Government will end LEP funding

Government funding of Lancashire’s Local Enterprise Partnership (LEP) will come to an end next April, it was announced today. 

The government says instead it will support upper tier local councils and, where there is a devolution deal, combined authorities to take on the functions currently delivered by England’s 36 LEPs. 

Those functions include business representation, strategic economic planning and the delivery of government programmes. 

Debbie Francis, who chairs the LEP, described the government’s decision to cease its funding as “disappointing”. 

She added: “The need for business collaboration with local authorities remains crucial to enable the delivery of economic growth and prosperity in Lancashire.”  

And she went on: “We are working closely with our public and private sector partners to ensure there remains a strong business voice, which builds on the LEP’s significant expertise, experience, and legacy, that will help inform Lancashire’s future economic strategy.” 

A letter from levelling up minister Dehanna Davison to LEP chairs, combined authority mayors, local authority leaders and the mayor of London was made public today. It spells out the government’s plans. 

It revealed that the government will provide “some revenue funding” to local and combined authorities in 2024-25 to support them in delivering the functions currently delivered by LEPs.  

However, funding beyond 2024-25 is subject to “future spending review decisions”. 

Chancellor Jeremy Hunt announced in his March Budget that the government was looking at transferring the responsibilities of LEPs to local authorities. 

That was followed by “an information gathering exercise” by the Department for Levelling Up, Housing and Communities (DLUHC), which led to today’s announcement. 

In her letter, the minister said: “From April 2024, the government’s sponsorship and funding of LEPs will cease. The government will now support local and combined authorities to take on the functions currently delivered by LEPs.  

“Where not already delivered by a combined authority, or in areas where a devolution deal is not yet agreed, the government expects these functions to be exercised by upper tier local authorities, working in collaboration with other upper tier local authorities over functional economic areas as appropriate.  

“The information gathering exercise identified overlap between some of the functions being discharged by LEPs, local authorities and combined authorities, as well as confirming that there is already a high level of integration of LEP functions in Mayoral Combined Authority areas.  

“The exercise also highlighted the different perceived levels of benefit and engagement between LEPs and local authorities.  

“The government’s view is that there is likely to be scope for greater join-up, efficiencies, and clarity for the private sector by these functions being discharged within Mayoral Combined Authorities, devolution deal areas and upper tier local authorities, working together as appropriate.”  

There are three upper tier local authorities in Lancashire – the county council, Blackpool and Blackburn with Darwen. They are currently involved in talks with the government aimed at sealing a devolution deal. 

The minister added: “The government remains committed to our goal that by 2030, every area in England that wants a devolution deal will have one.  

“By empowering local democratically elected leaders to deliver these key local growth functions from April 2024, we are accelerating the integration process set out in the Levelling Up White Paper.”  

Tim Oliver, who chairs the County Council’s Network (CCN), said: “Today’s decision by the government is a decisive one and very welcome, drawing a line under recent uncertainty and allows us to get on with integrating Local Enterprise Partnership functions into upper-tier councils and combined authorities.” 

He added: “While the government have clearly set out that LEP functions should be transferred to upper-tier councils, it still allows LEPs to continue to operate independently without government support.  

“While recognising these are private enterprises which the government cannot abolish, this could create duplication and confusion locally, and therefore they should only continue to function following consultation with the relevant upper-tier council.” 

Lancashire’s LEP, a strategic collaboration between business, universities and local councils, was formed in 2011, with a remit to direct economic growth and drive job creation. Since then it has played a central role in coordinating the county’s economic priorities. 

Debbie Francis, LEP chair, said: “While the government’s decision to cease the funding of Local Enterprise Partnerships from April 2024 is disappointing, the need for business collaboration with local authorities remains crucial to enable the delivery of economic growth and prosperity in Lancashire.  

“The business community’s sector-specific and unique industry insights will help to ensure investment and policy interventions will have maximum impact which will benefit both residents and businesses as Lancashire realises its economic growth ambitions. 

“As such, we are working closely with our public and private sector partners to ensure there remains a strong business voice, which builds on the LEP’s significant expertise, experience, and legacy, that will help inform Lancashire’s future economic strategy.”