Accessing the EUSIF piggy bank...
The formal period in which LEPs and partners can respond to government’s ‘preliminary guidance’ on the allocation and use of EU structural and investment funds (EUSIF) 2014-20 closes at the end of the month. Further detailed guidance and notional allocations for the seven year period are likely to be announced around the time of the spending review at the end of June. Thereafter government expects LEPs to submit detailed draft investment strategies by the end of September, which, following negotiations, will be finalised and agreed by January 2014.
Many LEPs have already responded to the preliminary guidance with initial strategic investment dialogue, both internally and with government. A number of others either have or are in the process of seeking external assistance with EUSIF investment strategy planning. Beyond these standard responses, though, how can this work be best taken forward over the months between now and the draft submissions in September?
This magazine’s coverage of neighbourhood planning has been excellent. The direct reporting of the first tranches of successful referendums in Upper Eden , Fish Quay (which was in fact a council adoption), Exeter St James and Thame; has gone alongside government inception of the ‘Boles bung’ – whereby Parish Councils and neighbourhood forums receive 15% of Community Infrastructure Levy (CIL) arising from development in their areas, and 25% if they have an adopted neighbourhood plan. The first ‘neighbourhood watch’ feature provides fascinating analysis of the incidence and progress of neighbourhood planning across England.
With neighbourhood planning likely to stimulate significant CIL (and potentially other) receipts in specific localities in receipt of major developments, it is worth considering the progress on neighbourhood community budgeting. Ten neighbourhood community budget pilots were designated by government in December 2011, and were due to produce their operational plans by April 2013. If neighbourhood planning potentially gives local communities large sums to spend, neighbourhood budgets may give us some clues as to how they could spend them.
Similar to my blog on ‘Cities Outlook 2013’ earlier this year, I love the annual Regeneration and Renewal (R&R) ‘top 100 regeneration projects’. These exercises always raise as many questions as they provide answers, but those questions tell us important things about the state of UK regeneration. This year it particularly struck me that the absence of a similar listing of ‘top 100 economic growth projects’ also tells us important things about the current state of local economic growth. But, before we get on to that, what issues for further exploration do the R&R top 100 suggest for the development theorist and practitioner?
Is devolved funding on its way to local authority leaders' boards?
Government’s 2013 response to the Heseltine Review has given us two ‘big’ governance ‘ideas’ – first ‘conurbation mayors where local authority areas want this’ (so it’s presumably a non-starter at least this side of a general election). Second is ‘combined authorities…[which are] preferable [to a] joint leaders’ committee’. ‘Strong, stable and effective’ local governance will be one of four criteria for determination of the resources (both national and EU) government will make available to local areas, and the terms/degrees of delegations they will have.
I am not sure the coalition ‘gets’ governance. However, given we already have one operating combined authority – Greater Manchester (GMCA) – and definite proposals for three more, it is worth local leadership teams examining what combined authorities actually are; how they are established (and potentially when); and whether they can be demonstrated to be ‘preferable’ to other options.
There was the general self-congratulatory, uncritical mood we have come to expect in government’s response to the Heseltine review published on 18 March as an appetiser to the budget. In welcoming the report, Government announced they are ‘accepting in full or in part 81 of Lord Heseltine’s 89 recommendations’. As is so often the case, though, his lordship’s seemingly impressive strike rate begins to unravel on detailed examination.
The formal government response in Annex A actually only states ‘accept’ – presumably meaning ‘accepting in full’ – to sixty of the 89 recommendations (around two-thirds). And for the 15 directly pertaining to ‘local growth deals’, ‘accept’ only accompanies nine of them – just 60%. So a full 40% are caveated or rejected. And, taking a deeper look at the example of local leadership of innovation (which many regard as central to future local growth prospects in a global economy), even ‘accept’ means, de facto, enduring top down control of this vital agenda.
EU governments have finally agreed a budget for 2014-20. Government and the European Commission see the next structural fund programmes as focused on growth. Our government has made it clear they expect 39 LEPs to produce local strategic frameworks for these resources. These will sit alongside and be a key component of LEP growth strategies also bidding into an impending Heseltine-inspired single economic pot.
The four themes for the EU programme with the UK are likely to be SME competitiveness, low carbon transition, skills and employment (especially social inclusion, focusing on issues like NEETs) and ‘smart specialisation’. So what is ‘smart specialisation’, and how can LEPs and their partners make the most of EU opportunities in this thematic area?
Government’s approach to devolution and decentralisation to enable local growth sometimes seems like that old joke about buses – you wait forever and then three come along at once.
With the announcement of wave two city deals today, government now claims that wave one and two deals may cover 71% of England’s population and 68% of jobs within the next twelve months (actually well over 80% of population and jobs if one excludes London).
Similarly, within the next twelve months, all 39 LEPs are likely to produce local growth strategies and business plans. These will provide the foundations for bids into Government’s ‘single economic pot’ to be established following the spending review this year, drawing on the recommendations of the Heseltine ‘No stone unturned…’report.
Completing the trio, local government awaits imminent responses to the whole place community budget pilot business cases produced in October. Each pilot highlighted work, skills and economic opportunity as part of the community budget. The expectation is that Government will offer significant parts of this agenda across local authorities as they look for savings and efficiency improvements in 2014/15 and beyond.
Each of these tools make considerable demands on local leadership teams, their organisations, and, to be fair, on government. With so much capacity taken out of our sector by public austerity, choosing the right bus to ride, and/or the order in which to take them, is an important challenge as places seek to unlock growth and development in an essentially flat-lining national economy.
The publication last month of Centre for Cities’ (CfC) Cities Outlook 2013 will have been eagerly awaited by our sector. I am sure each of the cities included will have been scanning its pages to see what it tells us about their prospects for the coming period. Cities Outlook 2013 is published at a time when the coalition’s strategies and directions for the remainder of this parliament are largely established and summarised in their mid-term review launched by Cameron and Clegg also in January. The coalition highlights both the Heseltine report proposals for local devolution of growth-related expenditure and the next wave of city deals as priorities for 2013-15. But, how far is devolution to and through LEPs (based on LEP growth plans) and to and through ‘cities’ one of the same thing? Does the rise of LEPs improve the outlook for the cities featured in CfC’s publication, or are there issues and trade-offs which those cities will need to proactively manage?
Government’s approach to local economic development (LED) often (although not always) expects business to be at the forefront of sub-national strategic economic leadership. In their genesis, LEPs, as voluntary associations of business and local authorities, on geographies selected largely bottom up, with no formal powers or resources, epitomised this ‘big society’/’let someone other than government do it’ approach.
Of course this ‘cultural revolution’ (described as ‘maoist and chaotic’ by Cable) did not endure. LEPs have gradually been recipients firstly of government ‘accreditation’, then of start-up and capacity funding, then of Enterprise Zone (EZ) designations, a revolving infrastructure fund (GPF) and other competitive programmes (including RGF). Most recently, government ‘requirements’ have increased exponentially, with the Heseltine ‘No stone unturned…’proposals, their partial endorsement in the autumn statement, and LEP participation – if not quasi-sign-off – of Transport Boards, City Deals etc.
The descent, or maturing (depending on your perspective), of LEPs into a major arm of sub-national governance raises business engagement as a major public policy issue. If local economies are to be increasingly led and influenced by business, the character of that leadership is worthy of thought and consideration.
My blog last week urged our sector to get a full local understanding of the latest ONS statistical releases – census, GVA, and employment participation rates. My motivation was to ensure impending work on growth strategies is rooted in robust, intelligent interpretation of evidence on how local economies have been and are performing. There are two major challenges with an evidence based approach, however. Firstly, given these strategies will be an integral part of a process of bidding for government resources, local leadership teams need to make a judgement on how government will interpret evidence. Based on the first half of this parliament, that is an almost impossible judgement call to make. Government’s announcement of RGF Round Four illustrates this challenge perfectly.