What the Greater Birmingham LEP must do now
Now that the Birmingham-Solihull Local Enterprise Partnership has been approved by the Government, it is reasonable to ask what happens next?
LEPs, as far as anyone can see, will have no budgets to speak of and little in the way of executive powers.
What they will have is committed and enthusiastic support from the business community, for the time being at least.
The tireless efforts of Birmingham Chamber of Commerce chief executive Jerry Blackett to help get the Greater Birmingham LEP off the ground can only be applauded. And Jerry, ever the optimist, is already looking forward to the influence that businesses will be able to bring over the ã15 billion of public expenditure in the LEP area.
He puts it like this: "LEPs allow us to identify a small number of important priorities into which we can all focus our collective efforts and resources. Some of these will not require new money but simply, better co-ordination and joining up of existing spend."
This goes straight to the nub of the issue. How radical will the LEP be? Or to put it another way, how radical will the councils allow the LEP to be?
Unprecedented public spending cuts amounting to about 26 per cent of local authority budgets over the next four years surely present unique opportunities as well as challenges. One obvious possibility is that the LEP councils - Birmingham, Solihull, Lichfield, East Staffordshire and Bromsgrove - could save significant sums of money by merging some services and back office functions.
There is a taste of the future in London where Tory-controlled Kensington and Chelsea, Hammersmith and Fulham and Westminster councils have announced their intention to merge main services and save about ã100 million a year.
They will operate under a single chief executive and set of senior directors. Services to be merged include social care, education, refuse collection and street cleaning. Each council will, however, retain its own identity and councillors, set its own council tax and hold separate elections.
The proposal, which has the backing of Local Government Secretary Eric Pickles, brings together three large boroughs covering a population of 589,000, employing 14,100 staff and with budgets totalling ã2 billion. Birmingham City Council, by contrast, is twice the size of the new London super-council, covering a population of one million, spending ã3 billion and with about 55,000 employees.
Were Birmingham to contemplate a similar merger with Solihull and the other LEP partners, the population covered would be about 1.5 million with spending power getting on for ã4.5 billion. The opportunities for sharing services and stripping out senior and middle management are not only immense but also sit comfortably with the previous Government's Total Place initiative, which urged public bodies to share budgets and cut duplication.
This, to quote Jerry Blackett, is exactly the sort of important priority project behind which the LEP should throw its weight. Furthermore, if the business community could be given a clear steer by the LEP board that radical merging of local authority services is on the cards, support for Local Enterprise Partnerships would receive a huge and welcome boost.
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This govt. is rapidly reveiling itself to be the impending disaster many feared it would be. Despite a strong whiff of good intentions, there is a growing sense that a bunch of sixth-formers have taken over the country and are busily experimenting to see how their poorly thought through ideas might impact the British economy. There is a general assumption that if Labour came up with something, then it must be bad, and a resulting throwing out of babies with bathwater across govt. departments.
I was always sceptical of just how committed to localism and devolution Cameron really was. The scrapping of the RDAs and the return of spending decisions to Whitehall is in actual fact a massive move back towards the top-down, centralised state the coalition claims to dislike.
At a wider level one now has to question how on earth UK plc is going to push itself on the global stage. The regional dimension to UK govt. was a deliberate attempt to create bodies beneath Whitehall that were big enough and strategic enough to take on proper long term planning and project out into the real world of corporate capitalism. One suspects the LEPs, with few funds and an in-built parochialism, will be badly placed to take on this kind of work.
What is the betting that in ten years time there will be all too predictable calls for regional bodies to better make the case for the West Midlands at national, European and global levels?
Whilst I would share your applause for the efforts of Birmingham Chamber of Commerce chief executive Jerry Blackett, I do wonder whether weâÂÂre now seeing a major massaging down of expectations as to what LEPs can and will do.
The government started off by saying that LEPs will help rebalance the economy. But with no or little funding, few powers, and patch-work quilt of LEP bodies itâÂÂs difficult to see how this will happen, and some of David BaileyâÂÂs blogs here at the post have made so clear.
Yes, merging council back-office functions could indeed usefully save some money but is that now the level of ambition for LEPs? What happened to providing leadership on economic development and rebalancing the economy?
Suddenly the RDAs donâÂÂt look quite so bad after all!