The Government has announced “core funding” for Local Enterprise Partnerships to help their growth priorities.
An interim £5m funding package will be made available immediately for all LEPs, for the remainder of the year.
This is part of a wider £24m offering, where LEPs can draw on up to £250,000 per year, over the next two years.
The Government has suggested that where funds are matched locally, the overall pot could equate to £45m over the period.
Funding will be split from the Department for Business, Innovation and Skills (BIS) and the Department for Communities and Local Government (DCLG).
Business and Enterprise Minister Michael Fallon, said: “It is crucial we arm Local Enterprise Partnerships with the tools and resources they need to play a prominent role in delivering growth and jobs for their communities. This funding will help LEPs plan for the long term and ensure they can remain locally-led instead of dependent on central government support.
“We need to ensure LEPs remain voluntary business and civic partnerships so they are in the best possible position to deliver sustainable growth and job creation in their areas. Already we are seeing LEPs across England delivering innovative schemes in their communities. This financial support will help the partnerships to continue this work.”
LEPs will be invited to bid for the funding for 2013/14 and 2014/15, detailing how they would be able to offer a cash match from public or private resources.
Local Growth Minister Mark Prisk said: “Today’s £25 million boost will give Local Enterprise Partnerships the financial stability they need going forward, to build on their early successes and tailor the support they offer to local needs.
“If matched by local support, this could mean that up to £45 million will be available to help LEPs turn their plans into jobs and growth.”
Chair of the Leeds City Region LEP, Neil McLean, welcomed the news. He said: “Today’s announcement is excellent news and an important signal of Government’s commitment to the success of LEPs. I am delighted Ministers have listened to the messages they have received from LEP Chairs on this - a relatively small amount of additional funding will go a long way, empowering us to take forward work to drive growth and jobs at local level.”
Lord Haskins, Chairman of the Humber LEP, added: “The funding is welcome and something we have called for. As with most LEPs, our modest resources to date have limited what we can do. This additional funding will enable us to increase our capacity to support the LEP’s key priorities.”
At the end of June, the Institute of Economic Development made a robust submission to the BIS Select Committee Inquiry into progress with the LEPs.
In its submission to the Committee, the IED stated that: “Expectations placed on LEPs are high, but the meagre budgetary provision for LEPs (certainly relative to allocations to RDAs previously) imposes significant constraints on their ability to fulfil their remit. It also raises major concerns about a lack of willingness to invest in economic development activities at a time of recession/very low growth. The expectation that better performance will be achieved, in tougher times, from a fraction of the resource is at best counter intuitive.”
The IED chair, Keith Burge added: “LEPs have been crying out for resources and, especially where other monies have not been forthcoming, have been trying to do their job with both hands tied behind their backs. constraints a little.”
Diane Savory, chair of Gloucestershire LEP, which is driven by economic development company GFirst, said: “Since Gloucestershire LEP was launched in May 2011 we have relied on public sector funding, predominantly from Gloucestershire County Council. This has acted as the catalyst for a very successful LEP in Gloucestershire and it is vital that this support continues in order to match fund government money in the next two years and continue to drive a private sector led economic growth agenda.”