The LEP challenge: taking decisive steps in the great rebalancing act

IPPR North, business and industry, communities, economy, finance, local government, regional issues

Author(s):  Ed Cox
Published date:  09 Dec 2010
Source:  Public Service

Looking back over the period of economic growth up to the onset of the recession, the North of England was transformed in many areas. However, new research from ippr north has found that while economic growth is vital for improving deprived neighbourhoods, alone it is not sufficient.

Our research compared the experience of matched pairs of deprived neighbourhoods in Liverpool, Wakefield and Middlesbrough and analysed why some areas improved their prospects over the past decade while others lagged.

Three key factors emerged: first, the characteristics of places are critical for the choices people make about where to live. In lagging neighbourhoods, poor management and upkeep of the area, poor facilities and housing, crime and antisocial behaviour and, in some cases, isolation, led to areas becoming neighbourhoods of last resort, with those that could, choosing to move on. Housing quality and choice and the 'clean, safe and green' agenda play a key role in improvement, increasing residents' quality of life but also making an area attractive to potential residents. Who is moving in and out of the area matters most in determining its character, and policies aimed exclusively at boosting labour and housing market mobility are likely to make things worse in lagging neighbourhoods.

Second, worklessness is a key challenge in all deprived areas, but different neighbourhoods face different contexts of worklessness and demand for labour. All six case study areas have large proportions of their working age population claiming inactive benefits, but claims reduced more sharply in our improving areas.

Employment support and training interventions offered a source of innovation: the most successful schemes were flexible, sustainably funded and had a local presence, but crucially they were also linked into opportunities in the surrounding area. Third, 'community outlook' also has explanatory power for why some neighbourhoods have improved while others lagged. Outlook refers to the internal and external relation-ships of a neighbourhood that shape life for residents. For example the extent of social networks, the strength and nature of social capital, the vibrancy of voluntary sector organisations and the links between residents and the wider area (as measured by their travel horizons) and between community leaders and decision-makers.

Improving neighbourhoods had active and well connected voluntary sector and community organisations, along with proactive community leaders. Negative community outlook is more likely where there are high levels of worklessness combined with a number of other factors, including: strong attachment to place, negative reputation, inward-looking social networks, weak community leadership and relative isolation. These places are least prepared to embrace the government's Big Society agenda.

What might this mean for emerging Local Enterprise Partnerships? First and foremost, LEPs must not assume that in their general pursuit of economic growth, all neighbourhoods will benefit. Our research shows that high-level strategic planning needs to be much more tightly dovetailed with an understanding of neighbourhoods and their needs and assets. The insight of frontline service providers, local businesses, community and voluntary organisations – and of local residents – is vital here.

But beyond this, LEPs need the powers to act decisively. Housing and planning powers currently vested in local authorities need to be convened in order to take a strategic overview of the housing market across functional economic areas. LEPs need to take back control over business support and be trusted to work collaboratively on innovation and inward investment to kick-start job creation. And they need a significant role in co-commissioning within the new single Work Programme. Above all else they need the financial incentives to drive growth. Tax incremental financing (TIF) is a start but government must move fast to lift restrictions on other forms of local revenue-raising and ultimately reach a new financial settlement with those LEPs that can demonstrate success.

Joined-up, empowered LEPs have the potential not only to stimulate economic growth, but to make sure there is a rebalancing of the local economy in favour of those neighbourhoods in greatest need.


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Ed Cox, Director, IPPR North