Moves to form Local Enterprise Partnerships in Birmingham and the West Midlands descended into confusion and embarrassment after a leading business organisation lodged a surprise bid to establish a region-wide body to support six locally-based LEPs.
Business Voice WM, whose high-profile members include the CBI and the Institute of Directors, is asking for Government permission to set up what it is calling an “over-arching mechanism” to support individual LEPs proposed in Birmingham and Solihull, the Black Country, Coventry and Warwickshire, Staffordshire, Shropshire and Herefordshire and Worcestershire.
The new body would deliver strategic regeneration support in the West Midlands, such as the Manufacturing Advisory Service, according to a submission sent by Business Voice to Business Secretary Vince Cable and Local Government Secretary Eric Pickles.
The aim is to support the locally-based LEPs through economies of scale, enabling councils to save money.
But the announcement, issued on the deadline day for LEP submissions to Whitehall, stunned councils and chambers of commerce who say they weren’t consulted and believe the application will fail because Ministers have made it clear they are unlikely to approve regional-based LEPs.
Leading figures at both the Birmingham and Coventry chambers did not know that a submission to establish a regional organisation would be made and reacted strongly, accusing Business Voice of misrepresenting the view of councils.
A spokeswoman for West Midlands Councils said it was not the case that the region’s 33 local authorities were supporting a regional body, as Business Voice had claimed.
Business Voice later agreed to remove from its website a section of a press release claiming its proposal had the full support of the councils.
James Watkins, Business Voice chief executive, admitted the chambers and councils “did have some concerns”, but insisted any misunderstandings had been ironed out and the business community was speaking with one voice over the issue.
Mr Watkins insisted: “There is no split in the Midland business community. We are all in this together to get jobs for our area.”
However, 24-hours of claim and counter-claim laid bare a serious split among businesses and councils over the approach to LEPs.
A Birmingham Chamber of Commerce statement rejected the idea of a “formal regional structure at this time”.
Calling for “bottom-up partnerships” that would be able to deliver growth and identify local needs, the statement added the chamber’s LEP bid recognised that the Government is committed to greater localism and reducing costs so that a regional LEP tier was “unlikely to be welcomed in Whitehall”.
The statement was reinforced by Simon Topman, chairman of the West Midlands Chambers of Commerce, who said: “There seems to be some confusion as to exactly what the chambers, the local authorities and the universities are able to endorse.”
The Coventry and Warwickshire LEP steering group took a similar line: “With the current emphasis on localism Coventry and Warwickshire does not think this is the way forward.”
Mr Watkins countered by pointing out that Business Voice was proposing a “mechanism” rather than a formal regional LEP.
Evidence of Advantage West Midlands’ implicit support for the Business Voice plan emerged when AWM chairman Sir Roy McNulty gave evidence to the Commons Business, Innovation and Skills Committee. Sir Roy said it would be difficult for six LEPs to deal with region-wide issues such as the Rover crisis or encouraging investment in aerospace.
He added: “Those major industries will not wish to deal six times with different bodies to address the macro issues that concern them and that point has been made very forcibly to me by the automotive sector and the aerospace sector.
“All of that points to the need for some form of co-ordinating body that address issues that spread wider than the boundaries of the LEP themselves.”
Asked by MPs about the views of the West Midlands business community Sir Roy said: “They are crystal clear that they want some form of effective co-ordinating body, to address issues such as you have described and a number of other facets of supporting the LEP structure. There are a number of functions which would be most efficiently provided on a shared services basis.
“It would make no sense for say six LEPS in the West Midlands each to have their own data collection activity, collecting the same data over and over again and probably ending up with different results.”
Business Voice’s intervention represents the latest turn of events in a lively debate about the make-up of LEPs in the West Midlands.
Birmingham’s efforts to form a super-LEP based on the conurbation were rebuffed by the Black Country councils, who decided to go it alone.
That left Birmingham joining forces with Solihull, Tamworth, Lichfield and East Staffordshire Councils.
Coventry and Warwickshire, meanwhile, are promoting their own plan to form a LEP, as are councils in Shropshire and Herefordshire.
A 29-page submission by Business Voice insists that co-ordinated action across the region is needed to tackle the economic downturn.
Business Voice chairman Barrie Williams said: “Our proposals would support the local actions of Local Enterprise Partnerships by having an overarching mechanism that supports LEPs through services via economies of scale – so councils can save money.
“This mechanism also means that when it comes to supply chains in sectors such as automotive, aerospace and food and drink – which cross the whole of the Midlands and not just a handful of council areas – we can supply strategic business support services that are sensitive to the needs of the Midlands and move away from the London-knows-best approach of the past.
“We hope Ministers will endorse our plans as they are in line with the Prime Minister’s concept of the Big Society – empowering businesses and communities to deliver for themselves”.
Institute of Directors regional chairman John Rider launched a spirited defence of the Business Voice proposal.
He said there was no confidence that Local Enterprise Partnerships would work properly without a co-ordinating body.
It was vital that a “well thought- through approach” emerged, capable of making a long-term difference, he said.