Prisk takes a LEP of faith over enterprise partnership funding

The business minister has given Local Enterprise Partnerships £5m to recruit staff - but warned that they can't rely on Government money forever.

by Emma Haslett
Last Updated: 15 Jul 2011
It appears that the Department of Business has bowed to pressure on the issue of Local Enterprise Partnerships, the much-maligned tie-ups between local councils and businesses that are due to replace Regional Development Agencies next year. The partnerships were originally supposed to be run entirely by volunteers, but today small business minister Mark Prisk offered them £5m to hire staff. His only condition? That they need to be self-sufficient in the long run…

The original idea with LEPs was that they would be independent bodies, funded by the local businesses that sat on their boards, with a bit of additional money here and there from the local council if required. They could then get together and help local businesses bid for the £1.4bn Regional Growth Fund, a pot of cash set aside by the Government to help create new jobs.

But it looks as though getting businesses to stump up the cash hasn’t been as easy as originally hoped. For instance, the Telegraph reports the plight of the LEP in Sheffield (where Prisk made his announcement today). James Newman, its chairman, said that although businesses had given their backing, they weren’t stumping up any financial support. ‘It was like setting up an RDA from scratch without any resource,’ he lamented. Poor chap.

It’s not the first time the Government has had to make financial concessions to the partnerships. Last month, local government secretary Eric Pickles promised an extra £300,000 for a special network to ‘co-ordinate the activities’ of LEPS (whatever that means). Pickles caused much consternation among business support organisations when he chose the British Chambers of Commerce to chair the network, without consulting any of its rivals.

Still, the idea seems to be that this £5m is absolutely the last time the Government gives extra cash to the partnerships. During Prisk’s speech today, he said the money was ‘a one off’, adding that they wouldn’t be getting any more. ‘If you start that process you go back to the old culture and that’s not affordable’. Hmm. Let’s wait and see.

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