BUSINESS Secretary Vince Cable yesterday questioned plans to hand further funding to Local Enterprise Partnerships.
Dr Cable said bodies such as the North East Local Enterprise Partnership were unaccountable to the public and lacked the resources to manage large sums of taxpayers’ money.
Instead, he promised to support local councils in their efforts to regenerate the economy – and praised North East councils Newcastle, Gateshead and Sunderland for putting aside decades of rivalry to work together.
Speaking to The Journal at Westminster, Dr Cable pointed out that Local Enterprise Partnerships (LEPs) were led by business figures rather than elected politicians, adding: “You can’t hand over large chunks of public money with limited controls into that kind of structure.”
His comments may be welcomed by local authorities but raise questions about the future role of Local Enterprise Partnerships, which were created by the Coalition Government to boost regional economies following the decision to abolish regional development agencies.
The North Eastern Local Enterprise Board covers the local authority areas of County Durham, Gateshead, Newcastle, North Tyneside, Northumberland, South Tyneside and Sunderland.
LEPs were expected to take the lead in boosting economic growth after Lord Heseltine, the former Deputy Prime Minister, set out plans to create a pot of money of up to £70bn for LEPs to bid for. The cash would come from the abolition of a series of schemes managed by central government.
Chancellor George Osborne appeared to accept the proposals in the March Budget, when he announced plans for a “single pot” of funding for LEPs. Under the Treasury’s proposals, they would bid for a share of the cash.
But Dr Cable revealed that the Government would focus on working directly with councils, and highlighted a series of City Deals, negotiated between ministers and local authorities, which have already been signed.
Tyneside was awarded £92m in investment as part of its City Deal agreed last year, with four key development sites where councils will be able to use cash from business rates to improve infrastructure, attract more employers and create an estimated 13,000 jobs.
Dr Cable said: “It was a bit of a struggle in the North East actually to get Newcastle, Gateshead and Sunderland in the same room.
“They have traditionally always refused to discuss anything with each other. But we did get them to co-operate and have a City Deal for Newcastle which isn’t just Newcastle City Council but is Newcastle plus the various Tyneside councils.”
City Deals, negotiated with elected councils, were the way forward, he said.
“The mechanism we prefer is the City Deal, where we are dealing with accountable city councils. They have a basic structure and legitimacy.”
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