What hopes for the LEPs?

If like me you’re glad to see the back of Regional Development Agencies (RDAs), and the plethora of quangos on which they splurged our taxes, then you should have high hopes for the Local Enterprise Partnerships (LEPs) that are to replace them. However, there’s a good chance that any such hopes may be quickly dashed.

It was clearly time for the seemingly endless list of overlapping Enterprise Hubs, Economic Partnerships, Innovation & Growth Teams, Sustainable Business Partnerships and Training & Enterprise Councils to be sorted out. In addition to these, our local RDA (SEEDA) has also funded many other bodies that are supposed to stimulate particular industries in the region. Perhaps they do, but where’s the objective evidence that they actually achieve anything more than creating a few jobs for the people that work in them? I don’t believe it’s enough to point to no end of networking opportunities and talking shops. Of course, some major companies pay to participate but all that shows is that they don’t miss a few thousand pounds if they think it may keep their names in lights… but do they really get anything else?

To me, many of these organisations look like job creation schemes. Expensive alternatives to the dole queue for redundant employees with white collars. I’m all for public funds being used to stimulate the economy in areas where it’s come under pressure, but let’s make the stimulus meaningful. Within the last twenty years I’ve kicked off two technology companies that still today employ dozens of people in real jobs, and make sales abroad to the benefit of UK plc. When those companies were starting up, we had low rent accommodation, second hand furniture, shared telephones, virtual receptionists (in Wrexham of all places), no way to pay for adverts or recruitment agencies’ fees and NO PUBLIC GRANTS. Of course there was no money for grants; it was all going to Enterprise Hubs, Economic Partnerships (see above for a reprise of the full list). Do the quangos start up in the same way? Not likely – their role is so much more important that they must have plush offices and a full complement of support staff and PR material from day one. My businesses justified their existence with their P&Ls and Balance Sheets. Where is the equivalent hard evidence of the worth of the quangos?

To be fair hard evidence is difficult to get, but that doesn’t mean it shouldn’t be pursued. Whenever I go to UK Trade & Investment networking events I usually get a questionnaire at the end within which is the question: how much additional business do you expect to win as a result of today’s schmoozefest? How is anyone supposed to answer that question? I’ll bet that many people do: they could put £1M or £10M, who’s counting? I’ll further bet that the organisers add up the totals they say to their Whitehall masters: Lo! Our efforts today have resulted in another couple of hundred million’s worth of business. My final bet (I’m tripling up here) is that those unquestioned numbers eventually find their way into a total that is quoted at the Despatch Box in the Commons. It would be too hard of course to follow up a year after the event to see what business actually resulted, as opposed to the wishful thinking total.

I’ve deliberately not mentioned Business Link so far. Business Link does look to me to have a valid raison d’etre as a solid repository of business knowledge and intelligence that is undeniably of use to all kinds of small businesses that can’t afford to retain the services of high end lawyers and accountants. There is clearly a need for a certain amount of business support to be affordably available. That need does not excuse the overlapping, jumbled over-supply that has built up in recent years. The current coalition government is rightly sweeping away the RDAs, and a lot of the disjointed mess will be swept away with them. This should be a time when a new brush sweeps clean, and we must live in hope that the new Local Enterprise Partnerships (LEPs) that are springing up will do things differently.

There is however, a great danger that things will go awry. Will there be any new blood in the teams setting up the LEPs? Maybe not, given the number of people there will be from the old order that will throw their hats in the ring. The Business Secretary is being urged, even by some of his own lieutenants, to listen to the likes of the CBI who observe that there is a lack of credible business representation, too much local political interference and a lack of focus on economic growth.

We are already enduring the fallout from a period of economic growth fuelled by unsustainable consumer credit, and measured in terms of high street spending on imported electronic fripperies. If the new LEPs are staffed by people with the right skills and experience to shift the focus to fostering productive businesses that will boost export revenues then we’ll be better off for it. If it’s the same old medicine as before, then one TLA will have been replaced with another: nothing will change and a great opportunity will have been missed.

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