Councils urge government to abolish Local Enterprise Partnerships

As a result, the CCN has called for the abolition of LEPs and for their powers to be transferred to local authorities.

The government announced in February that it was “minded” for the functions of LEPs - which replaced regional development agencies in 2012 - to be transferred to local authorities, however council leaders in county areas are concerned indecision will leave them with fewer tools to address regional inequality.

Analysis in the report by Ernst & Young finds that economies in England’s county and rural areas are forecast to grow much more slowly by the middle of this decade than in city and urban areas - which by and large already have LEP functions due to their devolution deals.

Calculations of economic activity show that the 11 LEP areas in urban and city areas - including Leeds, Manchester and London - recovered the economic output lost during the pandemic in 2022.

Meanwhile, forecasts for the 27 LEPs in county and rural areas show recovery to pre-pandemic levels of economic output will only be achieved in 2024.

Gross Added Value (GVA) in urban areas is expected to grow by £60bn between 2019 and 2015, an increase of 6.7%, while in rural areas the growth of 3% in this time represents only £29bn of growth.

The definition of rural areas in the report covers 56% of England’s population, and had a larger economy than urban areas before the accelerated recovery of urban areas after the pandemic saw them take over in terms of economic output in 2022.

According to the CCN, there has been too much duplication in the work provided by both local authorities and LEPs, and delivering their functions to councils will provide democratic accountability.

The report says, they argue, that LEPs have underperformed when it comes to government predictions of generating returns on investment.

Cllr Tim Oliver is leader of Surrey Council as well as Chairman of the County Councils Network, he said: “The government’s ‘minded to’ indication that it was to abolish LEPs and transfer them to local authorities was long overdue. The process had already slowly begun in parts of England with LEPs being subsumed into city areas with mayors and devolution deals, leading to a piecemeal approach where some councils have greater powers than others.

“For too long, councils in county areas have been hamstrung in their ability to drive economic growth lacking the powers enjoyed by urban and city authorities with mayors. As today’s economic analysis shows, growth in those areas far outstrips county locations, with our rural areas only bouncing back to pre-pandemic output five years after the event.

“We need all the tools in our armoury to try and close the gap, and LEP functions would be another string to our economic growth bow.