In a significant policy shift, the government confirmed on Friday in a letter sent to the 36 Local Enterprise Partnership (LEP) that operate across England including Cumbria LEP, that it will cease funding for Local Enterprise Partnerships, directing financial resources towards financially strained local authorities.
In February, the government announced that it was ‘minded’ to enable the functions of LEPs to be delivered by local government in the future. The announcement on Friday confirmed that by March 2024 government will support upper-tier councils or combined authorities to absorb the functions of LEPs.
In England, local enterprise partnerships LEPs are partnerships between local authorities and businesses, set up in 2011 by the Department for Business, Innovation and Skills to help determine local economic priorities and lead economic growth and job creation within the local area. They carry out some of the functions previously carried out by the regional development agencies which were abolished in March 2012.
In 2011 Business groups slammed Eric Pickles’ launch of the LEP network, branding it a top-down quango and a waste of tax payers’ money.
Cumbria LEP was established as a company limited by guarantee in December 2018 having operated since 2011 with no formal company structure, The LEP is based in council owned office space just outside Penrith at Redhills.
In the letter seen by Penrith.Town, Levelling Up Minister Dehenna Davidson has written to the boards of Local Enterprise Partnerships confirming that funding for Local Enterprise Partnerships (LEPs) will end from April 2024 and strategic economic planning will transfer to councils and Combined Authorities.
Here in Cumbria this will result in the funding and economic planning transferring from Cumbria LEP and splitting between the two new unitary authorities at Cumberland Council and Westmorland and Furness Council, as Cumbria has no combined authority or county wide upper tier authority since the local government reorganisation in April.
In the letter Government claim an information gathering exercise identified “overlap between some of the functions being discharged by LEPs, local authorities and combined authorities”.
Starting April 2024, these critical responsibilities will be transferred to ‘top-tier’ authorities such as Westmorland and Furness Council.
The government hopes this will encourage district councils, like Westmorland and Furness Council, to enter into in power-sharing devolution agreements that could see a combined authority and directly elected Mayor for Cumbria.
Government has confirmed it will provide “some revenue funding to local and combined authorities” but is vague on the details.
The County Councils Network, has been the leading voice in arguing for LEP functions to be transferred to councils for a number of years.
Speaking after the announcement on Friday Cllr Tim Oliver, CCN Chairman said, “Today’s decision by the government is a decisive one and very welcome, drawing a line under recent uncertainty and allows us to get on with integrating Local Enterprise Partnership (LEP) functions into upper-tier councils and combined authorities.”
“We are pleased that the government has listened to the calls of the County Councils Network (CCN) that it is upper-tier local authorities who have the necessary scale and expertise to make this transfer a success, while also confirming that transition funding will remain in place for local authorities next year as they absorb LEP functions. It is important that transition and longer term funding is sufficient to fund all new burdens and provide the necessary resources to enable councils to make the most of these new functions to support local economies.”
“While the government have clearly set out that LEP functions should be transferred to upper-tier councils, it still allows LEPs to continue to operate independently without government support. While recognising these are private enterprises which the government cannot abolish, this could create duplication and confusion locally, and therefore they should only continue to function following consultation with the relevant upper-tier council.”
In response to the announcement that the government will no longer fund LEPs after March 2024, LEP Network Chair Mark Bretton said “The announcement today marks a watershed moment for the LEP Community and should be seen as nationally significant for the economy. After five years and three reviews we now have recognition of what really matters - making a difference in our economies and most importantly that the way to do this is best decided locally. The government clearly recognises this, acknowledging that, as private enterprises, LEPs may choose to continue their business representation, strategic economic planning, and responsibility for the delivery of government programmes, if that is what local councils and authorities want.
We will continue to work with our partners like the County Council Network and Local Government Authority to ensure the transition is as effective as possible.”
Cumbria LEP has seen criticism over recent years for a string of failures with millions in government funding lost for Cumbria
In 2020 government announced the Getting Building fund with all those “Shovel Ready” projects, Cumbria LEP focused on a Vertical Farm that it was said would deliver 360 new jobs and innovation in a net zero vertical farm that would produce more energy than it used.
Government awarded Cumbria Local Enterprise Partnership £10.5m from the Getting Building fund with £5m of the fund invested to deliver strategic road improvements on the A595 at Bothel and £5.5million invested in a Vertical Farming Centre of Excellence at Lillyhall in West Cumbria.
At the time Cumbria LEP said the Vertical Farming Centre of Excellence “will create one of the largest integrated vertical farming operations in the UK. This will complement Cumbria’s existing exceptional food production in meat and dairy and will create 360 new jobs, unlock £48.8m of private sector investment and create a 70,000m 2 carbon neutral facility.”
In late 2022 Cumbria LEP’s Investment Panel Chair said “that continuing with the Vertical Farm scheme raised some concerns due to the outstanding information. He felt that it was the project’s potential that had resulted in CLEP keeping faith with the scheme to date.”
Another LEP investment Panel member said “They observed that the original application had been stated as ‘shovel ready’ and a ‘worldwide centre of excellence’, and it was now apparent that it was neither of these things.”
The Project failed to materialise resulting in the loss of millions in investment into Cumbria, one of many failed projects others including the failed Cumbria LEP bid to create a freeport that was considered out of scope by Government. Another failed LEP investment of Cumbria growth funding was the investment of over £4.5 million into Carlisle Airport with large parts of the funding spent on developments at South End airport to improve connectivity to Carlisle airport.
Cumbria LEP and the two district councils in Cumbria, have so far given no response to the announcement by government on Friday that the LEP funding and roles will end and transfer to the councils from 2024.
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