By Claire West

Today Miles Templeman, Director-General of the Institute of Directors (IOD), has written to Communities Secretary Eric Pickles and Business Secretary Vince Cable setting out four key principles against which the IOD believes any bid to create a Local Enterprise Partnership (LEP) should be judged.

The IOD has made this intervention because it has become increasingly concerned about the level of ‘parochialism’ emerging during preliminary discussions about the geographical scale of LEP proposals.

The four principles are as follows:

•ACTIVITY: The central focus of LEPs must be wealth creation and economic development. To this end, all LEPs should focus on transport, infrastructure and planning. Other activities can be undertaken if the local business community see fit, however, a clear and narrow focus will deliver more than broad and complex objectives.

•SIZE: All LEPs must be of sufficient geographical size to be able to exercise a strategic bearing on a local economy. At present the IOD is very concerned at a new wave of parochialism that has emerged through the LEP bidding process. Additionally, (and as stated in the original letter from both the Secretaries of State to local authorities) no LEP must be constructed of less than two upper-tier authorities.

•GOVERNANCE: All LEPs must have a minimum of 50:50 business and local authority representation on their ‘board’ with the Chairman also being drawn from business. All local authority positions should be occupied by elected officials and there must be no third party representation on the ‘board’ from trade union, consumer, education or other backgrounds. These will all be important consultees and partners, but do not require representation on the LEP ‘boards’.

•BUSINESS SUPPORT FOR LEPS: When considering the level of support given to a proposal by the business community it is important for the Government to ask what the view was of all the nationally represented business bodies based locally. It is not enough for a bid to derive support from a handful of named business proponents. The IOD believes that if a LEP proposal cannot demonstrate near to universal business support from all organisations and business within and outside the proposed area, then it should not go ahead.

Commenting Miles Templeman, Director-General of the Institute of Directors, said:

“The private sector has strong views on the way that LEPs should operate and we are increasingly concerned that in some areas the views of business are not being taken into account. Let’s be clear — the Government should back only the very best LEP collaborations and there should be no rush to grant permission to every proposal received. For this reason we have written to the Government to ensure that rigorous scrutiny is applied to the LEP proposals that are put to them.

He added:

“We believe that each proposed LEP should only go ahead if it has critical mass in terms of size, is supported by the vast majority of business bodies based locally, and focussed on the issues of transport, infrastructure and planning development. If these conditions are not met by bids and business is not given a central role in the governance of each new LEP, the Government must be willing to say no on a case by case basis.”