What is the future of Local Enterprise Partnerships (LEPs)?

Following a period of uncertainty, the government has now set out its position on the future of Local Enterprise Partnerships (LEPs). The uncertainty has meant many businesses have reduced their engagement with LEPs and has increased confusion around support available to firms. LEPs will continue to exist but they will be significantly reformed with less funding to distribute and be focused on undertaking an economic planning role in their locality where they remain. In many cases, they will be fully absorbed into democratic structures such as Mayoral Combined Authorities and Local Authorities.

What is a Local Enterprise Partnership? 

LEPs are business led partnerships formed between the public and private sector tasked with identifying local economic priorities and promoting initiatives which boost economic growth and create jobs. Established in 2010, the 38 LEPs have played a key role in economic development across England, creating local economic strategies and allocating public funds such as Local Growth Funding for transport, skills and regeneration projects and supporting Enterprise Zones, and Freeports.

How will LEPs integrate into local democratic institutions?

In recent years questions have been raised about how the LEPs should interact with democratic structures. Following the Levelling Up White Paper, it is now expected that LEPs will now integrate with existing and developing democratic institutions over the course of 2022/23.

What role will LEPs play moving forward?

The future role of each LEP will differ depending on local circumstances and the status of devolution in each locality. However, the government expects LEPs – or their local democratic institution - to:

1. Embed a strong, independent and diverse local business voice into democratic institutions.
2. Carry out strategic economic planning in partnership with local leaders
3. Continue to deliver functions on behalf of government departments. Future programme and funding decisions will be taken by each respective department. It is expected that the following would feature areas such as growth hubs, digital skills partnerships and international investment activity.
4. Where appropriate, help broker and support new or deeper devolution deals.

The government will provide core/transition funding of £375,000 for the full financial year 2022/23, – a 25% reduction in the grant previously received.

What does the CBI think about Local Enterprise Partnerships?

The CBI welcomes confirmation that LEPs will continue to play a key role in supporting local economies. The new guidance provides a pathway towards new arrangements across England and a broad framework for how LEPs, where they remain, will function, operate, and support local businesses.

However there continues to be uncertainty on the level of business engagement moving forward and the way in which business leaders can play an active role in shaping their local areas.

Our response to government and LEPs is:

1. Engage business in shaping and designing more impactful future structures  

It’s essential that business is actively engaged in working with local leaders to develop the devolution proposals put forward to government. CBI Regional Councils, with representation from senior leaders from across the economy, are well placed to develop ambitious and forward-thinking plans which can unlock private sector investment and drive growth and the creation of good quality jobs.

2. Ensure that the business voice is formally recognised in new structures 

Where a Combined Authority exists, business partnerships led by an independent business chair will now engage and influence decisions taken by local leaders such as an elected mayor or local authority. This should go a step further with the requirement that proposals for business support schemes be co-designed and endorsed by business partnerships.

3. Greater efforts are required to ensure representation is diverse and far-reaching 

The 2018 LEP Review set targets for better representation and diversity on Boards. It is essential that the new structures need to do more to reach out beyond ‘usual suspects’ and avoid being dominated by local government. We would encourage Mayors and local leaders to commit to the principles of the Change the Race Ratio campaign to help accelerate their efforts to attract and engage new business leaders in shaping the future of their places.

Click here to view the full government guidance.

For more information, please contact Matthew Lowe.