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 governments 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

Corresponding author: lee.pugalis@northumbria.ac.uk Page 1 of 25

Introduction The rescaling and accompanying institutional reconfigurations of English planning, regeneration and economic development policy activities (hereafter referred to as subnational 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 subnational 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 UKs Labour Government (1997-2010), decentralisation in England was rather more constrained (Goodwin et al., 2005; Lee, 2008). As a result, subnational 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 topdown 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 governments 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 Page 2 of 25

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 Labours 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 governments landmark White Paper Local growth: realising every places 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 Coalitions 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. Page 3 of 25

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 Coalitions 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 Coalitions 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 Coalitions emerging laisser-faire approach in the sixth section. We close the paper by confronting the peculiarities of the Coalitions 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 Englands subnational 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 Blairs 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 Labours 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). Page 4 of 25

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 Governments 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 Page 5 of 25

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 centralisedregional 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 Labours 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 Labours 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 managerialgovernance 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 Labours 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, Page 6 of 25

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. Statecentrism 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 Labours 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 governments White Paper, which entirely replaced Labours 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 Page 7 of 25

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 subnational development in relation to central government. Having 33 state-sanctioned subregional LEPs covering approximately 93 per cent of Englands 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. Page 8 of 25

Table 1. The primary role(s) of LEPs in relation to national responsibilities Central government responsibilities
National policy in the form of a National Planning Framework Determination of infrastructure and planning decisions of national importance

Policy area

Potential role(s) of LEPs

Oversight and consultee Later potential for legislation to take on statutory planning functions, including determination of applications for strategic development and 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 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 Advocacy role largely, but some LEPs may continue the development and promotion of innovation infrastructure Provide information on local niche sectors Feeding in local issues to any national policies Provide information on local offer 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

Planning

Infrastructure

Delivery of strategic transport infrastructure Digital connectivity led by Broadband Delivery UK

Business and enterprise

National website and call centre

Innovation

Sectors Inward investment Employment and skills

Delivered through the Technology Strategy Board and an elite network of Technology and Innovation Centres Leadership on sectors of national importance and the development of low carbon supply chain opportunities Support national Manufacturing Advisory Service Led by UK Trade & Investment

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 Chancellors Emergency Budget (HM Treasury, 2010a), which was promptly followed by a Comprehensive Spending Review (HM Treasury, 2010b), the scale of the Coalitions fiscal retrenchment policy became widely known, where they proposed the first rebalancing dimension. Firstly, the Coalition considered that England had become overreliant 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 overdependent 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 Coalitions 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. Page 10 of 25

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 Labours 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 governments 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 Conservatives 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 Englands 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 Page 11 of 25

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 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

Post-submission guidance
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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Size

Governance and constitution

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 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

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 Bodies that represent real economic geographies or reasonable natural economic geography, whether the geography is supported by business and is sufficiently strategic

Added value/impact

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 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). Page 13 of 25

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 Coalitions 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 exmining 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-functionalinstitutional 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 Coalitions 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 Page 15 of 25

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 Page 16 of 25

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 stateinduced 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 lowertier 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 (Gonzlez, 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 Coalitions discourse we have revealed how attention has been directed towards the past failures of Labours regional bureaucratic machinery, in order to provide the rationale for a new political meta-narrative of permissive localism. The Coalitions 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 Page 18 of 25

overarching roadmap of their economic transition plan it did not necessarily set out a coherent strategy. Together with sketching out what the Coalitions 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 Coalitions 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 socalled 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 Coalitions 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 miniRDAs, 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 Coalitions single-minded pursuit of rebalancing the economy in abandoning regions does not abandon the many sub-national places already largely bypassed by Labours spaces of competiveness. Labours failure to narrow the gap between the have-lots and the havenots (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. Page 20 of 25

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Hickey, D. (2010): 'Five things we learnt from LEPs', Regeneration & Renewal Blog, 8 September, Available at: http://regenandrenewal.blogspot.com/2010/09/five-things-welearned-from-leps.html [Accessed on 8 September 2010]. HM Government (2010a): The Coalition: Our Programme for Government (London, Cabinet Office). HM Government (2010b): Local growth: realising every places potential (London, The Stationery Office). HM Government (2011): The New Local Enterprise Partnerships: An Initial Assessment: Government Response to the Committee's First Report of Session 2010-11 - Business, Innovation and Skills Committee (London, The Stationery Office). HM Treasury (2007): Review of sub-national economic development and regeneration (London, HMSO). HM Treasury (2010a): Budget 2010 (London, Stationery Office). HM Treasury (2010b): Spending Review 2010 (London, The Stationery Office). HM Treasury (2011): Budget 2011 (London, Stationery Office). HM Treasury and Business Innovation and Skills (BIS) (2010): The path to strong, sustainable and balanced growth (London, The Stationery Office). Imrie, R. and Raco, M. (1999): 'How new is the new local governance? Lessons from the United Kingdom', Transactions of the Institute of British Geographers, 24(1), pp. 45-63. Inch, A. (2009): 'Planning at the Crossroads Again: Re-evaluating Street-level Regulation of the Contradictions in New Labour's Planning Reforms', Planning Practice and Research, 24(1), pp. 83-101. Jonas, A. E. G. and Ward, K. (2002): 'A World of Regionalisms? Towards a USUK Urban and Regional Policy Framework Comparison', Journal of Urban Affairs, 24(4), pp. 377-401. Jones, A. (2010): 'Here We Go Again: The Pathology of Compulsive Re-organisation', Local Economy, 25(5), pp. 373-378. Larkin, K. (2010): Regional Development Agencies: Our Position (London, Centre for Cities). Lee, S. (2008): 'Constrained discretion and English regional governance: The case of Yorkshire and the Humber', in: Bradbury, J., Ed. Devolution, Regionalism and Regional Development: The UK Experience (London, Taylor & Francis), pp. 130-146. Liberal Democrats (2010): Liberal Democrat Manifesto 2010 (London, Liberal Democrats). Localis (2009): Can Localism Deliver? (London, Localis).

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Shaw, K. and Greenhalgh, P. (2010): 'Revisiting the 'Missing Middle' in English SubNational Governance', Local Economy, 25(5), pp. 457-475. Shaw, K. and Robinson, F. (2007): ''The End of the Beginning'? Taking Forward Local Democratic Renewal in the Post-Referendum North East', Local Economy, 22(3), pp. 243260. Smith, N. (1996): The new urban frontier: gentrification and the revanchist city (London, Routledge). SQW (2010): Local Enterprise Partnerships: A new era begins? (London, SQW). Townsend, A. R. and Pugalis, L. (2011): The territorial governance of sub-national space. Regional development and policy - challenges, choices and recipients. Newcastle: Regional Studies Association (RSA). Tyler, R. (2010): 'LEP revolution in the regions puzzles as many as it excites ', The Telegraph, 23 August, Available at: http://www.telegraph.co.uk/finance/businessclub/7957747/LEP-revolution-in-the-regionspuzzles-as-many-as-it-excites.html [accessed on 23 August 2010]. Valler, D. and Carpenter, J. (2010): 'New Labour's Spaces of Competitiveness', Local Economy, 25(5), pp. 438-456. Willis, B. (2010): 'Stoke to axe 70 renewal jobs', Regeneration & Renewal, 8 November, pp.

SNR had four major objectives: empowering local authorities in the promotion of economic development and

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 compromise between devolving powers and responsibilities on the one hand and retaining central Whitehall control (often through the auspices of regional institutions and QUANGOs).

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