Jamie Carpenter,
Regen.net,
2 July 2010
The coalition Government has withdrawn its stipulation that the public-private partnerships with which it intends to replace the regional development agencies will have to fund their own day-to-day running costs.
Earlier this week, the Department for Business, Innovation and Skills and the Department for Communities and Local Government jointly wrote to councils inviting them to bid to become new local enterprise partnerships.
A version of the letter uploaded on the DCLG website on Tuesday morning said that LEPs would have no dedicated funding for running costs.
The news cast doubt on coalition government assurances that, in areas of the country where councils and businesses backed RDAs, they would be able to retain them more or less as they were, albeit in a rebadged form.
A paragraph of the letter had said: "We are currently considering the current and future budgets, which you will appreciate will be severely constrained. In this context, local enterprise partnerships which are approved will need to fund their own day-to-day running costs. We are also considering how bidding arrangements for government funds will operate within the new system."
But the paragraph is not contained in a new version of the letter, which contains no mention of funding for the partnerships.
A Whitehall source told Regeneration & Renewal: "DCLG accidentally put the wrong version of the letter on their website. They changed this when they realised their mistake."
The source added that the reason that the paragraph on funding was removed was because the Treasury had advised that "we can’t say anything about budgets and funding that would pre-empt the spending review".
The news follows reports of a turf war between business secretary Vince Cable and communities secretary Eric Pickles. The Financial Times reported that Cable thinks that RDAs in the North and Midlands could survive in some form, while Pickles is sceptical.
A DCLG spokesperson said: "The coalition government is determined to rebalance the economy towards the private sector and as part of this it has committed to replacing regional development agencies with local enterprise partnerships.
"As the jointly signed letter makes clear, Government has asked local businesses and councils to work together to develop proposals for local enterprise partnerships ahead of a White Paper on Economic Growth to be published later in the summer. Any subsequent funding issues would be addressed in the Spending Review."
