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LOCAL GROWTH?

LOCAL GROWTH?. The future of local economic development in England www.michaelwardconsulting.co.uk. 1. Contents. Timeline Spending Review Local Growth White paper RDAs and LEPs Regional Growth Fund. 2. The Paradox of Local Economic Development. Regional machinery being dismantled

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LOCAL GROWTH?

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  1. LOCAL GROWTH? The future of local economic development in England www.michaelwardconsulting.co.uk

  2. 1. Contents • Timeline • Spending Review • Local Growth White paper • RDAs and LEPs • Regional Growth Fund

  3. 2.The Paradox of Local Economic Development • Regional machinery being dismantled • Local development the only show in town BUT • Unemployment set to rise • Record youth unemployment • Very little money • Much reverts to centre

  4. 4: The timeline 2010 2010 8 June Start of spending review 22 June Emergency Budget 20 Oct Spending Review 2010 28 Oct Local Growth White Paper 17 Nov Skills Strategy Dec Introduction of Localism Bill Local Government Finance Settlement

  5. 5: Timeline 2011 21 Jan Deadline for 1st round bids to LGF 23 Mar Budget; announcement of new structures for EU funding 31 Mar End of existing welfare to work contracts 01 Apr First LEPs operational 2012 31 Mar RDAs abolished

  6. 6: Spending Review Spending Review: • Protects spend on major infrastructure – especially in London (Crossrail, Thameslink); • Maintains science budget in cash terms; • Increases spend on adult apprenticeships; But: • Cuts in CLG funding to local government >25%; • BIS cuts of 40% in higher education, 16% in other areas.

  7. 7: Local Growth White Paper • “new approach to local growth” (WP) • “shifting power away from central government to local communities, citizens, and independent providers.” (WP) • “The government is therefore determined that all parts of the country benefit from sustainable economic growth.” (WP) • Detail on LEPS and Regional Growth Fund; • Back up economics document.

  8. 8: RDAs and LEPS I Coalition Agreement, May 2010: “We will support the creation of Local Enterprise partnerships – joint local authority-business bodies brought forward by local authorities themselves to promote local economic development – to replace Regional Development Agencies (RDAs). These may take the form of the existing RDAs in areas where they are popular.” (CA) …last sentence subsequently dropped…

  9. 9: RDAs and LEPs II • Costs of RDA abolition expected to exceed £1.5bn;(RDA budget 2010/11 = £1.4bn); • Closure by 31.3.2012; • Substantial redundancies this year; • Assets likely to transfer to HCA in first instance; • For many RDA functions (Innovation; inward investment; skills), main role goes to centre; • Business advice from a national website and a national call centre.

  10. 10: RDAs and LEPS III • 56 LEP bids received by Sept. deadline; • 1st wave of 24 approved 28 October; • Total of 29 announced by early 2011; • Partial coverage of country; • Different scale of LEPs – eg Kent/Essex/East Sussex - pop 3.9 m (North East 2.64 m); • CLG continuing to work with partners to establish LEPs elsewhere.

  11. 11: RDAs and LEPS IV Criteria for LEP approval: • Support from business; • Economic geography • Local authority support • Added value and ambition

  12. 12: RDAs and LEPS V • No Government revenue funding for LEPS, except for small capacity building fund; • LEPS “will be expected to fund their own day-to-day running costs”; (WP) • Limited prospects of Council funding given likely local government finance settlement; • LEPs “may wish to submit bids to the Regional Growth Fund, but will not receive preferential treatment.” (WP) • ?little executive capacity or staff?

  13. 13: RDAs and LEPs VI Critical comments I: “there is a strong view amongst the business community that many LEPs lack the ambition to make a significant economic impact, undermining our agenda for growth….Lack of credible business representation, negotiations dominated by local politics.” Mark Prisk, Business Minister, Oct 2010

  14. 14: RDAs and LEPs VII Critical comments II: • “Does a lump of money get thrown out there as a sticking plaster or is it part of a long-term strategy for sustainable growth?” – chair, Leeds LEP • “James Newman, chair of the South Yorkshire LEP, warned…[against] abandoning much needed investment too soon in many areas of England.” - FT, 21.01.11

  15. 15: The Regional Growth Fund I £million 2011-2 2012-3 2013-4 495 505 420 Closing date for 1st round bids: 21 January 2011

  16. 16: The Regional Growth Fund II • Min bid threshold £1million; • For “projects with significant potential for private sector growth and employment”; (CSR) • “supporting in particular those areas and communities that are currently too dependent on the public sector.” (CSR)

  17. 17: The Regional Growth Fund III “All areas of England are eligible to bid for the Regional Growth Fund, although some parts of the country. Particularly where there is currently high employment, low levels of deprivation and a vibrant private sector, may struggle to demonstrate how they meet the second objective of the Fund.” (ie, support for areas too dependent on public sector…)(WP)

  18. 18: The Regional Growth Fund IV • First Round RGF substantially over bid; • Rumours of State Aid issues

  19. 19: Skills • “The RDA’s role in skills strategy setting and commissioning training provision will cease, and in future all public funding for adult skills provision will be routed through the Skills Funding Agency…” (WP) • No formal role for LEPs; • LEPS “will not have formal powers to direct or control the activity of skills providers”; • Consultation on colleges’ business plans;

  20. 20: The Work Programme • Work Programme replaces existing programmes from summer 2011; • Framework list of preferred suppliers issued by DWP 25 Nov 2011; • Contracts to be let on a regional basis by DWP.

  21. 21: Housing and the HCA • Wider changes in housing policy – replacement of social housing by new affordable programme; end of market renewal pathfinders; • Substantial budget reductions • London division of HCA being merged into GLA;

  22. 22: London is (still) different • LDA effectively being abolished by major budget cuts; • Funding only for Olympics and existing commitments; • Detail of structures in Localism Bill; • LEPS – London now eligible; City Hall and London Councils working towards a London-wide LEP; details awaited.

  23. 23: Future of European funding • Definitive announcement due in Budget; but… • Strong suggestion that core teams to be transferred from GOs/RDAs to CLG

  24. 24: Headline Messages • Deficit reduction is king; • There’s still no money; • Much still going to the centre; • Not at all clear what LEPs will actually do.

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