LEPs 'must strengthen business cases for EU cash'

Most of England's public-private local enterprise partnerships (LEPs) need to strengthen the business cases in their strategies for spending the £5 billion of European structural funding that they are due to receive between 2014 and 2020, a senior civil servant said this week.

The country’s 39 LEPs submitted their draft strategies for spending the money to Whitehall last month.

Addressing the Institute of Economic Development annual conference this week, Department for Business Innovation & Skills deputy director Sue Baxter said "nearly all" LEPs needed to better explain the rationale for their proposals.

Speaking to Planning at the event, she said: "It’s about how you relate your understanding of your area to the slate of programmes that you want to fund".

She also highlighted that "quite a few" of the areas covered by more than one LEP needed more attention. "You might have thought that they were hedging their bets to get double the money, but they may end up getting no money," she warned.

Many LEPs were showing interest in using European money to set up financial instruments such as venture capital funds, infrastructure investment funds and social investment bonds. But they needed to specify more detailed arrangements for the instruments, she told delegates.

She also highlighted a series of "emerging strengths" in the LEPs’ plans, including "excellent" understanding of local economies and a wider variety of public and private proposed match funding.

Civil servants are feeding back the findings to LEPs. A BIS spokesman said only in "exceptional circumstances" would funding be withheld from a partnership on account of perceived strategy shortcomings.

Nonetheless, the funding package for England still needs to be rubber stamped by the European Parliament and the Treasury, and Baxter said it would be important to tighten up the strategies to maximise the chance of a clear passage.

"The European Commission will look through all LEP Plans to make sure they are robust," she said.

"They are quite sceptical about our way of doing things…they think LEPs are too new and too inexperienced".

Baxter revealed that the sector earmarked for the biggest proportion of structural fund money in the LEP proposals is small business competitiveness (21 per cent), followed by skills development (20 per cent), employment programmes (17 per cent), social inclusion (12 per cent), innovation (12 per cent) and low carbon programmes (11 per cent).

She said that the proportion of the funds earmarked for innovation "was a little disappointing from a BIS point of view, as we pride ourselves on being a knowledge economy".

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