Local Enterprise Partnerships have been offered more than £24 million to help with administration costs following complaints that they were expected to promote economic development without any financial support.
Business Minister Michael Fallon said the cash had been made available “in response to recent strong representations”.
Local Enterprise Partnerships involve business leaders and local authorities, and were created with Government encouragement following the abolition of regional development agencies, the giant regional quangos set up by Labour to support the economy.
But while regional development agencies such as Birmingham-based Advantage West Midlands had budgets running into hundreds of millions of pounds, the new local enterprise partnerships (LEPs) received almost no central government funding.
The Greater Birmingham and Solihull LEP, which covers Birmingham, Solihull, East Staffordshire, Lichfield, Tamworth, Bromsgrove, Cannock Chase, Redditch and Wyre Forest, depends largely on support from local councils and businesses to allow it to operate. This often means support in kind, such as the use of premises or staff time, rather than cash donations.
Under the Government’s new proposals, the 39 LEPs across the country will receive a share of £5 million immediately. They will also be offered up to £250,000 each per year over the next two years, but only if they can find matched funding from elsewhere.
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.”
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.”
Previously, LEPs nationwide shared in a £5 million start-up fund provided by the Government. This was a one-off fund designed to help pay for start-up costs only, and Ministers said they expected LEPs to become self-sustaining.