On 15 March 2023, the Chancellor announced that the central government support (core funding) for Local Enterprise Partnerships (LEPs) in England would be withdrawn from April 2024 with functions carried out by LEPs including business representation and local economic planning transitioning to local government. All residual funding, resources and assets previously allocated and utilised by the LEPs are also to be transferred.  

There is the opportunity for residual funding from Local Enterprise Partnership (LEP) integration to be safeguarded and reallocated to support future economic development initiatives and projects and as a way of reducing and mitigating some of the risks of integration.

However, making a compelling case for ringfencing this funding is essential in the context of the many other local authority funding pressures and priorities. A robust business case can be the most effective route to securing the decisions needed to protect these funding streams and to enable swifter decision-making in future that can maximise the impact of available funding, including through securing and leveraging other third party investment.  

What we’ve heard:

• Making the case for future funding for economic growth and development will be challenging when competing with pressures on funding for statutory services such as Social Care 
• Many local economic development teams are trying to ensure residual funding that is transferred across as part of LEP integration remains ringfenced for economic growth and to ensure the organisation has sufficient capacity and resources to deliver in line with its objectives and continue to fund existing economic growth programmes 
• The risk of losing or diluting funding streams to support economic growth was one of the key themes highlighted in our recent roundtable discussion ‘The Future of LEPs: navigating the path to successful integration’ 
• The Government’s December 2023 guidance indicates that areas bidding for local growth funding in future may be asked to demonstrate how their proposal fits into the local economic strategy 
• Opportunities to secure match funding or direct funding from third parties is increasing in importance 
• LEP integration may feel like the next in a long line of responsibilities being passed down, but there are clear opportunities ahead. 

The visual notes captured by Lim, at 31ten & Shared Intelligence‘s roundtable session – 26th January 2024

Our thoughts:

• The financial position of local authorities to fund non-statutory growth functions will be challenging with the major strains on local government resources.
• Pooling of remaining LEP resources and Council financial resources to support place-based growth may provide the best opportunity to safeguard funding for defined economic development functions today. This approach can deliver swifter decision-making to support investment priorities and maximise the impact of available funding.  
• Local authorities are likely to continue to position themselves for government funding programmes at every opportunity.
• Approaches to secure match funding and leverage other third party investment can be most effective when a clear Investment Strategy and ring-fenced set of funding is made available to provide funders with confidence about commitment to the expected benefits. 
• Decisions to ringfence funding for economic growth will be subject to business case and other local authority governance approvals.
• With a general election looming, there is unlikely to be a cash injection for economic infrastructure or delivery projects for another 12-18 months.
• Now is the time to work with the private sector using the business voice to consolidate what is needed and to create new and innovative ways of delivering equitable growth. 

How we can help:

• Preparation of Business Case to support a decision to ring-fence remaining LEP resources alongside other Council financial resources to support place-based growth.
• Exploration of tools and structures that can maximise impact and accelerate the pace of change through available funding, such as the establishment of Investment Funds. 
• Supporting the process of market engagement to identify and leverage opportunities for third-party and private-sector investment.

We’re happy to help!