Running our own affairs

THE blueprint for the region’s economic development was unveiled yesterday, with Tees Valley getting the go-ahead to run its own affairs.

Although the north of the region was not included in yesterday’s announcement, it appears likely that it will get its own local enterprise partnership (LEP) within weeks when the Government will also announce the creation of a regionwide body.

A Tees Valley LEP, covering Darlington, Middlesbrough, Stockton, Redcar and Cleveland and Hartlepool, will be set up to tap into a new “growth fund” to win private-sector jobs.

But Business Secretary Vince Cable felt unable to go ahead with a bid for an LEP stretching from Durham to the Scottish border immediately, telling MPs: “We were disappointed that we got a very fragmented set of proposals.”

However, in an interview with The Northern Echo, Deputy Prime Minister Nick Clegg insisted both LEPs were going ahead, saying: “People in the North-East are delighted to be getting two local enterprise partnerships.”

It then emerged that ministers are also backing a third bid – put forward by the Association of North East Councils (ANEC) and the Northern Business Forum (NBF) – for a regionwide “strategic economic forum”.

In Yorkshire, an LEP for the Leeds “city-region”, which covers all of North Yorkshire, was among 24 given the green light yesterday.

Meanwhile, the Toryfriendly Institute of Directors pounced on confirmation that LEPs will receive no direct funding, warning: “Money will matter. If they don’t have this, they’ll be little more than a toothless talking shop.”

The muddle was seized on by Labour MPs as proof that the Con-Lib coalition had not thought through plans for replacing the One North East and Yorkshire Forward development agencies, which will disappear in March 2012.

They also attacked a fresh “power grab” by Whitehall, which – as The Northern Echo has revealed – will already take back powers over inward investment and development of key sectors, such as the car industry and chemicals.

Ministers let slip that applications to the European Regional Development Fund (ERDF) – which is delivering £324m of aid to the region, over seven years – will now be decided in London.

Until now, a team of council and business leaders at One North East has assessed projects applying for cash, decided which to back and provided some matched funding.

Asked what would happen when the quango disappears, Mr Cable replied: “The process of collating our bids, and making sure we get maximum value, will be led by the Secretary of State for Communities [Eric Pickles].”

Kevan Jones, Labour MP for Durham North, questioned whether Mr Pickles – whose department will lose 60 per cent of its budget by 2015 – would be willing to provide the matched funds the EU demands.

And he said: “This is clearly a Whitehall power grab. If decisions are going to be taken by the Communities Secretary, then he will be tempted to replace some of his own lost budget, rather than look at the priorities for our region.

“The process has been a shambles from the start.

And the key thing is that these LEPs are not even going to have their own budgets.”

Fresh fears were also raised over whether RDA assets will be retained locally, or sold off by Whitehall. Proposals yesterday said the Government would seek to “maximise receipts”.

Speaking to The Northern Echo, Mr Clegg came out fighting, insisting those claiming LEPs would be toothless and would merely beg for government cash were “quite wrong”.

The Liberal Democrat leader said: “That’s very silly and complete nonsense. The business people I speak to are hugely enthusiastic about what we are doing.

“The LEPs are part of a bigger package that is trying to rebalance the economy away from its over-reliance on financial services in the City of London and provide private sector growth in the North-East.

“We are getting beyond the remote, bureaucratic model of the regional development agencies in a radical devolution of power to local authorities.”

Mr Clegg also defended Whitehall’s new role in deciding EU grants, claiming: “They were not being used in a very effective way. They will be aligned with other public, and private funds, to get a bigger bang for our buck.”

The Deputy Prime Minister – who declared the £500m regional growth fund “open for business”, with the first round closing on January 21 – also released more details of how it would operate. No bids under £1m will be expected and LEPs will have to join a queue of private firms, charities, public-private partnerships, universities and other agencies applying for cash.

Town halls cannot bid.

‘Scheme will give local economy much-needed boost’ GOVERNMENT-BACKED plans for a new enterprise body for the Tees Valley, which it is hoped will create jobs and business opportunities, have been welcomed.

The area is one of 24 regions across the country to be chosen for a Local Enterprise Partnership (LEP).

Supporters of the scheme claim it will help secure funding opportunities and give the local economy a much-needed boost.

Sandy Anderson, chairman of Tees Valley Unlimited, which was behind the proposals, said: “We are delighted that the Government has recognised the potential for the Tees Valley Local Enterprise Partnership to create the change that is needed to support our economy.

“There is no doubt that the Tees Valley faces some unique challenges, particularly in relation to the impact of future public sector job cuts, but there are significant opportunities too.

“What we put forward to Government is a really compelling case to build on the industrial strengths we already have, while at the same time, develop those areas where we are starting to see the potential for new business and employment opportunities.”

Middlesbrough Mayor Ray Mallon said: “The Tees Valley LEP will be responsible for key future investment to ensure the sustained, economic growth of this area and the improved prosperity and life chances of the 640,000 people within it.

“It will be our voice, and represents the best opportunity we have to passport Government funding direct to our doors to help us secure the local economy for the next generation and beyond.”

He added: “Once again we have been ahead of the game, and the collective work of the five local authorities has paid dividends – the goal is improved prosperity and quality of life for all our communities.”

James Wharton, MP for Stockton South, said: “For too long, Teesside has been seen as second to Tyneside in the region – we were told we are too small or too fractious to stand on our own two feet.

“This is a resounding vote of confidence in Teesside, Darlington and Hartlepool from the new government and I am delighted things are on track for our own Local Enterprise Partnership.”

Redcar MP Ian Swales said: “Local politicians and business people have worked together to fight for a Teesside-centred LEP and the Government has delivered just that.

“As one of Teesside’s MPs, I will be working closely with the new LEP and the Government to bring much-needed funding and investment to our area.”

Council chief voices concern

WITH the Tees Valley being given the goahead for a LEP yesterday, the remainder of the region’s councils could be left thinking: “What now for us?”

However, Simon Henig, the leader of Durham County Council, said it was wrong to suggest the rest of the North-East had “missed the boat”.

His council initially decided to go it alone in submitting a LEP bid – unsuccessfully – only then to join a single bid with six other councils in Tyne and Wear and Northumberland.

Yesterday, in a letter, the council received encouragement from the Government that a formal revised bid would receive the green light in the next few weeks.

Mr Henig described the dilemma which faced the council and also criticised the process of applying for an LEP, which the Government wants to establish to replace regional development agencies (RDAs) such as One North East.

He said: “I have not been a great fan of the way the process has been conducted and I would have preferred it to be much more transparent right from the start.

“We asked for written feedback early on and did not receive it and it’s only now that we have.”

Mr Henig said the county council had been in a difficult position because of its positioning at the heart of the region and also not wanting to be tied to one bid.

He said: “We did feel initially we had no alternative but to put in a bid of our own.

“My best option would have still been for all 12 councils in the North-East to join together, but I fully respect what the Tees Valley authorities have done.”

Mr Henig said there was no deadline over their LEP bid and dismissed claims that the rest of the North-East had been left at “sixes and sevens”

with the Tees Valley councils quickest off the blocks with a successful proposal.

He said: “The process is being done in stages and it is my hope and expectation that in the next few weeks the whole of the North-East will be included in an LEP.”

Despite efforts to secure an LEP, the council leader said it would not compensate for the loss of One North East.

He said: “There will be no additional budget apart from the regional growth fund, which is being separately set up and that is far less in total than what the RDAs received in their budget.”

Meanwhile, the Government also indicated its support in yesterday’s announcement for an over-arching North-East Economic Partnership, which will represent the whole of the region.

There were fears in some quarters that individual LEPs would struggle to support the needs of the entire North-East economy on a regional and national scale because they will not have the strategic clout.

The Northern Business Forum (NBF), representing many of the region’s major business organisations, sparked a row after sending a letter to every council in the region saying it was not prepared to support individual LEPs in isolation without a larger North-East economic partnership.

Middlesbrough Mayor Ray Mallon later claimed it had reneged on its support for a Tees Valley LEP John Cuthbert, chairman of the NBF, said: “Business and local authorities now need to ensure that the new arrangements are put in place as soon as possible.

“We cannot afford to lose momentum on important regional projects and must have a smooth transition from the regional development.

Enterprise partnerships . . . what they will do

● Work with the Government to set out key investment priorities, including transport infrastructure;

● Co-ordinate proposals, or bid directly for the Regional Growth Fund;

● Support new “growth hubs”, offering specialist advice to high growth businesses;

● Ensure business is involved in the consideration of strategic planning applications;

● Develop incentives for renewable energy projects;

● Strategic housing delivery, including pooling and aligning funding streams;

● Work with local employers and Jobcentre Plus to help people into jobs;

● Become involved in delivery of other national priorities, such as digital infrastructure.

...and what they won’t do

● Receive any direct funding;

● Have permanent offices and support staff;

● Decide which projects should receive European Union structural funds – will be run from London;

● Decide skills strategy and commission training providers – will be run from London;

● Run business support schemes – will be run from London;

● Lobby for inward investment – will be run from London;

● Promote key sector development – will be run from London.