The government’s intention to transfer the functions of Local Enterprise Partnerships (LEPs) to councils, announced in chancellor Jeremy Hunt’s budget, has been “strongly supported” by local government finance leaders.
In his statement to the House of Commons on 15 March, Hunt promised to deliver “long-term sustainable growth” and “prosperity for purpose”. He announced that the government would launch a consultation into transferring responsibilities for local economic growth and development from LEPs to local authorities from April 2024.
Hunt also announced that local authorities would receive an additional £200m of capital funding for regeneration and £63m for leisure centres. This follows warnings from the sector that councils may have to scale back on infrastructure projects due to inflation.
Tim Oliver, chairman of the County Councils Network (CCN) stated that he welcomed the range of “positive announcements” outlined in Hunt’s budget and “strongly supported” the news on LEPs.
He said: “The budget took important steps forward in enabling local leaders to drive local growth. CCN strongly supports the government’s intention to transfer functions of LEPs to councils.
“County and unitary authorities are best placed to deliver local skills and business support programmes, in close collaboration with business partners, and we will work closely with ministers to develop their proposals through the consultation.”
However, Jack Shaw, senior research fellow at IPPR North, told Room151 that the move to transfer the functions of LEPs to councils raised many questions about how this will work out in practice.
He said: “Business leaders play an important role in driving local economies, but LEPs have been undervalued for some time and the die was cast when the levelling up white paper committed to integrating them with combined authorities.
“There are outstanding questions about how this will work in practice given not all places have combined authorities, but now is the time to make the transition and empower democratically-elected authorities to drive economic growth in partnership with business.”
Given this is a ‘back-to-work’ budget, it is disappointing there is no further investment in adult social care, public health and children’s services, which all play a vital role in supporting economic growth and helping people back into work, alongside boosting people’s health and wellbeing.
12 new investment zones
In his “budget for growth”, Hunt also chose to focus on the government’s long-term commitment to level up the country by announcing the creation of 12 new investment zones, which will each receive £80m over five years. Alongside this, he also announced that there will be a third round of the levelling up fund to come.
Michael Hudson, president of the Society of County Treasurers and executive director of finance and resources at Cambridgeshire County Council, told Room151: “On investment zones, it will be interesting to see the detail to see how much has moved on from last year when this created confusion over how it would actually work, including planning.”
Sir Stephen Houghton, chair of the Special Interest Group of Municipal Authorities, welcomed the chancellor’s levelling up focus.
He said: “There are several elements of today’s Budget that are welcome and will support ‘levelling up’, including funding for new regeneration projects, the Levelling Up Partnerships, a better focused investment zone policy and some funding for the leisure sector.”
However, Houghton warned that the “piecemeal investments” announced by Hunt were “at risk of counting for little if they are not delivered alongside proper investment in local public services, while moves to further roll-out the discredited system of business rates retention will widen the growing gap between the poorest and wealthiest areas”.
In other major moves, Hunt chose to abolish the lifetime allowance on tax-free pension contributions, which currently stands at £1.07m. He also announced measures to boost workforce participation and target the over-50s, the long-term sick, disabled and benefits claimants.
Alongside other council leaders, James Jamieson, chairman of the Local Government Association, said: “A third round of levelling up funding will give councils the opportunity to forge ahead with ambitious plans to transform their communities and unlock potential for more local growth.
“Given this is a ‘back-to-work’ budget, it is disappointing there is no further investment in adult social care, public health and children’s services, which all play a vital role in supporting economic growth and helping people back into work, alongside boosting people’s health and wellbeing.
There are outstanding questions about how this will work in practice given not all places have combined authorities, but now is the time to make the transition and empower democratically-elected authorities to drive economic growth in partnership with business.
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