Background

Local Enterprise Partnerships (LEPs) are responsible for a significant amount of public funding used to drive inclusive growth[1], increase prosperity and improve productivity across 38 regions in England[2]. They do this by convening local stakeholders to develop evidence-based economic strategies for their area. However, because LEPs are non-statutory bodies, they can look and operate very differently from each other, in terms of size, capacity and governance. While they must be chaired by a someone from the private sector and draw at least half of their members from private business, LEPs are free to choose their membership and structure, resulting in different combinations of sub-boards, business groups or advisory panels[3]. This variation in structure and membership has an impact on how LEPs operate in practice, including their focus on inclusive growth, the importance they place on social infrastructure[4], and the extent to which they include the voluntary sector in the planning of local economic strategies.

LEPs are required by government to identify local challenges and priorities ’based on clear evidence‘ by engaging deliberately and constructively with local partners. This includes ‘third sector representatives’ and ‘community interest groups’[5]. However, since their inception, there have been widespread concerns within the voluntary sector that LEPs often fail to recognise the importance of meaningful engagement charities and the communities they represent. As a result LEPs can lack a coherent and consistent approach, or obvious commitment to, the development of truly inclusive growth strategies for their area.

In recent years, these concerns have been brought to the fore with the planned launch of the government’s UK Shared Prosperity Fund (UKSPF). The UKSPF – scheduled to begin in April 2021 – will replace the money local areas currently receive from the European Union and seek to reduce inequalities between communities across the UK. While the precise details of the UKSPF, including its design, operation and priorities are currently unknown[6], it is widely expected that LEPs will play a role in its administration. If LEPs are chosen as the preferred method of identifying local needs and distributing funding, it is essential that they have sufficient knowledge of disadvantaged communities and the complex and interrelated social issues that impact on the delivery of inclusive growth strategies. The meaningful engagement of local partners, such as voluntary organisations, is key to this. In a companion paper to this report, we propose a set of design principles for how the UKSPF should be designed and delivered.

Why engagement with the voluntary sector is important

Identifying investment opportunities requires drawing on the experience and expertise of a diverse range of economic and social actors across the LEP area. Evidence suggests that the most effective economic strategies integrate all influential economic players into decision-making.[7] The 2018 government review of LEPs[8] emphasised the importance of meaningful collaboration:

Successful Local Enterprise Partnerships have…worked closely with universities, business representative organisations, further education colleges, the voluntary sector, and other key economic and community stakeholders. It is Government’s expectation that Local Enterprise Partnerships continue this collaboration in order to draw on the best local knowledge and insight.

LEPs should consider the voluntary sector as a key strategic and delivery partner. The sector is a major economic player in each LEP area, making it an important partner for identifying local strengths, challenges and opportunities when investment strategies are developed. In 2017/18 the voluntary sector contributed £18.2bn to the UK economy representing around 0.9% of total GDP, employed over 900,000 people, and helped mobilise volunteering activity worth £23.9bn in 2016[9]. The scale of this economic contribution filters down to the local level.

The allocation of funding and identifying need must be rigorously scoped out and managed if it is to reach intended beneficiaries. Voluntary organisations are embedded in the communities they serve, allowing them to provide unique insight into local experience and ‘what works’ when LEPs are designing and commissioning programmes and services. This is particularly important when LEPs are commissioning programmes that seek to promote inclusive growth as social impact outcomes must be central to investment planning.

The sector can support LEPs by providing support and intelligence on the following:

  • Contact with under-represented groups: voluntary sector organisations can reach and gather insight from marginalised or disadvantaged communities, helping to develop policy responses that have a real and sustainable impact for prosperous communities.
  • Expertise: by working with and across communities of place and interest, voluntary organisations often have existing working relationships with partners that LEPs can draw on. They also have technical expertise in community-led local development, community grants and social inclusion.
  • Preventative services and multi-agency working: the sector excels in early intervention and ‘wraparound’ support for people with multiple and interrelated health and wellbeing needsthat can impact on the success of inclusive growth strategies, such as housing, mental health and educational needs.
  • Social value: When making funding decisions, LEPs are required to consider how investments can maximise social value. Voluntary organisations are experts in delivering social value and often provide services that secure wider social, economic and environmental benefits beyond the primary intervention.

Where capacity permits, a senior member of staff from a local voluntary sector infrastructure organisation – or council for voluntary service (CVS) – will often be best placed to represent the views of the voluntary sector on LEP boards and sub-boards. Infrastructure bodies have a good understanding of the voluntary sector landscape in their area and the various – often complex – social issues that charities are working on that can support the delivery of inclusive growth strategies. They are therefore well-placed to convene discussions and gather intelligence from across the sector, or signpost LEPs to specific organisations working on issues that can assist in decision making and priority setting. It is important to note, however, that since LEPs were created there has been a corresponding decrease in funding to support local infrastructure organisations engagement with regional structures[10].

Footnotes

  1. ‘Inclusive growth’ takes account of pre-existing individual and structural inequalities so all communities have an opportunity to contribute to, and benefit from economic growth.

  2. The government has committed £12 billion to local areas in England between 2015-16 and 2020-21. Of this, £9.1 billion has already been allocated through Growth Deals negotiated between central government and individual LEPs https://www.nao.org.uk/wp-content/uploads/2019/05/Local-Enterprise-Partnerships-an-update-on-progress-Summary.pdf

  3. Some are based on pre-existing local partnerships - for instance under the last government’s multi-area agreement partnership approach - and others were created from scratch

  4. ‘Social infrastructure’ includes the provision of social resources such as open spaces, sports facilities, healthcare, education and training, childcare centres, social care and youth services, are crucial to people leading healthier lives and participating meaningfully in society and the economy. Charities and community groups are a vital component of a healthy social infrastructure, by providing advice, services and support networks for marginalised communities.

  5. The government has said that the UKSPF will ‘at a minimum match the size of [EU Structural Funds] in each nation […] and ensure that £500 million of the UK Shared Prosperity Fund is used to give disadvantaged people the skills they need to make a success of life’. It is hoped more details will be announced before or at the Spending Review 2020.

  6. Recent years have seen a significant reduction in funding for local voluntary infrastructure. https://blogs.ncvo.org.uk/2018/01/23/who-needs-local-infrastructure/