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Let's put some enterprise into LEPs1

Finance | Robert Ashton | 13 Apr 2012

With a dwindling government pot, communities need to take ownership of their Local Enterprise Partnerships, says Robert Ashton.

I'll be honest with you. I'd grown cynical and sometimes even critical of economic development quangos. Too often they seemed to be convenient vehicles via which government handouts were, well, handed out. Staffed by bureaucrats and governed by boards made up of the usual suspects, they wrote strategies and claimed credit for any coincidental jobs created or businesses established.

So I kept away from the sometimes heated debates about who, how and where Local Enterprise Partnerships should be. I also ignored what appeared to be an emerging, familiar pattern of activity. Government invites bids for this, that or the other and all the LEPs compete for the cash. It was all starting to look like more of the same.

Then I went to my own LEP's annual conference. New Anglia LEP covers Norfolk and Suffolk, the two counties I care about most. I was raised in one, live in the other and work in both. The LEP board contains few of the usual suspects. Instead there are busy people with no need to be seen to associate with any quango. I started to listen.

The keynote speaker was the articulate and surprisingly individual chief economist from the Institute of Directors, Graeme Leach. He stated what to only a few was obvious: that the money needed to kick-start our stalled economy will come from corporate reserves, not government debt.

And that was when the penny dropped. I realised that the real opportunity was not to bid for a bigger share of a declining government pot. Instead they should bid to the local enterprise community. After all, this group will be the ultimate beneficiary of that investment. Yes it's about creating new jobs and making sure everyone has the opportunity to be involved. But it's surely also about the business community really taking the lead.

Rooted in the local business community

It seems to me that for an LEP to really make a difference, it has to really belong to local entrepreneurs. It's about much more than a volunteer board debating and agreeing the strategies that pave the way; it's also about investing to pay the way too!

The parallel with community enterprise is obvious. If a village wants to save its shop, the people raise the capital themselves to take it over. Local share issues make it possible for neighbours to fund and collectively own the shop. Why should the LEPs be any different?

Just suppose we all paid £100 per employee to our LEP every year. For most, it's less than we spend on tea bags for the office. In my LEP area, if only 5 per cent of the self employed and 10 per cent of private sector employers signed up, an annual fund of £4.8m would be created. It would also make the LEP more democratic, with shareholders electing the Board. Finally it would also encourage greater collaboration between members of this committed community of interest.

I suspect that most LEPs are staffed and guided by people with public sector backgrounds. Funding from them has always come from government. We with community enterprise experience need to challenge that outlook. The future will emerge from the grassroots, not Whitehall. Are you ready to be part of that new future?

Some statistics:

LEP stats

• 60,000 enterprises
• £6m target raise this year
• £8m next
• 190k public sector jobs in new anglia

Nomis figs for New Anglia

• 623,000 employees
• 108,500 self employed
• So 433,000 private sector employees

If 5 per cent self employed join and pay £100 pa each that would be 5,250 @ £100 - £525,000

If 10 per cent of employers join, that's 43,000 employees at £100pp pa  £4.3m

Who's Who: Robert Ashton