LEPs

http://www.lgcplus.com/opinion/this-is-where-the-real-work-begins/5056471.article#commentsubmitted

I articulated my own hopes for a Muncipal Corporatist vision for LEPs some time ago: http://www.slideshare.net/CllrMirfin/what-does-the-future-hold-for-economic-development-and-regeneration-v2

That vision was based on a Back to the Future Vision of Powerful Civic Associations dedicated to the task of Civic Improvement with the Public Sector & Big Business Working in True Partnership to ‘park, pave, assize, market, gas & water and improve’. I realised that Trade-offs would need to be made between the imperatives of business growth and town and neighbourhood renewal; placing the radical and competing objectives of accelerated creative destruction and civic cohesion with visionary local political leaders preaching a gospel of social improvement in conflict with each other.

Sadly, four things have happened to retard the future potentiality of Municipal Corporatism. The first is the same old faces syndrome. LEPs have become high-jacked certainly on the Public Sector side by nominees from Public Sector bodies who are keen to protect the interests of the bodies they represent. Indeed I have heard it expressed openly that all they need to do is to retard the pace of change sufficiently whilst they wait for Labour to return to power to recreate those Regional structures which failed to deliver significant growth in regional economies during Labour’s 13 years in Power. The problem is that many of these individuals who were unable to deliver significant economic growth in the regions when the funding streams were much bigger and the recessionary obstacles far fewer face much bigger challenges to their capabilities in a far more challenging environment when both Central Government & Bank Funding is much scarcer. That is why the Coalition is looking to re-invigorate LEPS with fresh blood – recruiting individual of a more entrepreneurial spirit who are more determined to get things done. It is an acknowledgement that the original recruitment process was deeply flawed and has pitted some Public Sector appointees against appointees from the Private Sector in a Zero-Sum game. Politics has intruded where it should not have. The lack of their own administrative machinery however has not helped as LEPs have had to fall back on the very Public Sector bodies they were supposedly trying to distance themselves from.

The second is that LEPs have become wholly reliant on Local Government to an unhealthy degree. Indeed some are little more than adjuncts of County and/or Large Unitary Authorities: effectively little more than filters or processing units for Regional Growth Funding. The Lancashire LEP is effectively little more than a Post-Room address. Activity is effectively taking place elseqhere with much of the Key Economic Development Activity being carried out by Lancashire County Council’s own Economic Development Vehicle LCDL Lancashire County Developments Limited and the Research Arm of Lancashire County Council’s Regeneration efforts – Lancashire Economic Partnership which the County Council continues to fund despite it not being integrated into the LEP are many have been misled into believing. Were Lancashire County Council to decide to sever support for the LEP and leave it to its own devices it would quickly collapse. In that sense I’d rather the powers that be acknowledge the excellent work being done by the Conservative led County Council and let them get on with the job in hand co-opting Business Led Support as and when it feels it is required.

The consequence is that LEPs as I predicted are suffering from what I have dubbed become Centrifugal Localism. They are Public Sector Dominated. Business is represented in an advisory capacity only through Invited/Nominated Private Sector Boards – hardly surprising that Business is expressing frustration both in terms of a lack of engagement but more worryingly a failure to define a sufficiently pro-business agenda after nearly two years. It comes as no shock that Businesses are voting with their feet in terms of a lack of involvement as well in some regions a turnover of personnel due to the political blockages that are being experienced as a consequence of institutional turf wars at a local level.

What is happening is the Re-launch, Re-packaging, Re-branding, Re-positioning of Existing Business Support Products and Services under another name/guise because it is too difficult to dismantle existing policy programmes. In some Sub-Regions the Business Link Network and former Development Agencies are recreating themselves like viral pathogens. We need to stamp down hard on this before any additional economic value is sucked out of the Local Economy by overly top heavy Business Support and Growth Hub structures diverting growth funding away from the front line. We do not need to build such a network of advisors and mentors who are more likely to hinder the deliver of funding and serve their own purpose by providing employment for the dispossessed armies of former Public Sector Employees. I despair that organisations that were dismantled and wound up because they were so ineffective are being recreated before my very eyes without any clear long-term rationale other than the management and organisation of funding streams which could be done with much more agile and lean organisational structures. Let me remind the powers that be that this is after all Public Money! We need to ensure that its disbursement is accounted for and monitored effectively – are such employee heavy structures really required to make such schemes work?

That is why I favour a Business led Corporatist Model a la Peel’s Atlantic Gateway proposal in the North West across Merseyside and Greater Manchester. I advocate the creation of “Keiretsu” like Enterprise Partnerships with very high levels of close knit co-operation cooperation between manufacturers, suppliers, distributors, banks and local government with active acquiescence of trade unions and employer engagement and participation. Business Support Strategies will reflect the needs of the “Keiretsu”. Funded Apprenticeships and Specialist Training will be High Priority. Training Regimes are likely to reflect the needs of Growth Businesses. Education and Training will become much more Business Focussed. There will be a much greater focus on identifying and backing winners at the expense of poor performing companies. I appreciate that this is likely to result in Creative Destruction – Pursuing a High Growth Strategy is likely to hasten the demise of existing declining industrial sectors. Continuous Change Management of a High Growth Enterprise Strategy on the scale envisaged has not been attempted since the Victorian era. There are however lessons we can learn from recent experience

The third is equally as problematic. Successive Governments in the UK have reduced the role and political room for manoeuvre of Local Authorities – the starting point being the flawed rationalisation of Local Government structures under Peter Walker following the Radcliffe-Maud Commission findings in 1972. The paradox of Localism is that it although the intention of ensuring that decisions are taken locally as close to the electorate as possible the demand of managing the National Economy during a recession which is as much to do with the structure of the economy as it does its performance demands a far higher level of Central Government control than ever before. It is as much to do with setting priorities as it is about controlling spending. Central Government is entirely right to identify huge variations in the performance of Local Authorities although I would have to acknowledge that Ministers have been shy of understanding the individual circumstances that confront diferent Local Authorities even Conservative ones like the Ribble Valley. It would be nice to think that they could spend more time out of the WestMinster Village and more in individual constituancies. Let me say upfront that I am against rate Capping – the Electorate are sufficiently well informed to punish any Local Authority Representatives hat are profligate in their management of Local Authority Finances. However when we are confronted by the pernicious spectacle of Labour Authorities like Blackburn with Darwen Borough Council that are once again playing politics with both the lives of its Electors as well as the that of its Employees despite having tens of millions of pounds in reserve one has to wonder whether some Local Politicians are sufficiently responsible to be allowed to manage budgets of such a size.

The fourth is perhaps the most controversial element of my thesis. That is that Businesses that benefit from their special position within the local economy owe an obligation to that economy. CSR is not just a P.R. exercise. Business leaders occupy a unique position within their local economy. If they wish to benefit further then that requires a degree of involvement if for no other reason than to benefit their business, their workforce and ultimately themselves. This is the true meaning of Municipal Corporatism with patrons investing Business Capital not for philanthropic reasons but because ultimately it is good for business. The problem that we have in the UK is that since the Victorian era the Business Economy has become detached from the Political Economy. Government and Business have become regarded as separate spheres. The Banking crisis demonstrates the dangers of such a situation. They are not. Business should not only be represented more effectively within Government but should seek to represent itself more effectively. Yes, this is time consuming. It is only through the time consuming involvement of Business people, however, that Politicians will ever learn the folly of their ways and to run the Economy in a way that better understands the needs of Business. Time for Business Leaders to Step Up to the Plate and start challenging the assertions of LEPs. Time to Bring Business back in and to challenge some of the assertions of Public Sector Representatives more effectively. It will only be to the Public Good!