Ministers could refuse to let Birmingham and Solihull take advantage of new tax-raising powers because of an ongoing row over the lack of women on a local economic development agency.

The Department for Business is refusing to recognise the board of Greater Birmingham and Solihull Local Enterprise Partnership (LEP) because all 17 members are men.

And while the LEP has enjoyed a series of successes, including winning “enterprise zone” status for Birmingham city centre, Ministers insist failure to appoint at least one woman could cost the region dear.

Business Minister Mark Prisk told the Birmingham Post that a lack of official recognition for the board could damage the region’s chances of successfully applying for schemes such as business rate retention, in which councils keep the business rates they collect rather than sending the cash to the Treasury, or Tax Increment Financing, in which councils borrow to pay for major infrastructure projects.

He pointed out that LEPs required Government approval and some proposals had been rejected because ministers did not believed the proposed boundaries made sense.

But receiving approval for the board was equally important, he said.

He said: “A local enterprise partnership is something that we’ve had to clear, both in geography and the second phase of that is to put forward their board.

“We do expect to see if you are representative then they should have a representative from half the workforce.”

Mr Prisk added: “It does matter in the sense that as we start to develop future policies in terms of things like business rate retention, or future discussions on tax increment financing, clearly it is a matter that needs to be resolved.”

A board could not be approved if it had no women, he said.

“The Government’s policy is clear that we need to make sure a board like that does have representation from half the workforce.”

The LEP’s chairman is John Lewis managing director Andy Street and members include high-profile businessmen Nick Bunker, UK president of Kraft Foods and Cadbury and Stephen Hollis, Midland chairman of KPMG.

Other members include the leaders of local authorities in Birmingham, Bromsgrove, Cannock Chase, East Staffordshire, Lichfield, Solihull and Tamworth, all of whom are men.

A spokeswoman for the LEP said that a woman could be appointed to replace board member David Kaye, former managing director of the National Express group’s UK bus division, who announced he was leaving the company in September and is due also to stand down from the LEP.

The lack of progress obtaining official recognition for the board was highlighted by think tank The Centre for Cities, which has published a report on the progress made by the LEPs in the 12 months since he first partnerships were approved.

It concluded that some had made more progress than others, adding: “The evidence that LEPs have made varied progress in setting up boards and producing strategies suggests that the impact of the LEPs will be equally inconsistent.”

The think tank, which has frequently called on local authorities across the West Midlands to work more closely together and to accept Birmingham as a “regional capital”, also said: “The Birmingham city region area . . . is split between six separate LEPs which suggests that local politics have prevented the city from establishing a LEP at the optimum scale to influence its growth prospects.”

Andrew Carter, director of policy and Research at Centre for Cities said: “One of our biggest concerns is the spatial geography of some LEPs does not match the economic and political geography, creating real barriers to effective influence over local economies. 

This means that many of the LEPs seem to be falling at the first hurdle, before boards are recognised or strategies considered.

“Some are too small, some are too big and several have boundaries which do not recognise important economic patterns such as travel to work areas.”