North East Devolution and Levelling Up

Local Enterprise Partnerships may be scrapped – report

The possible abolition of local enterprise partnerships (LEPs) is the latest object of intensifying media speculation about the content of the forthcoming Levelling Up White Paper, now delayed until 2022, as reported on this website today.

This time it is the Financial Times, quoted on the conservativehome website, that breaks the news. It says ministers are examining plans to scrap ‘many’ of the 38 LEPs, which are England’s regional development bodies, as part of the delayed White Paper.

Three government officials are quoted as saying that ‘serious conversations’ have taken place in the Department for Levelling Up about scrapping LEPs. The report also refers to a possible ‘shake-up’ of the LEPs.

LEPS are business led partnerships between local authorities and local private sector businesses.  They play a central role in determining local economic priorities and undertaking activities to drive economic growth and job creation, improve infrastructure and raise workforce skills

The North East region has two LEPs, NELEP (the North East LEP covering Northumberland, Tyne & Wear and County Durham) and Tees Valley LEP.

Tees Valley LEP was established in 2010 as one of the first wave of LEPs set up by the Coalition government of Conservatives and Liberal Democrats amid enthusiasm among many in the area at their separation and liberation, as they saw it, from the Newcastle-based North East Regional Development Agency (RDA). NELEP was founded the following year.

Both, along with LEPs throughout England, submitted ten-year strategic economic plans (SEPs) to the government in 2014 as a basis for development funding.

Since that time the two LEPs in the region have followed very different organisational paths, largely as a result of the divergent political developments in their areas. When Tees Valley’s five councils decided in 2016 to form the Tees Valley Combined Authority (TVCA) and do a devolution deal with the government, it and the Tees Valley LEP came together as one organisation, with a shared purpose and brand.

NELEP never integrated as closely with local politicians as its Tees Valley counterpart, and since 2019, when the North East Combined Authority (NECA) split following its rejection of a devolution deal, NELEP has had to work with two combined authorities – the rump NECA, south of the Tyne, which still has no devolution deal, and the new North of Tyne Combined Authority (NTCA) which does have a deal – and a mayor.  

COMMENT – here we go again

Seen in a historical context, the threat to scrap LEPs has a sense of déjà vu. If the experience of what could broadly be seen as their predecessor institutions over almost the past half century is anything to go by, they have nearly reached the end of their life expectancy.

Tyne and Wear Metropolitan County Council, though different from a LEP in many ways – all its members were elected, for example – was similar in the one important respect of having responsibility for economic development. The county council was created by one Tory government, Ted Heath’s, for sensible reasons and abolished by another, Margaret Thatcher’s, 12 years later for ideological ones.

One North East, the regional development agency (RDA), was established by a Labour government, Tony Blair’s, also for sensible reasons, and abolished 12 years later by a Coalition government, David Cameron’s, again for ideological ones.

The Cameron government that abolished RDAs replaced them with LEPs for ideological reasons and now, 11 years later, comes the news that a Conservative government, Boris Johnson’s, might be about to replace or simply abolish them for reasons as yet unknown.

Going back even further than these changes, there has come – and gone – a long series of economic plans for the region dating back at least to the Hailsham Plan of 1963.

A political inability to think and act in the long term, to establish institutions and draw up plans and then stick with them, has surely been a major contributory factor, alongside inadequate funding, to the failure to level up the North East over all those decades.

Of course LEPs, like other-publicly funded bodies, should be subjected to periodic reviews to ensure they are doing a good job. And they are reviewed, annually. In fact, Helen Golightly, chief executive of NELEP, made this clear in an update on the NELEP website on September 1 – if anyone outside the LEP ever read it.

In a piece explaining ‘how and why we are working with government on the ongoing LEP review’, near the beginning and again near the end of what is a largely self-congratulatory commentary of NELEP’s performance, are to be found two short references to possible institutional change.

First, Ms Golightly writes: ‘LEPs are not statutory bodies, so it is right that we are reviewed to check that our priorities and set up remain fit for purpose. Government reviews of our performance are not new – they happen every year and have always been incredibly favourable for us here at the North East LEP’.

Later she writes: ‘I personally believe that all organisations need to challenge themselves and be challenged to improve. The pace of change has accelerated since the start of the pandemic and government is right to check that the LEP business model is still fit for purpose and how it should adapt to maximise and target impact’. 

So it is clear that NELEP recognises the possibility of change in theory. But the message is also reassuring – these reviews are routine and have always worked out fine in the past; if change is needed it is down to the pandemic. Ms Golightly’s concluding sentence suggests NELEP is far from preparing for a major shake-up, let alone abolition, in practice: ‘The North East LEP stands ready to continue to utilise it’s (sic) leadership, talent and partnerships to continue to drive economic growth in the region’.

Actually, the reviews don’t always work out fine. As reported here on November 26, this author discovered during research that in 2017-2019 the NELEP board held no less than nine consecutive inquorate meetings; in seven of those it was council leaders whose absence caused the problem. The government noted the same issue and NELEP officials had to assure senior civil servants that the matter would be raised with board members. (source: NELEP board minutes).

However, that was more than two years ago, and there is no indication in Ms Golightly’s update three months ago that NELEP was seriously contemplating major institutional change, whether because of local failings or as part of a national shake-up. The FT’s report probably came as a surprise and a shock.

This website argued for LEP reform, including greater transparency, as recently as November 26. So if reform – a shake-up – is what the government has in mind, then the outcome may be an improvement.

But in a region where the local politics is fractious and uncollaborative, where councils north and south of the Tyne cannot even agree after more than five years of division on common governance for a shared economy, NELEP provides – as far as one can tell of a body that meets in private – an oasis of stability and professionalism at both executive level and on the board, at least among the private, education and voluntary sectors which form the majority.

So while this website argues for change at the local political level in the shape of a devolution deal covering all seven North East councils north and south of the river, major changes beyond sensible reform at the LEP level are not what the region needs. Gove should avoid change for change’s sake just because the LEPs’ supposed 12-years timespan is nearly up.