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Is the future of LEPs any clearer?

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  • Publish date: 10 July 2013
  • Archived on: 12 February 2014

The Spending Review on 25 June included the amount that Local Enterprise Partnerships (LEPs) will receive for 2015/16 and outlined the commitment for the following five years. But it could all change after the 2015 election. For fuller details see the attached summary.

CL Comment

Government is due to issue SLGF guidance soon. Key questions to be answered include:

  • How SLGF can be managed across financial years?
  • How far differing sources of funding can be managed interchangeably?
  • How does the allocation process work in practice?

9.10 The SLGF will provide LEPs with the flexibility to tackle the barriers to growth in their areas and provide influence over the key levers of transport, skills and housing. An area’s allocation from the SLGF will be available to be spent on the priorities LEPs and their partners have determined in their strategic economic plans.

9.11 Transport is central to local economic development. The Government has already announced its intention to devolve funding for local major transport schemes in a way that aligns with LEPs, and will ensure a smooth transition to including this funding in the SLGF. In addition to over £800 million of local major transport funding transferred to the SLGF in 2015- 16, a further £300 million from other transport funding streams will be included, providing £1.1billion of funding to support investments in local transport projects. In addition, there will be a further commitment of over £5 billion of transport funding from 2016-17 to 2020-21, to enable long term planning of priority transport investments in local areas. Of the local authority majors funding being transferred into the SLGF in 2015-16, £314 million is already committed to specific transport projects. The tail will reduce over time. This long-term transport funding will be available for LEPs to bid for as part of their first SLGF allocation.

9.12 The Government will also put £500 million of skills funding under local control, to allow local employers to drive the provision that they need to maximise growth in their areas. This will include resource in the form of match funding necessary to support skills projects funded through European Social Funding and Further Education capital funding.

9.13 The Government will continue to operate the New Homes Bonus on a payment-by-results basis in order to incentivise house building. The Government will consult on the mechanism for requiring that a proportion of this funding is pooled by LAs as part of the SLGF. LEPs and the member local authorities (Las) will then agree how to spend this funding in line with their strategic economic plans as agreed through the Growth Deal process. Inclusion of a proportion of the New Homes Bonus in the SLGF in 2015-16 will ensure LEPs and LAs work together on economic development priorities, including housing, across the LEP area.

9.14 This is the starting point for the SLGF and it will continue to be at least £2 billion every year in the next Parliament. LEPs need to demonstrate the impact that they can achieve with greater funding and flexibility and over time, the Government will seek to expand the scope of funding included.

9.15 the government is also announcing alongside the spending Round

European Development Fund and European Social Fund: allocations 2014 to 2020

The Secretary of State has in the following written ministerial statement to Parliament made the following allocations from the ERDF and ESF 

I am today confirming how the €6.2 billion England allocation of the European Regional Development Fund (ERDF) and the European Social Fund (ESF) will be allocated.

The European Regional Development Fund, the European Social Fund and part of the European Agricultural Fund for Rural Development (EAFRD) will be allocated to Local Enterprise Partnerships (LEP) areas for a full seven year period through a new decentralised EU Growth Programme.

The government has given a commitment that the Growth Programme Funds will be allocated to Local Enterprise Partnership areas as an important new source of finance to stimulate local growth and jobs. This marks a significant shift from previous European programmes which were substantially centralised with limited local involvement in many key areas. Under this new model, decision-making powers will be transferred from Whitehall to local areas. LEPs and local partners will be in charge of European Funds that will provide significant investment in innovation, business, skills and employment in a common agenda for growth and jobs that will integrate effectively with wider LEP Strategic Plans.

In February, the Prime Minister negotiated a real-terms cut in the EU budget for the first time in history. As the independent Office for Budget Responsibility has said, the effect of this deal was to reduce its forecast for what taxpayers across all parts of the UK will pay by £3.5 billion over the next five years.

The government has set allocations that deliver the fairest split of funding across England, as far as EU rules allow. Allocations by LEP area for ERDF and ESF are set out in the annex. Allocations for the part of EAFRD being channelled through the Growth Programme will be published at a later date by the Department for Environment, Food and Rural Affairs.

Gibraltar’s current allocation will be frozen at €9million and will be taken from the England allocation for ‘more developed’ regions (Gibraltar is counted in this category).

The government has today also confirmed the detailed allocations for the Highlands and Islands region in Scotland as €172 million and the allocation for West Wales as €1,783 million and for East Wales as €361 million.

All allocations are subject to final agreement on the EU regulations and the EU 2014 to 2020 Budget in the European Parliament. The European Commission will also need to agree the UK Government’s specific proposals.

Outcome of spending review (Expenditure in 2015/16) (CL TABLE)

Funding Stream Heseltine £m Spending Review £m
Skills £4,358 £500
Local Infrastructure £3,705 £1,119
Employment Support £1,367
Housing £1,700 £400
Business Support Services £735
Innovation and commercialisation £403
Single Pot Total £12,268 £2,019

Of the total of £2,019m announced for 2015/16, £1,449m (72%) was capital.

Annex: LEP allocations for ERDF and ESF 2014 to 2020

LEP Allocation €m
Black Country 177.4
Buckinghamshire Thames Valley 13.9
Cheshire and Warrington 142.2
Coast to Capital 67.3
Cornwall and the Isles of Scilly 592.9
Coventry and Warwickshire 136.0
Cumbria 91.4
Derby, Derbyshire, Nottingham and Nottinghamshire 249.7
Dorset 47.3
Enterprise M3 45.7
Gloucestershire 38.3
Greater Birmingham and Solihull 255.8
Greater Cambridge & Greater Peterborough 75.5
Greater Lincolnshire 133.5
Greater Manchester 415.6
Heart of the South West 118.3
Hertfordshire 69.5
Humber 102.4
Lancashire 266.3
Leeds City Region 391.2
Leicester and Leicestershire 126.3
Liverpool City Region 221.9
London 748.6
New Anglia 94.5
North Eastern 539.6
Northamptonshire 55.0
Oxfordshire LEP 19.4
Sheffield City Region 203.4
Solent 43.1
South East 185.9
South East Midlands 88.3
Stoke-on-Trent and Staffordshire 161.6
Swindon and Wiltshire 43.6
Tees Valley 202.6
Thames Valley Berkshire 28.7
The Marches 113.7
West of England 68.6
Worcestershire 68.1
York and North Yorkshire 97.5