Local Enterprise Partnerships

Neil O'Brien Excerpts

Wednesday 16th March 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O'Brien)]

It is a pleasure to serve under your chairmanship, Ms Rees. I start by thanking my hon. Friend the Member for Hastings and Rye (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 the Member for Northampton South (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.

[Mark Pawsey]

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?

[Neil O'Brien]

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.