2012 Rebalancing England: Sub-National Development (Once Again) at the Crossroads - pugalis and...

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Rebalancing England: Sub-National Development (Once Again) at the

Crossroads

Lee Pugalis1 and Alan R. Townsend

Paper should be cited as:

Pugalis, L. & Townsend, A. R. (2012) 'Rebalancing England: Sub-National Development

(Once Again) at the Crossroads', Urban Research & Practice, 5 (1), 159-176.

Abstract

Over the last two decades there has been continuous tinkering and wholesale review of the

remit, governance and territorial focus of sub-national development in England. There has

also been mounting agreement that subsidiarity will produce optimum material outcomes. It is

against this background that we provide a critical reading of the UK Coalition government’s

2010 ‘White Paper’ on Local Growth. Revealing the peculiarities of an economic transition

plan which dismantled a regional (strategic) framework, we explore the opportunities that

cross-boundary Local Enterprise Partnerships (LEPs) may provide. After abandoning regions,

LEPs have been promoted as the only possible ‘replacements’ for Regional Development

Agencies and, thus, a prime example of new ‘techniques of government’. We probe the

potentials and pitfalls from the dash to establish new sub-national techniques of government,

and crystallise some key implications that apply beyond the shores of England. Our key

contention is that LEPs have designed-in just as many issues as they have designed-out.

Key words: sub-national development; economic governance; Local Enterprise Partnerships;

Regional Development Agencies

1 Corresponding author: [email protected]

mailto:[email protected]

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Introduction

The rescaling and accompanying institutional reconfigurations of English planning,

regeneration and economic development policy activities (hereafter referred to as sub-

national development) have recently featured prominently in policy circles (see, for example,

Centre for Cities, 2010; Harding, 2010; Mulgan, 2010; NFEA, 2010; Pugalis, 2010, 2011c;

Rigby and Pickard, 2010; Shaw and Greenhalgh, 2010; SQW, 2010; Tyler, 2010). Even

though the election of a UK Conservative-Liberal Democrat ‘Coalition’ government in May,

2010 provided a policy jolt to spatial practice across the sub-national terrain of England, such

breaks and incremental shifts are nothing new (Albrechts et al., 1989; Fothergill, 2005;

Harrison, 2007; Imrie and Raco, 1999; Inch, 2009; Jonas and Ward, 2002; Valler and

Carpenter, 2010). Whilst ruptures can be triggered by a change in ideological outlook or

political meta-narrative, or indeed socio-economic shocks such as the ‘credit crunch’,

incremental shifts tend to be associated with more mundane policy tinkering emanating from

bottom-up or top-down ‘innovations’, or more often a melting pot of multidirectional policy

interactions. Over the past decade or so there have been continuous tinkering and wholesale

review of the governance, institutional structures, responsibilities and territorial focus of sub-

national development in England. Jones attributes the burgeoning development of such ‘a

peculiarly English disease … that of compulsive re-organisation’ to the centralised nature of

government (Jones, 2010, p. 373; see also Porter and Ketels, 2003). Indeed, as Morgan

(2002) has pointed out, England remains the ‘gaping hole in the devolution settlement’.

Whereas the territories of Scotland, Wales and Northern Ireland achieved significant

devolutionary packages under the UK’s Labour Government (1997-2010), decentralisation in

England was rather more constrained (Goodwin et al., 2005; Lee, 2008). As a result, sub-

national development in England tends to endure politically-induced ruptures (Pugalis,

2011a) more frequently than may be the case in other countries.

In most European countries the middle tiers of government (regions, provinces, etc.) are top-

down devolved units (elected or nominated) which have authority in many sectors at once.

They tend to possess powers that are legally entrenched in federal or other constitutions, and

cannot simply be altered by an incoming government’s administrative decisions. In the UK,

this applies only to Scotland, Wales and Northern Ireland – which all have regular elections

and policy fields in which they enjoy legislative authority. In England the Labour government

was stopped short in its tracks by the negative result of a referendum in one region, the North

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East, in 2004: by a strong majority, the electorate rejected proposals for an elected Regional

Assembly (RA) (Rallings and Thrasher, 2006; Shaw and Robinson, 2007). Historically the

regions of England existed as statistical and/or administrative units, though having

approximately twice the size of population of the average member of the Committee of the

Regions. It had been partly to meet European Union requirements that the Conservative and

Labour governments of the 1990s standardised and integrated a Government Office (GO) in

each region, with Labour instituting Regional Development Agencies (RDAs) in 1999. It is

important to note that these integrating roles were well staffed and financed, and unelected

RAs continued to develop after the North East referendum result of 2004, for example

through the accretion of the statutory role of strategic spatial planning. However, the tripartite

arrangement of regional organisations was almost entirely dependent on Whitehall funding

and powers.

Enshrined in Labour’s Review of sub-national economic development and regeneration in

2007 (SNR)i (HM Treasury, 2007) and consistent with broader trends at the European scale

(Commission of the European Communities (CEC), 2009), there has been growing policy

agreement that subsidiarity – devolving power and resources to the lowest appropriate spatial

scale – will produce optimum outcomes on the ground (see, for example, Communities and

Local Government (CLG), 2008a). This policy direction has continued under the incumbent

Coalition government by way of their distinctive brand of ‘localism’ (Bishop, 2010;

Conservative Party, 2010; Localis, 2009). Indeed, the pace of change has rapidly accelerated

since the Coalition entered power, although their policy delivery has tended to be haphazard,

reflecting a new ‘permissive’ approach, that is also susceptible to legal challenge (see, for

example, Pugalis and Townsend, 2010) and could be accused of devising ‘policy on the

hoof’.

The focus of this paper is on deciphering the Coalition government’s landmark ‘White Paper’

Local growth: realising every place‟s potential (HM Government, 2010b), published on 28,

October 2010, that sought to provide a road-map for their overriding ambition of rebalancing

the economy. Through the Coalition’s open invitation for local authorities and businesses to

establish cross-boundary Local Enterprise Partnerships (LEPs), a new acronym was instantly

born. Even so, the huge interest surrounding LEPs suggests that they cannot easily be

discounted as merely just another piece of jargon (Hickey, 2010), particularly as they have

‘replaced’ RDAs as the prime governance entities available for sub-national development.

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The key contention of this paper is that LEPs, following an extensive line of governing

bodies operating at a ‘larger than local’ spatial scale, have designed-in just as many issues as

they have designed-out. Firstly, through an exegesis of the Coalition’s discourse we analyse

the case for change; revealing that attention has focussed on past failures to provide the

rationale for a new political meta-narrative. Secondly, we provide a critical synopsis of the

White Paper; arguing that the Coalition’s road-map of the future is predicated on dictates of

the market and market logics. Thirdly, we expose the ‘new model’, intended to rebalance

England, for involving at least three dimensions: sectoral, state-community relations and

spatial. Fourthly, we provide a nuanced examination of LEPs. Fifthly, we interrogate the

territorial dimension of sub-national development, before analysing the Coalition’s emerging

laisser-faire approach in the sixth section. We close the paper by confronting the peculiarities

of the Coalition’s economic transition plan for lacking the support of a regional framework,

and draw out some key implications and implicit misconceptions in the concluding section.

Picking up the pieces: the case for change

As the Coalition entered power they mercilessly set about reorganising England’s sub-

national institutional policy architecture (see Figure 1 for a timeline of crucial policy

junctures). But before reconstitution could take place, the case for change needed to be made.

Whilst the administrative regions of England pre-date the election of Tony Blair’s ‘New

Labour’ Party in 1997, their legislation for RDAs to operate in a regional tripartite

relationship with GOs and unelected RAs for each region ensured that institutional-policy

infrastructure inherited by the Coalition was viewed, largely unfavourably, as an unnecessary

legacy of thirteen years of Labour. RDAs, Quasi-Autonomous Non-Government

Organisations or QUANGOs, were in essence the guardians of their respective regional

economies. Each of the nine RDAs was charged with improving economic competitiveness

and also narrowing regional economic disparities with other regions, which demonstrated a

tension transparent in Labour’s policy: marrying the ideals of social inclusion with the

imperatives of economic competitiveness. Responsible to Whitehall and governed by state

appointed private sector-led boards, RDAs were arguably the chief institutional agency under

Labour for promoting spaces of opportunity within the regions. However, their success in

closing the gap in regional economic output and enhancing social inclusion is less clear and

more disputed (EEF, 2007; Larkin, 2010).

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Figure 1. Policy development timeline

Even so, RDAs were powerful multi-purpose economic bodies, collectively responsible for

the annual administration of billions of pounds of central government ‘Single Programme’

resources and management of the European Regional Development Fund (ERDF), on behalf

of the UK Government’s department for Communities and Local Government (CLG).

Alongside their strategy-setting powers, in the form of Regional Economic Strategies (RESs)

and then integrated Regional Strategies (the latter set out in SNR), RDAs were the key public

sector players in sub-national development – wielding significant statutory and financial

influence. They provided a strong link between localities and Whitehall, and therefore

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performed at a key nexus of power. This was reiterated in SNR and the subsequent Local

Democracy, Economic Development and Construction Act 2009 – but complicated by a

superfluity of sub-regional economic partnerships and other loose arrangements of economic

governance interests, such as City Regions and cross-boundary Multi-Area Agreements

(MAAs).

In the run up to the general election and beyond, Coalition ministers contended that it was

counterproductive to attempt to ‘rebalance economies as diverse as those of Leeds, Liverpool

and Tees Valley from [their] offices in Whitehall’ (Pickles and Cable, 2010). The centralised-

regional system was criticised for its elite approach and bureaucratic-planning view, which

tried to ‘both determine where growth should happen and stimulate that growth’(HM

Government, 2010b, p. 7). The Coalition declared that Labour’s approach failed because it

stifled ‘healthy competition’ by working against the grain of economic markets (HM

Government, 2010b, p. 7). Against this background, the dismantling of regional institutional

architecture was based on three intertwining policy issues, concerning democratic

accountability, size in terms of relevance to functional economic area, and effectiveness of

existing economic governance arrangements.

Firstly, regional spatial planning and economic development were deemed to lack political

oversight and thus created a democratic deficit (see, for example, Prisk, 2010). Operating as

they did as arms of central government, Pickles maintained that RDAs ‘gave local authorities

little reason to engage creatively with economic issues’ (cited in Communities and Local

Government (CLG), 2010b). Such rhetorical claims about the ‘democratic deficit’ of

devolution are a well-used discursive ploy (Morgan, 2002). The crucial flaw with Labour’s

decentralisation agenda was the failure to follow up the establishment of RDAs with elected

RAs. Secondly, the narrative goes that regions were ‘too large’ to enable managerial-

governance entities to operate effectively. As a consequence Coalition ministers’ claimed that

regions grouped together far-flung local authorities. The implication was that regions were

ill-suited to work with the spatial dynamism of ‘functional economic areas’ or ‘natural

economic geographies’. Thirdly, the Coalition asserted that the imposition of (almost)

anything regional added a bureaucratic layer, which had resulted in needless overlap (Pearce

and Ayres, 2007). This was part of a wider ideological reaction against the ‘big state’ and

Labour’s state-mode of production, but was accentuated by lower political identification in

Coalition held areas of local government, particularly pronounced in the south of England,

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and the greater size of English regions compared with those of EU member states (Townsend

and Pugalis, 2011).

Whereas both governments emphasised subsidiarity in their respective policy-reviews

(Communities and Local Government (CLG), 2008b; Communities and Local Government

(CLG) and Business Enterprise and Regulatory Reform (BERR), 2007; HM Government,

2010b; HM Treasury, 2007), there were also notable ideological differences in their

interpretations. Labour, for example, aimed to narrow the growth rates between regions

through centrally controlled target-setting and policy prescriptions from Whitehall. State-

centrism was supported by a strong regional framework and a plethora of more fuzzy spaces

of economic governance (Haughton and Allmendinger, 2008; Haughton et al., 2009), such as

MAAs. In contrast, the Coalition contested that Labour’s regions were ‘an artificial

representation of functional economies’, noting that labour markets ‘do not exist at a regional

level, except in London’ (HM Government, 2010b, p. 7), and asserted that regional housing

targets and allocations had actually impeded growth. In the next section we decipher the

Coalition government’s White Paper, which entirely replaced Labour’s foremost scalar

modes of policy-management.

A road-map of the future?

Making the case for change through a new approach, the Coalition Government outlined in

their Local Growth White Paper that they would:

shift power to local communities and business, enabling places to tailor their approach

to local circumstances

promote efficient and dynamic markets, in particular in the supply of land, and

provide real and significant incentives for places that go for growth

support investment in places and people to tackle the barriers to growth

(HM Government, 2010b, p. 5).

The shift in approach positions businesses at the helm of partnerships, covering areas which

reflect ‘real’ economic geographies. This is aligned with the Coalition concept of the ‘Big

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Society’ (closely identified with localism), which places distinctiveness and subsidiarity at its

heart by ‘recognising that where the drivers of growth are local, decisions should be made

locally’ (HM Government, 2010b, p. 8).

The White Paper was intended to set out a new direction for sub-national development under

Coalition national leadership and also spell out ‘what it means in practice’ (Prisk, 2010). Yet,

the White Paper is not so much a strategy for action or a cohesive whole, but more of an

outline of a series of distinct (and sometimes disjointed) sectoral and spatial aspirations that

the Coalition intend to implement over the coming years. It is difficult to neatly summarise as

it covers so much ground, including reference to planning, economic development and

enterprise, transport, tourism, innovation, supply chain development and housing, in fewer

than 60 pages. Nevertheless, to help paint a picture of the path of change, including what

functions may be localised as others are centralised, Table 1 helps distil some of the more

notable policy pronouncements in terms of potential – not mandatory - sub-regional (LEP)

functions and those to be ‘led’ nationally.

The table clearly shows the scope and extent to which LEPs may perform a role in sub-

national development in relation to central government. Having 33 state-sanctioned sub-

regional LEPs covering approximately 93 per cent of England’s population (at the end of

April, 2011) is preferable for undertaking some strategic activities to a situation where each

of the 292 lower-tier local authorities of England is solely responsible for delivery of these

policy areas. Without sub-national governance arrangements, the likelihood of local authority

competition would intensify. Also, it is widely recognised that business interactions do not

respect or even reflect local administrative boundaries. Therefore, it is valuable to have a

governance forum at the sub-regional level where cross-boundary issues and disputes can be

prioritised and hopefully reconciled. Yet, there were some transport, infrastructure and

innovation questions which were valuably conducted at the regional level that may prove

more problematic to address at the sub-regional scale. There are crucially many functions of

previous regional organisations that will remain only at theLocal Authority level, including

formal legal responsibility for planning frameworks and planning application case decisions.

And on the other hand, a number of crucial issues have been recentralised in London,

including business advice, innovation and inward investment, while the actual funding and

management of employment and training matters remain under the direct control of national

government departments and QUANGOs.

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Table 1. The primary role(s) of LEPs in relation to national responsibilities

Policy area Potential role(s) of LEPs

Central government

responsibilities

Planning

Oversight and consultee

Later potential for legislation to take

on statutory planning functions,

including determination of

applications for strategic

development and infrastructure

National policy in the form of a

National Planning Framework

Determination of infrastructure and

planning decisions of national

importance

Infrastructure

Strategy formulation and engagement

with local transport authorities on

their local transport plans

Cross-boundary co-ordination of bids

to the Local Sustainable Transport

Fund

Support the delivery of national

initiatives

Delivery of strategic transport

infrastructure

Digital connectivity led by

Broadband Delivery UK

Business and

enterprise

Brokerage and advocacy

Take actions on issues such as

promoting an entrepreneurial culture,

encouraging and supporting business

start-ups, helping existing businesses

to survive and grow, encouraging

networks and mentoring

Direct delivery support and grants

will be subject to local funding

National website and call centre

Innovation

Advocacy role largely, but some

LEPs may continue the development

and promotion of innovation

infrastructure

Delivered through the Technology

Strategy Board and an ‘elite network’

of Technology and Innovation

Centres

Sectors

Provide information on local niche

sectors

Feeding in local issues to any

national policies

Leadership on sectors of national

importance and the development of

low carbon supply chain

opportunities

Support national Manufacturing

Advisory Service

Inward

investment Provide information on local offer Led by UK Trade & Investment

Employment

and skills

Advocacy role in terms of skills

development

Work with providers to influence the

delivery of Work Programme at local

level

Contribution to handling major

redundancies

Led by Skills Funding Agency

Led by Department of Work &

Pensions and Jobcentre Plus

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Rebalancing England: a new model

The UK was fully involved in the global economic upheavals emerging in 2007. Therefore,

as the economic rule book was being rewritten, when the Coalition entered power they

proposed a ‘new model’ to rebalance the economy of England. We identify three dimensions

of rebalancing to this model – sectoral, state-community relations and spatial – that are both

explicit and implicit in the White Paper.

Through the Chancellor’s ‘Emergency’ Budget (HM Treasury, 2010a), which was promptly

followed by a Comprehensive Spending Review (HM Treasury, 2010b), the scale of the

Coalition’s fiscal retrenchment policy became widely known, where they proposed the first

rebalancing dimension. Firstly, the Coalition considered that England had become over-

reliant on financial services and a rebalancing was required in terms of other sectors, such as

advanced-manufacturing, to help support an export-led recovery (HM Treasury and Business

Innovation and Skills (BIS), 2010). Consequently, central government will ‘provide national

leadership on framing policies towards sectors of national importance’ (HM Government,

2010b, p. 43), such as the low and ultra low carbon vehicle sectoral market. The Coalition

also considered that the public-private split of economic activity was in need of rebalancing

in favour of the private sector, arguing that: ‘Too many parts of the country became over-

dependent on the public sector’ (HM Government, 2010b, p. 6). Related to the sectoral

rebalancing dimension was the matter of rebalancing state-community relations (small state

and Big Society). It is the third dimension of the Coalition’s rebalancing rhetoric that

concerns spatial implications, ‘so that new economic opportunities spread across the country’

(Pickles cited in Communities and Local Government (CLG), 2010a). Recognising that it is

potentially economically unsustainable and certainly socio-environmentally regressive to rely

on London and the South East as the disproportionate generators of national prosperity,

therefore, to ‘succeed’, requires a ‘need to rebalance the economy and allow other regions to

catch up with the South East, boosting the capability and productivity of every area’ (Prisk,

2010).

Reshuffling the pack but now with less high value cards

It may now be commonly accepted in many disciplines that places are connected in diverse,

diffuse and complex ways (Massey, 2005), yet this view is not yet fully accepted in practice.

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For this reason, over the past five years or so, think-tanks and policy-driven research projects

have been constantly banging the drum that the economic footprints of cities stretch beyond

their administrative boundaries (see, for example, Centre for Cities, 2010, p. 2). Taking

forward the policy direction set out in Labour’s SNR, the Coalition have continued to

embrace the recent policy logic for the need to operate across ‘real’ geographies rather than

administrative constructs, of which regions were very large examples. It is this view that

helps underpin the Coalition government’s rather radical plans and subsequent action to

‘replace’ the RDAs with a plethora of (sub-regional) LEPs. They are intended to perform a

crucial role: operating at a scale to help negotiate central-local relations. Originally set out in

the Conservative’s local government Green Paper: Control shift: returning power to local

communities (Conservative Party, 2009), then confirmed as a key policy by the Coalition

(HM Government, 2010a), the intent was for LEPs to be joint local authority-business bodies

that would promote local growth. The 2010 Budget Report stated that the Ggovernment will

‘support the creation of strong local enterprise partnerships, particularly those based around

England’s major cities and other natural economic areas, to enable improved coordination of

public and private investment in transport, housing, skills, regeneration and other areas of

economic development’ (HM Treasury, 2010a, p. 31).

LEPs, viewed as new ‘techniques of government’ (Foucault, 1991 [1978], p. 101), constitute

the institutional interface between individual localities (in terms of local authorities, selective

business interests and other economic stakeholders) and the UK government, or more

accurately particular ministerial departments. Yet, at the closing date for LEP proposals from

individual areas, no policy guidance had been issued by government to inform the

development of LEP proposals beyond a few paragraphs set out in the letter of invitation by

the responsible ministers; Cable and Pickles (see Pugalis, 2010). It was not until the

September deadline had lapsed, and over 60 bids had been made, that the Coalition published

the Local Growth White Paper (HM Government, 2010b). Perhaps most significant in the

pattern of delay was the longstanding rivalry between the two ministerial departments –

Communities and Local Government (CLG) and Business, Innovation and Skills (BIS) – and

their respective predecessors (Pugalis, 2011a, c). When the personalities and ideologies of

their respective cabinet ministers – Messrs Pickles and Cable – were added to the mix it is

probable that a cohesive government view on the form of LEPs could not be reached. Indeed,

Pickles, rooted in the local council lobby, is ‘rabidly anti-regional’ whereas Cable, an

economist, sees the value of retaining some regional structures and was amenable to retaining

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the more favourably viewed RDAs, such as those in the North (Bailey, 2010; Bentley et al.,

2010). Indeed, his department, BIS, has more recently decided to reintroduce state regional

offices in all but name through the introduction of six ‘BIS Local’ headquarters in order to

provide the department with a ‘policy presence outside of Whitehall’.

There is merit in distilling the guidance issued on LEPs both prior to and post LEP

submission (see Table 2), where subtle differences in pre and post submission guidance are

detectable. In terms of LEPs, the White Paper mentioned ‘lots of ‘coulds’ and ‘shoulds’ but

nothing definitive’ (Dickinson, 2011). The lack of crucial details and clarity that many

stakeholders desired left a large question over whether LEPs would be equipped to deliver

their goal of enabling local growth.

Table 2. LEP guidance

Pre-submission guidance Post-submission guidance

Role and

functions

Provide strategic leadership

Set out local economic priorities and a

clear vision

Help rebalance the economy towards the

private sector

Create the right environment for business

and growth

Tackle issues such as planning and

housing, local transport and infrastructure

priorities, employment and enterprise, the

transition to the low carbon economy and

in some areas tourism

Support small business start-ups

Work closely with universities and further

education colleges

Provide the clear vision and strategic

leadership, developing a strategy for growth, to

drive sustainable private sector-led

development and job creation in their area

Government particularly encourage

partnerships working in respect to transport,

housing and planning as part of an integrated

approach to growth and infrastructure delivery

Could take on a diverse range of roles, such as:

working with Government to set out

key investment priorities

supporting high growth businesses

promoting an entrepreneurial culture,

encouraging and supporting business

start ups, helping existing businesses

to survive and grow, encouraging

networks and mentoring

working with Government in

developing sector policies

strategic planning role, including the

production of strategic planning

frameworks, making representation on

the development of national planning

policy and ensuring business is

involved in the development and

consideration of strategic planning

applications

strategic housing delivery

collaborating with local skills

networks to agree skills priorities and

to access funding through the Skills

Funding Agency

working with local partners to help

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local workless people into jobs

coordinating proposals or bidding

directly for the Regional Growth Fund

and coordinating approaches to

leveraging funding from the private

sector

providing information on the local

offer in respect of inward investment

becoming involved in delivery of

national priorities such as digital

infrastructure and bidding to become a

delivery agent for nationally

commissioned activities

Size Better reflect the natural economic

geography; covering the real functional

economic and travel to work areas

Expect partnerships would include groups

of upper tier authorities, which would not

preclude that which matches existing

regional boundaries

Bodies that represent real economic

geographies or reasonable natural economic

geography, whether the geography is supported

by business and is sufficiently strategic

Governance

and

constitution

Collaboration between business and civic

leaders, normally including equal

representation on the boards of these

partnerships

A prominent business leader should chair

the board, but Government are willing to

consider variants

Sufficiently robust governance structures

Proper accountability for delivery by

partnerships

Putting local business leadership at the helm, it

is vital that business and civic leaders work

together The Government will normally expect to see

business representatives form half the board,

with a prominent business leader in the chair Partnerships will want to work closely with

universities, further education colleges and

other key economic stakeholders. This includes

social and community enterprises The Government does not intend to define local

enterprise partnerships in legislation

The constitution and legal status of each

partnership will be a matter for the partners,

informed by the activities that they wish to

pursue

Added

value/impact

Partnerships that will create the right

environment for business and growth, over and

above that which would otherwise occur

The geography of LEPs: new territories but the same old politics

LEPs are a mechanism for enabling collaboration across traditional boundaries; be they

administrative, political, cultural, geographical or sectoral. Industry, academic and media

attention has focused on the scope, role, priorities, resourcing and powers of LEPs, but

‘especially what areas they will cover’ (Finch, 2010). With the potential to steer the broad

complex of spatial interactions, including transport connectivity, housing provision,

economic development and skills, geography is an important dimension in the territorial

focus of LEPs (Centre for Cities, 2010; Marlow, 2010; Pugalis and Townsend, 2010).

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Initially it was made clear that LEPs could take the territorial form of RDAs in areas where

they proved popular, such as Northern England and the Midlands. However, the anti-regional

discourse coming from Whitehall, no more so than from the Communities Secretary, Eric

Pickles, weakened rapidly the likelihood of regional LEPs (or new generation RDAs)

becoming acceptable. Indeed, once it was made known that LEPs were to be self-financing –

receiving no national government support towards running costs – and that the strategic

physical and business assets accumulated by RDAs over the best part of a decade would not

be transferred to them, any hope of the formation of a new generation of streamlined, more

‘business friendly’ RDAs quickly dissipated.

It is well recognised that administrative areas, including those formed by local authority

boundaries, do not reflect the spatial logic of contemporary society or functional economic

flows. However, it is not the case that the groupings of local authorities formed under the

umbrella of a LEP can necessarily do so either. Specific economic, social, cultural or

environmental interaction will determine the ‘natural’ boundary (to invoke the Coalition’s

discourse), catchment or scale that one should work with. So, for example, it would be

extremely unlikely for the geography of a LEP to adequately reflect both business supply

chains and travel to work areas. Consequently, as the bids have demonstrated, most

propositions were based on a limited range of economic flows and interactions in deciding

their geography (see Figure 2 for an overview of the range of LEP applications).

Figure 2. The range of applications for Local Enterprise Partnership status

Size (Largest employed population): Kent-Essex (1.494 million), Leeds City Region,

Greater Manchester, East Anglia

Size (from the smallest employed population): South Somerset & East Devon (123,000),

Fylde & Blackpool, Hereford, Shropshire & Telford, South Tyneside &

Sunderland, Newcastle-Gateshead

Self-containment: Cumbria (95.5%), Leeds City Region, West of England (former Avon),

East Anglia

(Proportion of 2001 Census employed population working within the overall boundaries)

Self-containment (from the least self-contained): Bexley, Dartford & Gravesham (53.8%),

Surrey, Fleet, Hook & Camberley, Northumberland & North Tyneside, Buckinghamshire.

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Analysing the initial LEP propositions in comparison with Travel-to-Work self-containment,

as a proxy measure for ‘natural’ economic market areas, demonstrated that there was a close

correlation between those areas displaying 75 percent and greater self-containment and the

first wave of 24 approved LEPs. Derived from this analysis, it is reasonable to infer that the

complexity and multiplicity of functional economic geographies have been curtailed in the

Travel-to-Work simplification. Worse still, in fashioning the geographic patch of many initial

LEP proposals, political horse-trading has often overridden what shaky evidence existed on

functional economic market areas. In these instances, deals were made less on trust and

perhaps more on the basis of less suspicion than of ‘them lot over there’. Examples of this

type of politicised deal-making and parochial mentality were apparent across the North East

(excluding Tees Valley) and Lancashire, in particular. More positively, there were some

initial LEP propositions that openly recognised the limitations of local authority

administrative building-blocks and therefore opted to have overlapping boundaries.

Consequently, some councils are members of more than one LEP (for example, the major ex-

mining borough of Barnsley that is a member of both Leeds City Region and Sheffield City

Region LEPs). Other overlapping geographies that emerged from LEP bids, however, were

less a reflection of the complexity of spatial dynamics and multidirectional economic flows,

but rather more preoccupied with territorial disputes or ‘place wars’.

There is arguably a range of functions which is best performed at the level of ‘real’ or

functional economic areas, such as employability skills. However, it is less likely that other

complex issues, including transport, will neatly correlate with the new quasi-functional-

institutional boundaries relating to LEPs. From this perspective, the new ‘spatial fix’ is just as

likely to generate as many issues as the regional spatial fix which LEPs replace. By

derogating the regional policy-architecture – not to mention pan-regional initiatives such as

the Northern Way – accumulated under Labour, the Coalition has opened up a major vacuum

between the localities and Whitehall.

The emerging laisser-faire approach

The Coalition’s approach to unravelling the policy knot associated with abandoning regions

in favour of localism has been quixotic. The chaotic transitional period had created little

scope or opportunity for staff to transfer between the bodies. The disastrous outcome was a

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huge loss of human capital and all the associated tacit and institutional knowledge. There was

also uncertainty over the disposal of the RDAs’ numerous business and physical assets, with

BIS responsible for the former and CLG the latter. This process was further complicated,

particularly in the case of many site acquisitions, which had often been obtained as but one

piece in the strategic regeneration jigsaw. Thus, with substantial public sector resources

already ‘sunk’ into them and ongoing financial obligations, it may be more appropriate to

consider some of these so-called assets as short-term liabilities or money pits. There was also

uncertainty as to whether the LEPs of a former region were indeed encouraged to work

together, as Coalition ideology tends to prefer competition, perhaps even at the expense of

weaker areas. Following the abandonment of a longstanding system of regional grants to

industry, there was uncertainty as to the eligibility criteria of the new Regional Growth Fund

(RGF). However, ‘growth’ became a keyword in the spring of 2011 as the initial policy

disposition of the Coalition met a negative set of economic indicators.

The first results of the RGF allocation were emphasised and a set of 21 ‘Enterprise Zones’

(EZs) were announced in the 2011 Budget (HM Treasury, 2011), these being areas with tax

incentives and simplified planning rules (refashioning a policy of the 1980s Conservative

government). With the first 11 EZs supposedly spatially targeted ‘on city regions and those

areas that have missed out in the last ten years’ (Communities and Local Government (CLG),

2011, p. 3), they ‘amount to the first real test for the new LEPs ... By discouraging LEPs from

dividing up EZs, each expected to be 50 to 150 hectares, the government is obliging councils

to focus on what will best achieve growth for the wider area’ (Bounds and Tighe, 2011, P. 4).

However, it remains to be seen whether limitations of the original EZs, including business

displacement, sustainability and market distortion, have been designed out of this new

generation, which government claim is ‘[a] modern day approach’ (Communities and Local

Government (CLG), 2011, p. 3).

In terms of new arrangements for running LEPs, there was no funding, except for the

opportunity to bid for a small Capacity Fund to support intelligence gathering and board

development, which is little more than a fig leaf for budget cuts. The lack of funding could

prompt one to ask, what indeed would be the purpose of securing recognition for LEP status?

The answer is simply that the LEP would be the official sub-national development conduit for

representations, which presumably would be listened to by Whitehall. Judging by recent

history, LEPs will have to negotiate with individual government departments and their

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respective QUANGOs rather than liaising with a single point of contact across Whitehall,

such as a ‘champion’ for a particular LEP. However, national government has a habit of

directly creating or inviting proposals for the formation of sub-national development

governing entities that begin as streamlined bodies with a focussed remit, only for them to

subsequently act as a convenient peg to hang numerous other policy hats. It is such state-

induced mission creep that was a decisive factor that undermined the role of RDAs (Pugalis,

2011c).

LEPs may find themselves in the unenviable position of staying true to their locally-rooted

priorities and ambitions (that is likely to leverage minimal national government resources) or

reacting to national priorities (that may include some financial incentives). And increasingly

it appeared that the functions of LEPs were confined to visioning and setting strategic

direction rather than decision-making, delivery or commissioning bodies. As a result, since

the concept of LEPs emerged onto the scene in 2010, all manner of businesses and their

representative organisations, together with other interest groups, have expressed repeated

fears of them becoming ‘Local Authority-dominated talking shops’. Protracted arrangements

to establish new governance arrangements also sparked concerns that business interest would

wane without some ‘quick wins’.

Among the many topics in their purview, one, that of skills, is seen as critical by business

members, while that of town planning is highlighted as significant to developers and others,

both with previous precedents. Skills were the subject of previous business-led committees

prior to RDAs, in the shape of Training and Enterprise Councils established in the early

1990s by a Conservative government (Bennett et al., 1994). Skills remain a great concern at

the present juncture of ’rebalancing’ the economy amid high youth unemployment and

redundancies, and are a leading item in the thoughts of business in many LEPs. Yet, Higher

and Further Education Colleges remain under separate departmental control, and there are

considerable problems in aligning educational courses with those sectors and occupations

where short and likely longer-term demand exists. At the same time, the Department for

Work and Pensions, responsible for the (national) Work Programme – the new set of

measures to induce the unemployed to return to work – and working age benefits, remains

resolutely opposed to co-ordinating much local activity with bodies such as LEPs.

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In terms of town planning, the relevant department, CLG, published a Localism Bill in

December, 2010, which, once enacted, would radically rescale planning: removing the

regional tier and implementing a new neighbourhood tier below the level of the 292 lower-

tier Local Authorities across England. Yet, the government response to the House of

Commons, Business, Innovation and Skills Committee inquiry into LEPs merely states that

‘Where local enterprise partnerships are interested in strategic planning the Government will

encourage the constituent local planning authorities to work with them’ (HM Government,

2011, p. 22). As a result, the majority of LEPs only appear to be interested in an ‘informal’ or

‘loose’ style of planning. Such a fluid form of planning is advocated by some, such as

Richard Rogers (2011), from a purist perspective of shaping places, yet many business

interests, such as the Chamber of Commerce, regard statutory planning as providing legal

certainty for investment activity. However, if LEPs are to take on a more formal role in the

statutory planning process, it is probable that significant tension will arise between the needs

of business and of democratic accountability. How will different communities needs fare in

such a radically reconstituted system is a crucial question, yet to be adequately addressed.

Closing remarks

State-led restructuring of sub-national development activities in England has (once again)

been drastically reorganised. In the context of global policy convergence (González, 2011),

this potentially poses some key implications that apply beyond the shores of England as

messages transmute as they journey through different policy communities. Through this

paper we have examined how the institutional-policy terrain has recently met significant

volatility and a (potentially) radical review. In addition, we have drawn attention to the

ideological undercurrents not always noticeable at the policy surface. Through an exegesis of

the Coalition’s discourse we have revealed how attention has been directed towards the past

failures of Labour’s regional bureaucratic machinery, in order to provide the rationale for a

new political meta-narrative of permissive localism. The Coalition’s intent to rebalance the

economy – predicated on private enterprise enablement, public spending sector cuts, radical

reform to the planning system and institutional reconfigurations – was sketched out in a series

of pamphlets, including their respective election manifestoes (Conservative Party, 2009;

Liberal Democrats, 2010). This intent was confirmed in their Programme for Government

(HM Government, 2010a) and was enshrined in the Local Growth White Paper (HM

Government, 2010b). Nevertheless, whilst the White Paper went some way in presenting an

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overarching roadmap of their economic transition plan it did not necessarily set out a

coherent strategy. Together with sketching out what the Coalition’s national and sub-national

development philosophy is, it was also a reflection of their permissive approach: covering a

lot of ground in a relatively loose framework, and less concerned with the practical details of

implementation. Consequently, the lack of detail, together with the ambiguity and velocity of

changes has generated substantial uncertainty, scepticism and apprehension.

Rescaling is being utilised to help manage the class relations and tensions of economic

regulation (Gough, 2003), perhaps part of the attempt to divert some attention away from the

significant cuts to public sector budgets. Indeed, it is noteworthy that the White Paper rarely

mentioned ‘regeneration’, which is in stark contrast to the political attention that regeneration

as a policy field received under Labour (Pugalis, 2011b). With widespread evidence that

many councils had announced redundancies across the sector within weeks of the

Comprehensive Spending Review (see, for example, Willis, 2010), local authority officers –

and planners in particular – may struggle to efficiently handle simultaneous upward and

downward rescaling responsibilities.

There is a strong policy case to be made that places have different roles to play and functions

to fulfil, whether in terms of regional development, economic growth, urban renaissance,

sustainable communities, rural development or any other policy terms coined to refer to the

process of spatial reordering. LEPs might, in theory, meet this aim more accurately and/or

efficiently than regional entities, such as RDAs. However, we caution against positing LEPs

– composed of groupings of local authorities – as a panacea or spatio-institutional fix.

Viewing LEPs as the latest in a long line of ‘techniques of government’ (Foucault, 1991

[1978], p. 101), brings to the fore new issues which are silently designed-in to their

constitutional web just as others are more vociferously designed-out. The discussion on LEPs

is rapidly evolving and doing so at different paces across the country, with some places left

LEP-less, at the time of writing. Yet, interest generated has been substantial, demonstrated by

62 LEP propositions developed and submitted to government within a short space of time.

This has prompted a considerable amount of discussion, debate and debacle, not least as a

result of the so-called ‘permissive’ approach that the Coalition is taking; which we are

concerned is often reminiscent of an ‘act now, think later’ policy.

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The Coalition’s ideologically-infused policy story goes that regions are ‘too large’ and local

authority administrative boundaries ‘too small’ to enable economic managerial and

governance entities to operate effectively. But whilst sub-regional LEPs may better reflect so-

called ‘natural economic areas’ in some cases, we contend that many are in danger of merely

establishing new administrative constructs, constraints and bureaucratic building blocks.

Further, it is a myth that functional economic areas can be neatly demarcated. Setting any

precise boundary can only arbitrarily self-contain a ‘local’ economy that is globally

connected. We therefore end with a call for the merits of ‘porous’ partnerships to be

adequately considered and the prospect of ‘fuzzy’ boundaries to be engaged.

With public sector cuts beginning to bite deep from April 2011 and other mainstream

regeneration funding quickly evaporating, local government will struggle to financially back

LEPs. The Coalition’s philosophy is predominantly concerned with reducing the budget

deficit and in turn rolling-back the state by enabling private enterprise and business to

flourish. As this is the case, LEPs will need to quickly recognise that they are not mini-

RDAs, but economic leadership groupings operating at sub-regional geographies. Their

greatest success may lie in arbitrating spatial competition between neighbouring localities;

promoting the merits of cooperative advantage. Maintaining the momentum of private sector

engagement has proved too difficult for many of the sub-national techniques of government

that have gone before. Considering that LEPs will have limited, if any, direct resources at

their disposal, when the time arrives, as it surely will, to implement a new replacement

technique of government, it is hoped that the majority of LEPs will not be remembered as

‘toothless tigers’.

Whilst rearranging the deckchairs is to be expected from an incoming government,it is hoped

that the Coalition’s single-minded pursuit of rebalancing the economy in abandoning regions

does not abandon the many sub-national places already largely bypassed by Labour’s spaces

of competiveness. Labour’s failure to narrow the gap between the ‘have-lots’ and the ‘have-

nots’ (Dorling, 2006, 2010b), may be accelerated and injustices deepened under a Coalition

that looks to be pursuing a neoliberal revanchist urban policy (Smith, 1996) against the

‘undeserving’ workless populace (Dorling, 2010a). Whilst we duly recognise that ‘[LEPs],

like their predecessors, are only a means to an end’ (Centre for Cities, 2010, p. 17),

expectations for these new governance innovations are heightened in terms of overcoming the

strategic policy vacuum and enabling a spatially just rebalancing of the economy.

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regeneration, promoting cooperation between local authorities, streamlining regional policy-making and

improving accountability, and reforming government relations with regions and localities. In essence it was a

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