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Removal of Central Government funding for LEPS

The announcement that the Government will no longer fund Local Enterprise Partnerships (LEPs) is a blow, continuing the stop/start nature of business support in the UK.

The LEPs were created to fill the gap caused by the abolition of the eight (plus London) Regional Development Agencies (RDAs), which were established in 1998 as a key Labour government policy for
regional economic growth. Similar activities were carried out in Wales, Northern Ireland and Scotland.

In 2010 the UK coalition government announced the abolition of the RDAs which took place in 2012, with a view to reducing the government deficit. By that time, RDA funding was running at close to £2 billion p.a. and was beginning to have real impact in the North-East, North-West and West Midlands. There was no direct replacement for the RDAs as LEPs did not at first receive funding from central government, and local councils did not receive an equivalent injection of income from central funds, having been called upon to make savings and support similar initiatives. However, despite a fraction of the funding, LEPs are beginning to be a useful source of connectivity for business and innovation in the regions.

The announcement of the abolition of central Government funding for LEPs has left this area of support for business and innovation in confusion and disarray. The better LEPs are making positive moves to continue providing business support by integrating with their local regional authority or county council, but in other regions there will be a mish-mash of multiple organisations (public and private) competing for funding, taking considerable time to resolve.

We agree with Jane Galsworthy, MD of Oxford Innovation, in her LinkedIn post, that this is going to be messy especially for areas without a devolution deal, due to lack of coordination between the upper and lower tier authorities and the shifting responsibilities for UKSPF (Shared Prosperity Fund) and Growth Hubs.

One of the key objectives of UKSPF was to empower local leaders and communities to boost productivity and living standards. Hence it was typically owned by lower tier authorities who, working with public and private organisations, delivered growth hubs and general business support to businesses in their areas, most notably SMEs which are the main drivers of innovation and productivity.

The UK needs a clear strategy to support businesses driving growth and commercialising innovation, thereby boosting local productivity and living standards, along with consistent long-term funding for the local ownership and delivery of this strategy.