Plans for four local enterprise partnerships in the West Midlands are starting to take shape – but even business ministers are questioning their likely effectiveness
Former Birmingham Chamber president Bridget Blow is to chair the development board of the LEP for Birmingham, Solihull, East Staffordshire, Lichfield and Tamworth after the group was given the go-ahead by the Government.
Bids from Coventry and Warwickshire, Stoke-on-Trent and Staffordshire and The Marches – Shropshire, Telford and Wrekin and Herefordshire – were also given the green light, although proposals for LEPs in the Black Country and the West Midlands as a whole have been excluded.
But with ink still drying on the contracts, experts have criticised LEPs for lacking the funding or power to bolster economies.
And in a leaked letter, even business minister Mark Prisk was downbeat.
Mr Prisk wrote: “There is a strong view amongst the business community that many LEPs lack the ambition to make significant economic impact, undermining our agenda for growth.
“Key messages I have been made aware of include: a lack of credible business representation; negotiations dominated by local politics; and a lack of a clear focus on economic growth.”
The letter concluded: “At worst, the danger is that the CBI and others become detached from this policy, heralding likely failure in large parts of England.”
The four LEPs in the region, which all have input from local authorities and businesses, were approved by Business Secretary Vince Cable last week.
The Black Country bid was turned down, although Peter Mathews, chairman of the Black Country Consortium, said the rejection did not mean the end of the process.
With the abolition of regional development agencies (RDAs) like Advantage West Midlands, the Government called for businesses and local authorities to form LEPs to create and drive economic strategy.
But professor David Bailey, of Coventry University Business School, described LEPs as “a shambles”.
In his Birmingham Post Blog, Prof Bailey said: “Local enterprise partnerships won’t actually get any funding for running anything.
“And the RDAs’ assets may well be claimed by central government to cover the costs of closing down the regional bodies.
“The budget-less LEPs will have to bid in to a centralised ‘Regional Growth Fund’ for money.
“That fund will dole out money centrally in a top down way, and will anyway have vastly reduced resources as compared with the old RDAs –maybe only a quarter of what the RDAs could spend outside of London.
“As several commentators have noted, the proposals won’t even be scrutinised by Lord Heseltine alone, but will be checked over by the Deputy PM Nick Clegg as well. So much for localism.
"Rather, the reality is centralisation and top down control. And flogging off AWM’s assets – including land – at a time of depressed commercial property prices will no doubt mean a killing for speculators but it’s us taxpayers who are likely to come off badly.”
Despite a tough week for LEPs, Ms Blow said she was looking forward to her new role in what has been called “the Greater Birmingham LEP”.
She said: “I look forward to working with business and local authority colleagues to design and deliver the conditions necessary to create a full-time functioning local enterprise partnership board.
“This will include designing a process to identify the business representatives and independent business chair.
“We have agreed that business representatives who serve on the development board will not be eligible for election to the full board. This therefore removes any risk of potential conflicts of interest cutting across the work of private sector development board members.”
Ms Blow expects to be in the voluntary post for up to four months.
In time, businesspeople will take up half of the places on the board.
Coun Mike Whitby, leader of Birmingham City Council, said: “I believe we are very fortunate to have the support of someone of Bridget’s calibre to chair our development board agenda.
“Her business experience combined with a strong project back-ground and knowledge of the public sector make her an ideal choice.”
A spokesman for the Department for Business, Innovation and Skills said: “Credible business engagement is particularly important if partnerships are to realise the economic potential of their area.”