In the Industrial Strategy (published in November 2017) , Government committed to work with Local Enterprise Partnerships to bring forward reforms to leadership, governance, accountability, financial reporting and geographical boundaries. This new Ministry of Housing, Communities and Local Government report (24th July 2018) marks the conclusion of the Ministerial review of Local Enterprise Partnerships and sets out Government’s expectations of their roles and responsibilities. Government will support Local Enterprise Partnerships to meet this level of ambition by working with them to strengthen leadership and capability, improve accountability and manage risk, and provide clarity on geography.
It states “It is critical that Local Enterprise Partnerships are independent and private sector led partnerships that are accountable to the communities they support. At the same time, it is important to set out a model that will underpin future national and local collaboration. This will be essential to the development of Local Industrial Strategies and in the context of the future UK Shared Prosperity Fund.”
This document sets out the conclusions of the Department’s policy review. It includes a series of Government commitments alongside a number of additional changes that Government will work with Local Enterprise Partnerships to implement. I’ve highlighted below in bold some interesting developments that could potentially bring about change in the current landscape.
Role and responsibilities:
- Publish a statement on the role and responsibilities of Local Enterprise Partnerships. Local Enterprise Partnerships will focus on enhancing productivity. This will be achieved through the development and delivery of their Local Industrial Strategy.
- Publish a further statement on Local Industrial Strategies to guide locally-led work. This statement will be published over the summer. Government will aim to agree Local Industrial Strategies with all areas of England by early 2020.
- Commission an annual economic outlook to independently measure economic performance across all Local Enterprise Partnerships and the areas they cover.
Government will support all Local Enterprise Partnerships to:
- Develop an evidence-based Local Industrial Strategy that sets out a long-term economic vision for their area based on local consultation.
- Publish an annual delivery plan and end of year report. This will include key performance indicators to assess the impact of their Local Industrial Strategy, funding and interventions. It will inform objective assessment on Local Enterprise Partnership performance both nationally and locally.
Leadership and organisational capacity:
- Increase regular dialogue with Local Enterprise Partnerships. This includes the Prime Minister chaired Council announced in the Industrial Strategy, as well as a senior official sponsor for every Local Enterprise Partnership from across government departments.
- Actively work with Local Enterprise Partnerships to advertise opportunities for private sector leaders to become a Local Enterprise Partnership Chair when vacancies emerge. While these are not public appointments, we will offer to list vacancies on the Centre for Public Appointments website.
- Offer an induction and training programme for Local Enterprise Partnership board members and officers on working with Government. We will work with the LEP Network, Local Government Association and other professional development bodies to develop this programme.
- Provide up to £20 million between 2018-19 and 2019-20 in additional capacity funding to support Local Enterprise Partnerships to implement the review and to provide the strategic and analytical capability needed to develop ambitious Local Industrial Strategies.
Government will support Local Enterprise Partnerships to:
- Consult widely and transparently with the business community before appointing a new Chair; and introduce defined term limits for Chairs and Deputy Chairs in line with best practice in the private sector.
- Establish more representative boards of a maximum of 20 persons with the option to co-opt up to five additional board members. Our aspiration is that two thirds of board members should be from the private sector;
- Improve the gender balance and representation of those with protected characteristics on boards with an aim that women make up at least one third of Local Enterprise Partnership boards by 2020 with an expectation for equal representation by 2023, and ensuring all Local Enterprise Partnership boards are representative of the businesses and communities they serve.
- Provide a secretariat independent of local government to support the Chair and board in decision making.
- Develop a strong local evidence base of economic strengths, weaknesses and comparative advantages within a national and international context. This will be supported by robust evaluation of individual projects and interventions.
Accountability and performance:
- Continue to maintain overall accountability for the system of Local Enterprise Partnerships and local growth funding, and implement in full the recommendations of the Ney Review and any future recommendations that may be made as the performance of Local Enterprise Partnerships is scrutinised and reviewed.
- Assess and publish annual performance against quantitative and qualitative measures set out within Local Enterprise Partnership delivery plans.
- Set out within a revised National Assurance Framework a clear statement on an escalating approach to intervention in any instances where Local Enterprise Partnerships demonstrate that they are found to be underperforming.
- Develop with the LEP Network and Local Enterprise Partnerships a sector-led approach to assessing and improving performance through regular peer review. Government will support all Local Enterprise Partnerships to:
- Have a legal personality, such as incorporation as companies, or mayoral combined authorities or combined authorities where they exist.
- Set out clearly and transparently the responsibilities of the Chair, Board, Director, and Accountable Body, including over spending decisions, appointments, and governance.
- Actively participate in relevant local authority scrutiny panel enquiries to ensure effective and appropriate democratic scrutiny of their investment decisions.
- Hold annual general meetings open to the public to attend to ensure the communities that they represent can understand and influence the economic plans for the area.
“On balance, Government considers that retaining overlaps dilutes accountability and responsibility for setting strategies for places and so will seek to ensure that all businesses and communities are represented by one Local Enterprise Partnership. Close collaboration between Local Enterprise Partnerships will replace overlapping responsibilities. In looking to remove overlaps, we will also need to ensure that Local Enterprise Partnerships are operating over a significant enough scale to provide the strategic direction and efficient delivery of future programmes.”
- Ask Local Enterprise Partnership Chairs and other local stakeholders to come forward with considered proposals by the end of September on geographies which best reflect real functional economic areas, remove overlaps and, where appropriate, propose wider changes such as mergers. Government will respond to these proposals in the autumn and future capacity funding will be contingent on successfully achieving this.
Government will support all Local Enterprise Partnerships to:
- Collaborate across boundaries where interests are aligned when developing strategies and interventions to maximise their impact across their different objectives.
Mayoral combined authorities:
“Greater alignment and collaboration between mayoral combined authorities and Local Enterprise Partnerships is administratively efficient and leads to a greater economic impact, whilst still retaining private sector acumen in decision making. The precise nature of the relationship between these two institutions, however, will need to take account of the governance arrangements established for each area.”
- Consolidate its engagement with mayoral combined authorities and their Local Enterprise Partnerships with a collaborative approach to agreeing a Local Industrial Strategy.
In mayoral combined authority areas, we will work with each Local Enterprise Partnership and mayoral combined authority to:
- Ensure Local Enterprise Partnerships have a distinctive role in setting strategy and commissioning interventions to drive growth, jobs and private sector investment.
- Require Local Enterprise Partnerships and mayoral combined authorities to develop local agreements which clearly set out roles and responsibilities and accountability.
- Encourage Local Enterprise Partnerships and mayoral combined authorities to move towards coterminous geographies where appropriate in line with the wider discussions on Local Enterprise Partnership geographies.
Let’s watch this space over the coming months.