshire, or building new supply lines for future electric vehicles in Coventry. Some of the largest stand-out examples of innovation are driven by LEPs, which was also cited in the White Paper.

In my own beautiful constituency of Hastings and Rye, the South East local enterprise partnership, or SELEP, has had a major impact thanks to its ability to convene partners, build strong relationships and help to put the required structures and processes in place to help local businesses thrive.

Photo of Tan Dhesi Tan Dhesi Shadow Minister (Transport)

I commend the hon. Member for having secured a debate on LEPs, because the LEP in my own Thames valley region does a great deal of work to bring together businesses, local government, the third sector and higher education so that they work collectively not just for our region but for UK plc. Does she agree that when those groups are all talking in unison and agreeing with the likes of myself that we need to build a western rail link to Heathrow, which is the No.1 infrastructure priority in our region, the Government should agree to such work rather than delaying it, as is currently the case?

Photo of Christina Rees Christina Rees Labour/Co-operative, Neath

Order. It is nice to see that you have not lost your technique for long interventions, Mr Dhesi.

Photo of Sally-Ann Hart Sally-Ann Hart Conservative, Hastings and Rye

Mr Dhesi makes a good point about partnership working, but I cannot comment on the western Heathrow link as I do not know enough about it.

Turning to skills, LEPs have significant success in the sector, in particular through skills advisory panels. Business feeds directly into that SAP data and relies on the cross-co-operation and capacity of LEPs to gather and deliver that level of information at scale. No other organisation does that locally and it connects directly with the aims of the Government’s proposed unit for future skills. LEPs also co-fund the Careers and Enterprise Company’s enterprise adviser network, which has brought nearly 3,000 business volunteers into schools to support and stimulate vital career choices for students. The convening role of the LEPs has boosted the benefits, scale and reach of that partnership, enabling more business stakeholders to connect directly with local schools.

Furthermore, LEPs work in cross-partnership to deliver solid results for their skills boot camps and institutes of technology, addressing skills needed in green technology, the heavy goods vehicle and logistics sector, digital, advanced manufacturing and the construction sector. Again, that helps to deliver on another White Paper ambition to resolve acute national and local skills shortages.

Only last week, the Higher Education Commission launched its latest report on innovation, again highlighting the central role that LEPs can play in driving innovation across our regions. More broadly, LEPs have played a critical role in supporting our local small and medium-sized enterprises through the pandemic and the recovery, too. That is absolutely right in East Sussex.

Photo of Mark Pawsey Mark Pawsey Conservative, Rugby

I was delighted to hear my hon. Friend refer to the work of the Coventry and Warwickshire LEP in supporting suppliers of the electric vehicle supply chain. She talked about SMEs, and the Coventry and Warwickshire LEP has supported 5,500 businesses, organising a whole range of roundtables. Is not the great strength of LEPs that they bring private sector expertise into an area that was originally only for the public sector?

Photo of Sally-Ann Hart Sally-Ann Hart Conservative, Hastings and Rye

I completely agree with my hon. Friend. The commerciality of the minds in the LEP adds to the local authorities, giving that broad cross-section of expertise.

In the past year alone, 1.6 million businesses turned to their local LEP growth hub for advice and support. During the most challenging times of the pandemic, LEPs designed and delivered more than 100 local initiatives, targeting help and support to give local businesses the best chance at survival. They played a similar role in preparation for exiting the EU. They are now looking at how global challenges are impacting on local business. The intel is fed into central Government weekly, providing real-time data and insight. LEPs have shown it, the White Paper confirms it, and I am confident from my discussions with my local LEP that they have a unique role to play in the future.

The LEP structure, however, of regional collaboration with public and private organisations and individuals, with a unique focus on improving local economic growth, is potentially under threat. Six weeks on from the review, LEPs have no confirmation of their future role nor, more critically, how or whether they will be funded to fulfil that role—hence I am here today to ask the Minister for clarity on that important issue. We must turn the words of the White Paper into tangible policy. Action is now a matter of urgency.

In conclusion—though quite a long conclusion—I would welcome the Minister’s consideration of the following points. The Government must please clearly define and establish the future functions of LEPs and make them clear to all parties. If the functions are not clear, or no obligation to consult them is made, any meaningful role will simply be lost to posterity in future structures.

It is vital that the local independent business voice of LEPs is safeguarded for it to be engaged in local economic planning and decision making, and that the LEPs’ local government partners recognise that. More than 2,000 local business leaders offer their time and expertise through LEPs to support their local economies. They are an asset that we cannot afford to lose. Involving that local voice in devolution agreements will help to keep business around the table. The private sector expertise and investment has many regional benefits and we need to encourage a culture of enterprise and engagement.

We also need to recognise that LEPs’ business acumen is already helping to identify and drive some of the biggest groundbreaking economic clusters in the country, generating jobs and pulling in more private sector leverage than public finance alone. In one example, a LEP’s brokering capability generated an investment ratio of 12:1 for a local sector cluster, and it is still increasing. That capability, at minimal cost to the public purse, could simply disappear if we do not clearly establish their function now. It is not the number of allocated capital pots that counts; it is about LEPs having the ability to influence how that capital is spent. That is really fundamental.

For many, the journey to devolution could be a lengthy one. The White Paper suggest that it is a decade-long ambition, and some suggest even longer. In some areas, there may be no greater appetite for Mayors or county deals than we currently see, and the focus on immediate mayoral combined authorities reflects only about 32% of all areas, because approximately 68% of LEPs are not covered by MCAs. LEPs rely on European funding to support skills and deliver projects, so they will therefore need to access the UK shared prosperity fund to do the same, as the vast majority will not be in MCAs. Ultimately, we need to identify the functions and pathways for LEPs outside MCAs.

Through their unique collaboration and local business voice, LEPs broker investments that deliver the jobs, environment and local taxes that local communities need and depend on. It is now vital to ensure that LEPs have the teeth and funding, so that they can continue to develop the opportunities that play such a significant part in levelling up the entire country from north to south and east to west, including our coastal communities.

Photo of Christina Rees Christina Rees Labour/Co-operative, Neath

I would like to start the wind-ups at 5.12 pm in order to give Sally-Ann Hart a couple of minutes to sum up at the end. I do not think there is any need to put a time limit on speeches, as long as you are kind to one another.

Photo of Greg Smith Greg Smith Conservative, Buckingham 4:42 pm, 16th March 2022

It is a pleasure to serve under your chairmanship, Ms Rees. I congratulate my hon. Friend Sally-Ann Hart on securing an important debate for all local enterprise partnerships up and down the land. Indeed, since 2010, local enterprise partnerships have been integral to growth. The contribution that LEPs make to the prosperity of the nation is invaluable, and I want to make the case as to why nowhere is that more clear than in the country of Buckinghamshire.

The Buckinghamshire local enterprise partnership has played a vital role in determining local economic priorities and driving job creation, workforce skills and growth. It is quite a startling statistic that 55% of all new commercial and industrial employment space in the county of Buckinghamshire over the past five years has been delivered on the local enterprise partnership-managed enterprise zone sites at Westcott, which is wholly in my constituency, Silverstone Park, which is roughly half in my constituency and half in that of my right hon. Friend Dame Andrea Leadsom, and a further site next door, which is in the constituency of my hon. Friend Rob Butler.

With 14,000 active members, the LEP’s Buckinghamshire Business First growth hub has filled the void and delivered a unified business voice across the county. Let me give a few examples. Over the 12 months from the start of the covid crisis, it provided 65,000 essential business assists. Ahead of any of the Government support that was announced and delivered, the LEP covid recovery fund provided £1.6 million directly into business survival and it was the first LEP in the country to act in such a way. The impact is clear: all 62 businesses supported are still trading, 197 new jobs have already been created and 258 have been safeguarded.

The LEP skills hub in Buckinghamshire is ranked No. 1 in the country by the Careers and Enterprise Company. Buckinghamshire is the first area in the country to have enterprise advisors active in every state school in the county, and the LEP’s annual skills show is the biggest single skills event in the south-east of England. The LEP has supported transformative projects such as Pinewood Studios in the constituency of my hon. Friend Joy Morrissey, which has helped the UK film industry grow by 18% in the last five years. Those are some incredible examples. I could give more, but time is against me. By working more closely together, local enterprise partnerships will continue to maximise job creation, growth and real investment right across the country, delivering long-term, meaningful results, particularly for communities outside London.

Brexit was about removing the distortions created by European Union membership, doing things differently in ways that work better for the communities we serve and promoting productivity and prosperity. LEPs are an integral part of that vision. There has never been a more exciting time to be involved with local enterprise partnerships, not least in Buckinghamshire, where our LEP has invested wisely. Its capital programme funds have been recycled. Investment loans have been repaid and enterprise income secured—all to enable Buckinghamshire to operate independently of taxpayer support if necessary. As my hon. Friend the Member for Hastings and Rye said, LEPs need certainty. I hope my hon. Friend the Minister will give us some reassuring words and actions.

Photo of Siobhan Baillie Siobhan Baillie Conservative, Stroud 4:46 pm, 16th March 2022

It is a pleasure to serve under your chairmanship, Ms Rees. I thank my hon. Friend Sally-Ann Hart, who made some valid points. We are all here seeking certainty, and I hope to hear more information from the Minister, as many of our LEPs have contacted us asking for clarity.

I work closely with the GFirst LEP in Gloucestershire. My patch is Stroud. Even before my election, the LEP was really helpful. It was easy to approach and had a helpful team. It is packed full of a diverse range of skills and made up of local businesses across Gloucestershire. I find that it shares my attitude that, in Stroud, it is getting things done that matters to people. That means working with everybody, regardless of party politics, and making sure that the people they are engaging with can make a difference. I find that an effective, pragmatic approach—and one that is not always present in all aspects of an MP’s life as we try to move things forward.

I have inherited many projects that are decades old and need some attention and a bit of a kick up the backside. The LEP assists me with that. A key aspect of the LEP and the work I do with it is in harnessing the power of businesses in the private sector, as my hon. Friend Mark Pawsey mentioned. Private sector businesses are our job makers and wealth creators and are vital in getting things done. If we do not have their brains and aptitude on certain issues, things fall down, particularly when they get mired in long-term squabbles.

It is important that we think carefully about the future of LEPs. I have no issue with that. I know from speaking to colleagues across the House that not all LEPs are performing brilliantly and we have to acknowledge that. The word “patchy” comes up when people talk about local enterprise partnerships and there are questions about the value that they bring to some areas—not mine, but others.

It is also safe to say that not all work with their local MPs and their local community champions of councils and councillors. Some operate as mysterious benevolent bodies doling out millions of pounds of taxpayers’ money. They make no reference at all to the Government or local businesses and community champions that could give them some guidance about the best place to spend that money. I understand why the Minister and his team are looking at LEPs, particularly as we are looking at new models of devolution, but I do not want the Government to throw the baby out with the bath water.

I will go through a few of the projects that we have been working on locally. We have growth hubs in our college. It is an ambition of our Skills and Post-16 Education Bill work with the Department for Education that we bring businesses into our further education colleges. We are already doing that through the work of the LEP, including by providing net zero advice and supporting businesses. I have some fantastic local businesses in my area, such as The Boys Who Sew, which have valued the advice and support. We have a huge bid request in to host the world’s first fusion power station in my patch, which has involved every single aspect of local enterprise; a LEP is certainly a big part and player in that. The GFirst LEP chairs in the western gateway area are all members on the gateway board, so we work closely together.

I want to give credit to my hon. and learned Friend Alex Chalk—he would be here, but having been elevated to Solicitor General, he is not allowed to join in these debates—who, working closely with the GFirst LEP, has worked tirelessly to create the cyber-cluster for Cheltenham, Gloucestershire and the western gateway. It was one of the discussion topics at the inaugural meetings for the western gateway and it is now actually happening, so we can certainly chalk that up as a win.

On skills, we have a joint portal between the county council and the GFirst LEP, and an employment charter, which is being piloted across the county at the moment, involving about 20 employers and a number of schools. We also have 10 business sector groups. As my hon. Friend the Member for Hastings and Rye said, if we delay making decisions or giving those groups certainty, we will lose those busy people. They are not going to stick around; they will go and join another group if they can see that that is worth while.

In essence, LEPs can improve by being more transparent and helping more people to understand what they are there for. They can do better at showing where the money is coming from and why they are spending it, and they can work better in some areas with their MPs, councils and councillors. However, I support what they are doing—certainly in Gloucestershire—and I hope we are able to give them certainty so that they are able to plan and continue doing good work. As Government work with the levelling-up fund and the prosperity fund comes along the line, we have a lot to do. LEPs are a big part of that.

Photo of Andrew Lewer Andrew Lewer Conservative, Northampton South 4:52 pm, 16th March 2022

I thank you for your chairmanship, Ms Rees, and I thank my hon. Friend Sally-Ann Hart for securing this debate. The debate around LEPs is of particular interest to me because when I was leader of Derbyshire County Council from 2009 to 2013, I was there, in the thick of it, when the old regional development agencies were dissolved and the new concept of local enterprise partnerships was created. I helped to create D2N2 and sat on the board of that LEP for some years, so I had a ringside seat in terms of the strengths and weaknesses that the new organisation brought to the table.

One great weakness was that there was a lot of overlap: different areas were in all sorts of different LEPs, which caused all sorts of problems. There was, perhaps, a weakness of political will in the centre, with that sort of washing machine salesman theory of politics: someone creates something exciting, and for six months Ministers talk about it as the great solution to everything; then, something else comes along and interests fade or distractions happen.

I got a sense of that when I was the Member of the European Parliament for the East Midlands, where I was the European Conservatives and Reformists group co-ordinator for the Committee on Regional Development. It was certainly clear there that regions were still where it was at, whatever we had decided to do in England. From 12 months after the creation of LEPs, the background of a lack of central focus and drive was sometimes quite apparent.

Since my election as Member of Parliament for Northampton South in 2017, I have worked closely with SEMLEP, the South East Midlands Local Enterprise Partnership, on a range of issues such as local town regeneration, company growth funding pots and larger, more ambitious investment programmes—it is almost a sort of Voldemort moment—such as the Oxford to Cambridge arc. Over the past 12 to 13 years, I have seen what works well and what does not work so well, and I have some general observations to make from my experience, given the current time and context. Policy initiatives such as levelling up are hitting the ground just as the economically damaging covid emergency finally recedes and just in time for a whole new set of economic pressures. This fits in well with my time and role on the Levelling Up, Housing and Communities Committee and as chairman of the devolution all-party parliamentary group.

First, LEPs are not perfect. There are issues around geography; not all LEPs fall very neatly within boundaries. There are some perceived overlaps, and in the case of the Oxford-Cambridge arc, we could see some perceived underlaps. It is worth noting that the Oxford-Cambridge arc LEPs tried to adapt and co-operate with other LEPs to meet the milestones. That has been encouraging, but the arc is not in the levelling-up White Paper, and now there is an explosion of question marks around it and its future.

The LEPs themselves are not perfect, but they are there. They have a pool of critical knowledge, expertise and relationships to draw from. The machine works pretty well, so I would like the Minister to speak about the changes and whether growth funding pots will go through LEPs henceforth. Now, at this critical juncture, might not be the time to mess around with organisational architecture, tempting though it may be. We should not make the perfect the enemy of the good.

There are always risks. When Northamptonshire Enterprise Partnership dissolved a couple of years ago, not only the senior leadership but almost the entire staff—with their deep wells of knowledge and, critically, their interpersonal relationships—disappeared overnight. It has taken time for those gaps to be filled, a phenomenon that my hon. Friends the Members for Stroud (Siobhan Baillie) and for Hastings and Rye have referred to. I have personally had a good relationship with SEMLEP, and I am loth to start all over again when my focus in this instance is not so much on the vehicle as the destinations, looking for progress, not perfection.

My constituency has many challenges, as do the greater geographies of counties and regions, but they also have great opportunities for improvements, which is what our focus should be on. LEPs have the economic expertise, relationships, knowledge and history of public-private partnerships that we can draw on heavily. As my noble Friend Lord Lilley said many years ago, I have a little list, but I will simply say that Northampton has seen some great achievements through the LEPs, including the Vulcan ironworks, MAHLE Powertrain, Northampton College’s advanced engineering centre and digital skills academy, and MK:5G. Of course, there is displacement theory in the economy—just because money has been spent here, it does not necessarily mean it would not have been spent better by companies themselves, or elsewhere. This is spending packaged as investment; it is still taxpayers’ money. Nevertheless, that is a list of positive projects.

The LEP investment independent evaluation said that the return on investment for the whole programme will be £9 for every £1, so there is some good stuff there. I am always slightly suspicious of ROI figures—it always seems slightly like the Del Boy theory of investments: “Next year, we will be millionaires”—but nevertheless there is some good ROI there that can be effectively demonstrated. LEPs often operate on a larger scale than a local authority, but are obviously smaller and nimbler than central Government. They therefore have an important part to play in the delivery of our local growth and investment plans, imperfect as they are—imperfect as we all are.

Photo of Alex Norris Alex Norris Shadow Minister (Levelling Up, Housing, Communities and Local Government) 4:59 pm, 16th March 2022

It is a pleasure to serve with you in the Chair, Ms Rees. I congratulate Sally-Ann Hart on securing this important debate and on the case she made, particularly for the value of LEPs. Many of her points about the role of LEPs in skills, business development and attracting inward investment were well made, but I particularly liked her point about their power in terms of convening. That is one value that has been harder to quantify, but it is absolutely important, and when the Minister closes, I hope he will talk about the need for greater certainty —I will make some points about that myself—because that is a clear message that is coming back to all of us. LEPs have shown the value of bringing business together and giving it the chance to help shape a place and the future of local economies. That has been a real success of the model.

I tried to keep pace with Greg Smith. In the end, I wrote down “sheer volume” for the wonderful achievements in the Bucks LEP. I was struck by 55% of new starts being in the enterprise zones, which really shows the impact in that community. That relates to the point made by Siobhan Baillie about getting things done, which is what our constituents want and what we all want for our communities. We talk about long-term projects, but we want to get things done, get the economy moving, get people in work and get them the right skills. Those points were well made.

Andrew Lewer sold himself short. My LEP is Derby, Derbyshire, Nottingham and Nottinghamshire—D2N2—and the hon. Gentleman was a founder director. It is widely accepted across the patch that it has done a very good job. Those things were very difficult at that time; looking back, it seems a lot easier. He made some points about geography, which was a contested issue in our part of the world at the time, as was the structure. The transition from regional development agencies to the LEP model was quite painful. The hon. Gentleman is widely considered to have done a very good job. That shows that, as well as the value of business in these bodies, there is still, and always will be, an important place for local politicians in shaping a place, whether that is leaders of councils or economic development leads on councils. We should always want them to be part of the work, because the value is in the rich partnership between the public and private sector. There is real opportunity in that.

I do not want to go past the point about geography and overlaps and underlaps, because we are going to go through that now—on steroids—as we move now into the next phase of the levelling-up White Paper and the different plans around devolution. There was some interest when it was about local economic partnerships, but in reality we knew that most of our constituents would not particularly connect with the issue. But they are going to when it starts being about mayoralties and combined authorities, and we are really going to have those conversations, so some of that insight and experience will be very welcome.

Local economic partnerships have been an important forum. In my own community, D2N2 covers 2 million people with an output of £45 billion, and it aims to add another £9 billion. That is the scale of the ambition. The LEP has brought real expertise, and a co-ordinating role, as the hon. Member for Stroud said. That has been particularly clear during the pandemic, where it has pulled the partners together to assist people back into work, to steer local investment and to support businesses to grow. We have been very lucky to have it.

It would be remiss of me not to mention the predecessor bodies. For us, that was the East Midlands Development Agency. In general, regional development agencies were good bodies. I know that the hon. Member for Northampton South does not like the ROI stats, but the evidence for RDAs was very good in that regard, and I feel that the changes were a false economy—a cost-cutting measure. I am not advocating a return to that system, but the governance model we have today, with a partnership between local politicians and local business, plus the heft of the support that RDAs had, might be a better way forward. I would be interested to hear what the Minister foresees.

We face significant challenges in our economy. We have had anaemic growth for a decade. We can have a big argument about why that is, but it is still the reality. When we look at wage growth, I do not even think it would qualify even as anaemic. The Bank of England is predicting economic growth to be as low as 1% by 2024. Whatever our economic plans, LEPs have to be there to jump-start our economy. There are elements of the levelling-up White Paper that start to address the situation, in concept and rhetoric, and there is lots that we would all agree with, but we now need to hear from Ministers about more than the concept, and about how we are going to tackle the failed model of over-centralisation and genuinely shift power from the centre—from Whitehall to town hall, and then from those town halls to communities themselves. We know that that is what communities want and that when people are treated well and are given the opportunity, they do well. I fear that, in the long journey between now and 2030, if we go on another trip around the deal-making process and the piecemeal model of devolution, it will be very slow and will frustrate progress. I think we can go faster and I hope the Minister might reflect on that.

The White Paper says that the Government are

“encouraging the integration of LEPs and their business boards into MCAs, the GLA and County Deals”.

Many LEPs have welcomed that but, very much in the spirit of the comments of the hon. Member for Hastings and Rye in opening the debate, they want to know more about that transition. The White Paper said that further detail would be provided in writing to LEPs, Will the Minister say when that happened or will happen?

I will finish with a couple of quick questions. We are moving into an age of more individual, personalised government. I have to say, that is not to my taste. I think the superman model of leadership is a dated and failed one—and they are virtually always men. I like a Cabinet Government; I think more heads are better together. The value in the LEPs was that they brought together a rich mix of partners. They are very busy people with very important day jobs, and they are going to need to know that their work is valued. If they are downgraded to a business sounding board for a Mayor, then that will be a challenging process. Otherwise, if we are putting all accountability on an individual personage, where will LEPs fit in to that? I am keen to hear what the Minister has to say about that.

The White Paper announced three new innovation accelerators. Can the Minister provide some detail on how LEPs and local government are expected to interact with those? Will they have genuine power and a say in them? Similarly, how will LEPs engage with the new levelling-up directors and the Levelling Up Advisory Council, and how will they provide feedback? We have seen a general sense of enthusiasm for sub-regional business and political leadership on important matters of developing the economy. Saying that sounds almost facile, but that is what we are all saying. We are now moving into a new context through the levelling-up programme. There are many questions that need to be answered, so I hope that we might start to hear answers from the Minister today.

Photo of Neil O'Brien Neil O'Brien Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities) 5:06 pm, 16th March 2022

It is a pleasure to serve under your chairmanship, Ms Rees. I start by thanking my hon. Friend Sally-Ann Hart for securing this important debate. It has been inspirational to hear the many varied things that LEPs are doing across the country: in the south-east, Thames valley, Coventry, Warwickshire, Buckinghamshire, Gloucestershire, and D2N2 in Northamptonshire and the south midlands. They are doing everything from heritage to digital skills and, indeed, fusion power. They have a very exciting agenda and are playing an important role.

The short answer to my hon. Friend the Member for Hastings and Rye is that, through the White Paper, LEPs now have certainty about their overall role in the future and how they will fit together with mayoral combined authorities. LEPs will continue to exist where there are no MCAs; where MCAs exist, they can be folded in as the business sounding board where they are co-terminus. Where there is a part-in and part-out LEP, we will respond to whatever the desires of local partners are. They will also shortly have the funding certainty that a number have Members have asked about, because we will be writing to them very shortly.

The longer version of the answer to the great questions that colleagues have asked today is that LEPs have played a very important role in unlocking local economic potential and growth over recent years. Using the convening power that so many Members have talked about, partnerships have forged lasting and productive relationships between business, education and local government. At the same time, they have brought that crucial private sector perspective into local decision making, and indeed into combined authorities. They have delivered major capital investment schemes, some of which have been mentioned today, such as the £12 billion local growth fund and the £900 million Getting Building fund.

LEPs have been really instrumental in supporting businesses through the twin challenges of leaving the EU and responding to the pandemic. As if that were not enough, a lot of businesses are now turning to their LEP and growth hub for guidance and support regarding the current situation with the Russian invasion of Ukraine. As my hon. Friend the Member for Hastings and Rye said, that is just part of what is driving the 1.6 million visits that she talked about.

Over the past two-year period we have seen LEPs implement a series of actions to strengthen their governance and accountability, and it has made a big difference. In the most recent assurance review we found that every one of the 38 LEPs met our expectations on strategic impact and delivery, and all but one met our expectations on governance. The National Audit Office has noted the progress that LEPs have made over time. In its 2019 report, the NAO highlighted the marked improvement in LEPs’ financial transparency between 2016 and 2019. My hon. Friend Andrew Lewer touched on the marked progress we have seen on the removal of boundary issues between LEPs—an issue that the Government recognise can blur accountability and transparency. Although there is further to go, the majority of those boundary issues have now been dealt with.

I want to thank the people working in LEPs who might watch this debate or read the transcript, because the Government place a huge value on the contribution that they have made and will continue to make to their local economy. We are grateful to the talented, busy people who serve on LEPs for giving their skills, knowledge and expertise to the community and to improve the functioning of LEPs over time. We look forward to the next stage in our partnership with LEPs.

In some areas of the country, such as the Liverpool city region, West Yorkshire and Greater London, business leaders are effectively integrated into local decision-making structures through combined authorities and the GLA. As Members know, LEP partnerships extend beyond their immediate combined authorities. In a LEP census in 2016, nine out of 10 LEPs reported that they have full engagement with businesses of all sizes and LEPs reported engagement with higher education bodies, so it is not just about the interface with local politicians.

The bigger geographical scale—beyond the council scale—which a number of hon. Members have pointed to, gives LEPs a unique vantage point to bring people together on lots of different subjects. For example, one of the reasons why we use and resource them is to develop local industrial strategies, which have flowed into such things as innovation accelerators. Where innovation accelerators exist, we hope that LEPs and the equivalent bodies in the devolved areas will play a role in shaping what they do.

There are lots of other such examples but today, in 2022, the local growth landscape looks very different from when LEPs were first launched. We have seen the introduction of combined authority Mayors and a number of funds, such as the towns fund, which involves local stakeholders potentially at a sub-local authority level, bringing together lots of partners in the most deprived half of towns. For example, through the local growth fund and the forthcoming shared prosperity fund, we are empowering those in lower-tier local government. Of course, LEPs still play a crucial role in all the different things that they are running and their wider role is also a crucial part of the local growth story.

We are in the process of continuing on the journey of growth in the number of mayoral combined authorities. In the White Paper, we talked about nine new areas that have started talks with Government, including a combined authority deal for York and North Yorkshire and widening the geography of the north-east deal, as well as deepening the deals that have been done for the west midlands and Greater Manchester. Even as we do that, LEPs will continue to have a crucial role outside the areas where there are not electively accountable mayoral-type figures operating across a strategic geography. As my hon. Friend the Member for Hastings and Rye said, in many parts of the country there will be no other body on that kind of scale with that kind of strategic overview of the wider economy, straddling a number of different local authorities.

Following the LEP review, which has concluded, we have clarity about the end state that we want to get to and why we want to continue to have LEPs: for that convening role, the private sector expertise, and the ability to broker lots of different local stakeholders and drive forward a wider strategic vision for the area. That is why we have chosen to keep LEPs and why I pay tribute to them today.

We appreciate the urgent need for certainty of the kind that various hon. Members have raised. We are working to provide that clarity to LEPs at the earliest opportunity. I am sure that Members will appreciate some of the wider pressures that the Government are facing, given the international situation. It has been useful to have this debate today and to be able to express my thanks and pay tribute to the work of LEPs. We will be in touch with our colleagues in LEPs in the very near future.

Photo of Mark Pawsey Mark Pawsey Conservative, Rugby

One strength of LEPs is that the functional geography was delivered by the LEPs themselves. It was left to people in their own areas to determine what makes a sound economic unit. Does my hon. Friend intend to retain that autonomy within the LEPs, so that we keep that geography rather than relying on historical local government boundaries?

Photo of Neil O'Brien Neil O'Brien Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

Yes. My hon. Friend has given me a good opportunity to recognise that there is, I think—from my conversations with Coventry and Warwickshire—a strong desire to continue to work together. Without prejudging the outcome of anything, we have said that we will respond to what local places want to do where LEPs straddle areas, being partly in an MCA and partly outside. I am conscious, from all my conversations with those involved in Coventry and Warwickshire, that they have found it useful to work together. I was very impressed by the list of projects that my hon. Friend reeled off that they were leading in Coventry and Warwickshire. We are absolutely conscious of what local people want—yes, absolutely. Let me end by saying that we will continue to respond to what local places want and how they want to work together to drive forward their local economy and get more good jobs in all these different parts of the country.

Photo of Sally-Ann Hart Sally-Ann Hart Conservative, Hastings and Rye 5:16 pm, 16th March 2022

I thank the Minister for his fantastic response and Alex Norris for his contribution, as well as my hon. Friends the Members for Buckingham (Greg Smith), for Stroud (Siobhan Baillie) and for Northampton South (Andrew Lewer) for their excellent contributions, and my hon. Friend Mark Pawsey for his contribution through interventions.

LEPs clearly have a role to play and are an asset to all the constituencies represented today. They are not perfect, but they have the ability to harness the power of businesses and they have a commerciality about them that local authorities just do not have. When it comes to decision making on the if, why, how, when and what of spending money, it is really important that we have the LEP voice in our regions. LEPs really do encourage business growth. If we want to develop a culture of enterprise in this country, LEPs really do play an important role in that. They really do manage to convene partnerships, which is one of their strengths. I was therefore delighted to hear the Minister’s confirmation that LEPs will continue and will be funded and that clarity will be provided soon.

Question put and agreed to.

Resolved,

That this House
has considered the status of Local Enterprise Partnerships.

Sitting adjourned.