Aiming to Punch Above Its Weight (Part 2)
    Category: Issues & Ideas By : Scott Younger Read : 1146 Date : Thursday, September 05, 2013 - 07:07:06

    Courtesy of Worcestershire LEP

    In the second part of this profile of the U.K.’s Local Enterprise Partnerships (LEPs), Forbes Indonesia interviewed the chairman of the Worcestershire LEP Peter Pawsey about the impact of the LEP in developing the Worcestershire region, and the lessons that the LEP structure might have for Indonesia.

    How do the public and private sectors in the LEP function together?

    The LEPs are business led partnerships between the private business community and local government and are chaired by a business person and usually with a majority of participants from the business sector. The size of their main boards vary from as few as nine members, as in the case of Worcestershire, to over 40, depending on the size of the local area, the number of local authorities involved and the respective drivers. In all cases, LEPs need to call upon the local government in terms of support staff and services. Private businesses contribute in various ways—time invested, provision of free facilities, office space and support services.

    How would you differentiate between the roles and outputs of the LEPs compared with their predecessors, the Regional Development Agencies (RDAs)?

    The RDAs were large regional organizations with lots of staff and considerable budgets. The LEPs are voluntary run organizations, who initially did not have any funding but now have limited amounts from the central government and, in most cases, also from local governments. Such funds support a small salaried “secretariat” in support of the LEP Board. In contrast, RDAs had a large decentralized annual fund to spend on various projects. More recently a number of central government funds are emerging and the LEPs are encouraged to put forward bids to receive these.

    How long are the terms of appointment of LEP board members and how are they chosen?

    In our case, the term of appointment to the Worcestershire LEP Board is an initial three years with a possible two-year extension. All posts are voluntary. The four business sector board members are nominated by the Business Board, which comprises 18 business men and women, plus representatives from the Chamber of Commerce and other organizations. The LEP chair is an advertised appointment. Three nominated local government representatives are also on the board plus a key figure from further and higher education. The local government representatives can change whenever the respective authorities wish or when local politics demand. Worcestershire is one of the few county-based LEPs, most cover more than one county. In our support “secretariat” team we have a chief executive and five other support staff.

    What annual budget does the LEP handle, how is it sourced and the funding distributed?

    The LEP direct budget is currently around £750,000 per annum (Rp 13 billion), which covers the secretariat costs and such things as running conferences, the production of literature and other items. In terms of the budget for projects, this varies. The government allocates funding to the LEPs for various programs. Some are grant funds, others loan funds. For some funding, the amount allocated is in proportion to the population served by an LEP. There are other funds for which we can bid and the amount of these is changing all the time. Lord Heseltine, a former deputy prime minister, recently produced a report called “No Stone Unturned” in which he recommended, among other matters, a different approach to LEP funding, based on a “single pot” approach. He advocated that all available funding, including that available through the European investment process, should be put into a single pot and LEPs encouraged to make bids for it. He estimated that this amount could be in the order of £50 billion (Rp 865 trillion), but so far the U.K. government has only allocated about £7 billion through its recent spending review.