News

November 09, 2010

Business support reforms “still lack clarity”

Small firms have warned that the Government’s new business-support infrastructure is confusing, following the announcement that the first 24 Local Enterprise Partnerships (LEPs) are going ahead.

The Government made the announcement in its Local Growth White Paper, which proposes that LEPs take on certain roles, including coordinating proposals for the Regional Growth Fund (RGF), supporting high-growth businesses and working with the Government to set out local investment priorities. However, it does not give LEPs any legal definition or obligations.

The LEPs will not automatically obtain funding from central Government, but can apply for funding from the RGF along with private bodies.

Forum of Private Business (FPB) spokesman Phil McCabe said that the lack of definition about how LEPs would operate and be funded was worrying.

“We are concerned that the public sector support provided to small businesses in the regions will be diminished,” he said. “The main issue is a lack of clarification and information about how the LEPs will operate. We hope that the LEPs will at the very least direct small businesses to the wide range of support on offer, as the Business Links do.”

British Chambers of Commerce director general, David Frost, said that businesses needed details of how the LEPs will help them face everyday local issues. “Local businesses want to know exactly how the new LEPs will make it easier for them to tackle the problems with planning, skills and transport that stifle private sector growth,” he said.

However, Department for Business, Innovation and Skills (BIS) spokeswoman, Una Flynn, said LEPs are not obliged to deliver anything, as they are voluntary partnerships. “But as one of the requirements for an LEP to be accepted is that there is business representation and we expect the boards to be 50/50 business and civic leaders, business support is likely to be a key priority,” she said.

“The Government has also provided £200 million per year for business support, including the Manufacturing Advisory Service and the new Business Link helpline and website,” added Flynn.

The first 24 LEPs, including those in Greater Manchester, Leicester and Leicestershire and West of England, have been given the go-ahead to establish boards and start assessing their priorities. However, the RDAs will not be abolished until March 2012. Businesses can currently still receive support from their local RDAs and Business Links.

• "Real business people" to shape Local Enterprise Partnerships
• Regional Business Links to be closed, confirms BIS