Chancellor George Osborne has revealed that England’s local enterprise partnerships (LEPs) will be able to bid for cash from a £2 billion fund.
From 2015-16 the money will be set aside each year in what will be known as the Single Local Growth Fund and LEPs, which are partnerships between local authorities and businesses, will be able to compete for a share of the cash. The plan was outlined in the 2013 spending review with further details being revealed in the Government report Investing in Britain’s Future yesterday.
The report says: “The Government has asked LEPs to develop local strategic economic plans. LEPs are the right vehicle for driving economic growth as they bring together businesses and local leaders allowing them together to determine local priorities, decide what an area needs and plan local infrastructure and other economic spending over the long-term. It will be on the basis of these plans that places will negotiate Growth Deals with Government, securing control over resources and greater influence, including an allocation from the £2 billion a year Single Local Growth Fund that is created in this Spending Round.”
The Single Local Growth Fund will allow local business leaders to make decisions on what is needed to help stimulate the economy in their areas. The money, which will come from other Whitehall budgets, could be used to help small and medium-sized enterprises (SMEs) and start-up businesses to achieve business growth.
Mr Osborne says: “We’re embarking on major reforms to the way we spend money locally through the creation of the Single Local Growth Fund that Lord Heseltine proposed. This will be £2 billion a year – that’s at least £10 billion over the next Parliament – that local enterprise partnerships can bid for.”
He added: “Our philosophy is simple: trust people to make their own decisions and they will usually make better ones.”
But some business leaders say the fund is nowhere near big enough. The report written by Lord Heseltine had recommended £49 billion was put aside over a four year period to cover the money needed by England’s 39 LEPs.
George Cowcher, Chief Executive of the Derbyshire and Nottinghamshire Chamber of Commerce, welcomed the cash but said it fell “woefully short” of the amount suggested by Lord Heseltine.
David Frost, Chair of the LEP Network, described the funding as “a good start”.
He said: “It allows the LEPs to show what real added value they can bring. If they do that, it’s quite clear that other monies will flow. Yes, more would always be better, but now it’s up to the LEPs to prove they can deliver.”
Other new initiatives aimed at helping business include increasing investment in apprenticeships by using money saved through cost-cutting measures at the Department for Business.
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