Do LEPs correspond to functional economic areas?

The coalition government plans to scrap eight regional development agencies in England and allow local authorities to form new ad-hoc areas called local enterprise partnerships. The main criticisms of the existing regional economic development strategy, aside from paranoid conspiracy theories in relation to Europe, are that there is a lack of direct accountability and that the boundaries of the areas for regional administration do not correspond to functional economic regions. But will local enterprise partnerships offer anything new? Will they offer an approach flexible enough to match the geographic and economic reality?

Existing regional structure

The point about the current arrangements being divorced from functional regions is true in some places and less so in others. The most staggering deviation from economic reality is around London, where travelling the full length of the M25 one passes through no less than three regions. The reason for this is historical, when the London mayor was established in 2000 it was not felt expedient to set new boundaries for the London region. The Greater London Council had been abolished in 1986, but not the statutory Greater London administrative area, so it made more sense at the time to use the existing boundary rather that go through the painful process of defining a new London region.

The Datford bridge connects two of the current regions, and this image is taken from a third

The other two regions in the south east have boundaries that make no sense at all, other than satisfying an attempt to create roughly equal areas in terms of populations and area. The South East region includes Buckinghamshire and Kent, but not Essex and Hertfordshire, which are in the same region as Norfolk. There is no region corresponding to anything approximating the home counties. Outside the south east the regions are more coherent, with the North East most corresponding to a functional region, hence it being the first and only region to have had a (failed) referendum on devolution. The remaining regions are problematic mostly on their peripheries, where in a more flexible system areas might be allowed to overlap, would be totally reassigned, or are sufficiently far from a major urban centre to be ambiguous.

Limitations of LEPs

Looking at a map of the LEP proposals to be green lighted so far reveals that in some areas these issues are being dealt with and in others they are not. The North East continues as more-or-less a single functional economic region. One can’t help wonder if the only reason it is divided into two LEPs is because Eric Pickles couldn’t bear the thought of continuing anything from the previous administration, but the Tees Valley area is already functioning as a sub-regional component, so the split from the rest of the north east has some basis in rationality. The LEPs around Manchester and Liverpool essentially scrape off the ambiguous hinterlands areas of Lancashire and Cumbria, and in Yorkshire and the Humber the creation of Leeds and Sheffield LEPs does much the same, removing the outer rural parts of North Yorkshire from the mix. The question has to be asked: what of these ‘gaps’ in the new economic development regime? Are they destined to fall outside the framework or will they be incorporated in some other way?

Aside from reflecting the big conurbations of the Midlands and the North, the LEPs also provide a mechanism for Bristol to connect with its suburbs and hinterland again since the abolition of Avon County Council in the 1990s. Interestingly the same didn’t happen in Humberside despite calls for it from business. Turning an eye to London things become less coherent. Can Hertfordshire really be described as “an area that can be plausibly demonstrated to an inter-connected economy and labour market with local coherence and integrity“? Or Kent-Essex for that matter? Hertfordshire, no offence meant, is economically a string of ribbons radiating from London. It has no real central focus other than London itself. Watford is a suburb of London and Stevenage an exurb. Kent-Essex is perhaps even less a function economic area in itself. The areas known as the Thames Gateway (north Kent and south Essex) have huge similarities, but even these two places have little connecting them (a bridge, a tunnel and a passenger ferry) and little opportunity for synergies. As with Hertfordshire, both look to London economically.

London
London sits in the middle of the vast mega-region of the Greater South East

Within the south east is the biggest anomaly of all, Croydon London borough is part of an LEP stretching down to the south coast. If any region radiating from London were to be represented by an LEP, I would expect it to be the “western wedge” focussed on Heathrow and stretching to encompass Slough and Reading. Regional development in London is devolved to the mayor of London and the London Development Agency. It is unclear how Croydon’s involvement with an LEP will play into that. Perhaps it will prove easier to scrub Croydon from the Coast to Capital LEP area. It might have made more sense to divide Greater London into several LEPS, furthering the already existing sub-regional policy agenda.

So in summary, the LEPs appear to carry on the status quo in the north east, and in the other conurbations it is a trimming of rural hinterlands to create sensible functional economic areas. In places like Bristol economic development is aligned to a former county council area, but in Hull the opportunity seems to have been missed. However, in the south east the new administration is repeating the mistakes of the past. There is a failure to recognise that localism in economic policy is impossible because of the existence of the Greater South East region. The result is new smaller areas for economic development that make no more sense than the last larger set. Widening the mayor of London’s responsibility for economic development to areas outside Greater London would help resolve this issue, but would create serious concerns about accountability, although that is another matter.

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