The County Councils Network (CCN) has called for the government to set out a “clear and decisive” framework for the transition of Local Enterprise Partnerships’ (LEPs’) functions to local authorities.
In his Spring Budget, chancellor Jeremy Hunt outlined that it was the government’s intention to transfer the functions of LEPs to councils to drive local growth. This process has already started in city areas with mayors and devolution deals.
Today (14 July) a new analysis by EY, commissioned by the CCN, has found that economies in England’s county and rural areas are forecast to grow at a slower rate by the middle of the decade than city and urban areas, most of which already have LEP functions and funding integrated through devolution deals.
Hence, the CCN has called for the government to abolish LEPs from next April and “set out a clear and decisive position this month with a policy framework for LEPs transitioning functions to upper-tier local authorities”.
Tim Oliver, CCN’s chairman, said: “EY’s analysis shows that county authorities are well placed to absorb the functions of LEPs from April 2024. However, we need government to be decisive and quick, otherwise county areas will continue to be left at an economic disadvantage.”
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EY’s report outlined that the 11 LEPs covering urban and city areas recovered their economic output lost from the pandemic in 2022, with their Gross Added Value forecasted to grow by 6.7% (£60bn) by 2025, compared to 2019.
In contrast, the 27 LEPs covering county and rural areas will grow at a rate of 3% (£29bn) between 2019 and 2025, with the areas recovering lost economic output from the pandemic in 2024.
EY’s analysis also found that despite receiving billions in public sector funding since their creation, LEPs have underperformed in generating a return on investment compared to the government’s predications.
“For too long, councils in county areas have been hamstrung in their ability to drive economic growth lacking the powers enjoyed by urban and city authorities with mayors.
“As today’s economic analysis shows, growth in those areas far outstrips county locations, with our rural areas only bouncing back to pre-pandemic output five years after the event. We need all the tools in our armoury to try and close the gap, and LEP functions would be another string to our economic growth bow,” Oliver added.
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