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Local Enterprise Partnerships

Volume 759: debated on Wednesday 11 February 2015


Asked by

To ask Her Majesty’s Government what assessment they have made of the effect of local enterprise partnerships on the economy and key skills in their local areas.

We have not made an overall assessment in quite those terms. It is early days, especially for the Local Growth Fund, which starts paying out in April. LEPs are locally accountable, but we have asked them to develop monitoring frameworks so we can access progress in the important areas of growth and skills. Of course, recently we also announced investment of a further £1 billion in local economies across England.

I thank my noble friend for her response. Since health is a primary concern among the public, it is somewhat surprising that the Heart of the South West LEP refused to assist the local FE college, working with one of the largest hospitals in Somerset, to develop a joint health and care career college on the basis that health was not one of its priorities. Does the Minister agree that that particular LEP should revise its priorities?

That is primarily a matter for the LEP, but we undertook a robust assessment of the strategic economic plan for each LEP in allocating the funding—both the £1 billion recently and the £6 billion last year. However, I am very pleased that the noble Baroness has brought this project to public attention, and that she will continue to discuss these claims with the local enterprise partnership. Like her, I live off the A303; the new road investment is changing the area, and the population is ageing. However, the decision on where these projects are focused is a matter for the LEP.

My Lords, would the Minister like to monitor LEPs countrywide and share my concern at the lack of women members of those organisations? Is she aware that only 15% of LEPs countrywide consist of women; that in Birmingham, for example, out of 18 members only three are women; and that out of 13 members of the Black Country LEP there are no women at all? Before she gets embroiled in too many specific projects, can she ask the organisation responsible for LEPs overall why there is such a deplorable lack of female representation?

I thank the noble Lord for raising the point, not least because I was discussing it only this morning. My right honourable friend in the other place, Greg Clark, is planning to write to LEPs about diversity. On diversity, gender is important, but so is having small business as well as large business.

My Lords, in my role as chancellor of the University of Birmingham, I have heard that the Greater Birmingham and Solihull LEP has been a great success. A bold decision was taken to place the local enterprise zone right at the heart of the city. Is the Minister aware of this, and does she believe that it creates high-skilled jobs and has been replicated around the country? On the other hand, in the spirit of the Government’s own partnership, Vince Cable, the Secretary of State for Business, said he was sceptical about whether local enterprise partnerships had been successful at all. What does the Minister have to say about that?

My Lords, I am delighted that the noble Lord mentioned the Greater Birmingham and Solihull LEP, because the total that it is receiving under the growth deal is £379 million. We think that local enterprise partnerships have huge potential. What they did in the past I am not sure, but certainly for the future lots of funding is going into skills, enterprise, transport and housing. They are bringing in business funding as well, and there is local matching—following the report by my noble friend Lord Heseltine, which the Government welcomed.

My Lords, does the Minister agree that the involvement of the third sector in local enterprise partnerships is very enriching? As that involvement is very varied across the nation, would she be prepared to monitor the involvement of, and the partnership with, the third sector, as part of an assessment of the progress of LEPs?

As I have said, the composition of a local enterprise partnership is very much a matter for the LEP, provided that it is business led and brings in local democracy with the local authorities. Otherwise, we draw on people who can help with growth and skills, and certainly there are those in the third sector who bring great strength to these areas.

My Lords, does the Minister share our concern about the decline in the number of apprenticeships for 16 to 18-year olds, when there are still areas of very high youth unemployment, and apprenticeship demand vastly exceeds supply? What contribution are LEPs making to encourage employers to offer apprenticeships? Can the Minister give examples of the most successful LEPs working with local authorities, small businesses and so on?

My Lords, as always, the noble Lord asks a very good and detailed question, and I will follow up in writing—but £125 million of the £1 billion growth deal recently announced is addressed to skills capital, and a further £26 million to particular apprenticeships. By bringing business and local authorities together, and by looking at growth and what is needed—skills represent a particularly important constraint—the LEPs can really help to achieve our ambition of having more apprenticeships, and raising the numbers from the 2.1 million that we have had in this Parliament to 3 million in the future.

My Lords, may I suggest that people write to Birmingham City Council and ask for details about how its LEPs are organised? As part of the team from European Union Select Committee Sub-Committee B, as part of our unemployment study, we visited Birmingham City Council and we also went out to some of the organisations funded by it and through the LEPs. That was quite revelatory. Of all the witnesses to that inquiry, those people were by far the best, and they had new ideas about how to get ex-cons and young people who had never had a job, and would not get out of bed to get one, into particular areas. Please let us not condemn a body such as Birmingham City Council, in view of the reality on the ground and the fact that the witnesses’ evidence was so good.

I thank my noble friend for drawing attention to all this and look forward to hearing fuller details. I do not think that any of us is condemning LEPs. There are always good and bad things about such organisations. My own view is that they are making a great drive forward in helping local people choose the projects we should support with government funding and matching funding from business and others.

My Lords, in the debate on the constitution will the Minister keep in mind the distinction between decentralisation and devolution? Decentralisation is superior to devolution in terms of local enterprise companies. I give the Minister an example. The SNP Government in Scotland abolished the local enterprise zone in my area, but not before I established a public-private partnership in 1998. Sixteen years later, 2,000 jobs have been created with gross value added to the local community of more than £500 million. The public investment in that is one-1,000th, at £500,000. Will the Minister bear in mind that we have no hope of rebalancing the economy if we do not keep in mind the merits of decentralisation and local involvement?

My Lords, I very much agree about the power of localism and partnership, which that example demonstrates.