Latest Public Sector News

04.09.14

Most small business owners ‘don’t know what a LEP is’

Two out of three small business owners don’t know what a Local Enterprise Partnership (LEP) is, new research from the Federation of Small Businesses (FSB) has shown.

Although the research was of members in Greater Manchester and North Cheshire, it is thought the results indicate a nationwide lack of knowledge about the role of LEPs, which are the voluntary partnerships between local authorities and businesses set up in 2011 by the Department for Business, Innovation and Skills. They help determine local economic priorities and lead economic growth and job creation within the local area, each with vast multi-million pound budgets to spend.

The research is in a report published jointly with the Centre for Local Economic Strategies (CLES).

When asked: ‘Do you think your local LEP focuses enough on the needs of small businesses like yours?’, 65.4% of respondents said they didn’t know what a LEP was. Only 1.4% of respondents answered ‘yes’.

The FSB’s regional chair for Manchester and North Cheshire, Richard Gregg, said: “The underlying message in our own regional research, and indeed the FSB national report, is that many LEPs need to reach out and communicate better with small businesses. The fact so few small firms in Greater Manchester even know what a LEP is truly shocking.

“LEPs can do this by improving consultation with business representative organisations, by ensuring a board member takes a lead on SME stakeholder engagement, and by issuing communications aimed at small firms in a regular and timely manner.”

The report goes on to call for LEPs to place small businesses at the heart of their plans for economic growth, citing small and medium sized business being responsible for 84% of private sector jobs between 2010 and 2013, and representing 48% of private sector turnover.

John Allan, National Chairman, Federation of Small Businesses, said: "LEPs are crucial to delivering local economic growth across England. While some have done a good job of reaching out to the small business community, others need to up their game. Small firms will ultimately be the ones creating most of the jobs and prosperity in the private sector, so it is absolutely essential that they are at the heart of all LEPs thinking and plans.

"LEPs will be handling £17bn of public money between now and 2021. It is important and only right to understand how it is being spent. Because the sums of money involved will increase substantially, it is vital that LEPs are more accountable and transparent so local authorities, businesses and the public can be confident they will deliver for the local economy and are using taxpayer funds effectively.”

The report does say that LEPs are the right vehicle to deliver local economic growth across England but stresses that the voice of small businesses needs to be better represented within LEPs.

A spokesman for the Department for Business Innovation and Skills said: “The Government welcomes the FSB’s support for Local Enterprise Partnerships (LEPs) as the right approach to local economic development.

“This report acknowledges that the LEPs have evolved and improved and many of its recommendations are in line with Government policy.

“We are working with LEPs to implement the 39 Growth Deals announced in July and to put in place robust processes to guide local decision-making, accountability, monitoring and reporting, evaluations, and communicating progress to local people and businesses.”

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