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First published on the website of our podcast LED Confidential.
Local Enterprise Partnerships (LEPs) have been a key part of England’s economic development landscape for over a decade. But in August 2023, the government confirmed that it would no longer sponsor and fund LEPs. This decision raises important questions about the future of local economic development. In the latest episode of LED Confidential, Mike and David are joined by Chris Starkie, the former CEO of New Anglia LEP which works across the counties of Norfolk and Suffolk in the East of England. He is now the Director of Growth and Investment at Norfolk County Council. In the episode, Chris, David, and Mike discuss the LEP story from 2010 to 2023 and the key issues that will influence successor arrangements.
The transition from Local Enterprise Partnerships to successor arrangements
The Government's decision to replace LEPs had been expected for 2-3 years, so the August confirmation was no surprise. Some in the sector argue that there is a strong rationale for streamlining sub-national leadership and governance of economic development with new Mayoral and Combined Authorities, and as devolution spreads to county areas. Others, however, express concerns that it might weaken the voice of businesses and local communities in economic development.
Chris explains that in the transition from LEPs to successor arrangements the emerging approach in Norfolk and Suffolk is one of collaboration. The two counties are working together to ensure a smooth transfer of functions, expertise, and funding. But transition challenges vary from place-to-place depending on factors like the maturity and cohesion of devolved arrangements, and the extent of consensus between county and unitary authorities in specific sub-regions. The goal is to prevent the kind of cliff-edge scenario faced by LEPs when they were first established.
The role of intermediate tiers
LEPs belong to a category of governance that at LED Confidential we call the 'intermediate tier'. This is the space between national and local government. At its best, the intermediate tier provides the necessary scale and critical mass for agreeing and enabling strategic economic change. It can play a vital role in coordinating economic development across administrative boundaries.
The episode covers how the intermediate tier can add significant value, particularly in bringing together disparate stakeholders around a cohesive local economic plan. Organisations in the intermediate tier also serve as honest brokers, conveners, and coordinators. But they need to guard against the risks of becoming merely a level of central government field administration, or too challenging to the ambitions and democratic accountabilities of the local authorities within their geography.
The role of national government in designing economic development bodies
The role of national government in shaping the future of local economic development is crucial. The episode discusses whether more local government involvement in defining intermediate tiers would lead to a more stable and enduring setup.
Chris points out that the level of central government commitment to devolution is a critical factor. There is a paradox. The current levels of fiscal devolution and local financial headroom in England are so constrained that the sub-national system relies almost totally on central government funding. But the more central government funds intermediate and local economic institutions the more it expects to direct what type of institutions receive that funding and how they spend it.
Reflections on future agendas
The field of economic development is constantly evolving. Automation, demographic change, and sustainability are just some of the challenges and opportunities that lie ahead for successor arrangements to LEPs across England.
In the episode, Chris stresses the importance of preparing the workforce for the future. Automation is likely to have a significant impact on the workforce, both in manufacturing and
the services sector. Investing in the skills and training to ensure that our workforce is ready to meet the demands of the future economy, will be close to the top of the in-tray.
Demographics is another important consideration. Regions like Norfolk and Suffolk are facing the challenge of a shrinking working-age population. This means that there will be fewer people to support the economy. Chris argues that we need to find ways to attract and retain talent, to support older people to stay in the workforce, but also to deliver productivity improvements that, for some industries and services, deliver increasing outputs with fewer workers.
Sustainability is another key agenda item. Chris stressed the need for local areas to fully grasp the job opportunities and potential economic growth associated with sustainability initiatives, such as retrofitting and renewable energy. Throughout the episode with Chris Starkie, it was evident that while the context may change, the fundamental building blocks of economic development remain constant. Whatever new institutional arrangements are put in place post-LEPs, they will need the capacity and capabilities to manage changes in skills and employment, enterprise and innovation, skills and infrastructure, green economy, inequalities, and inclusion, well.
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