Opposition Liberal Democrats councillors on Newcastle City Council are calling on the city’s Labour council administration to set out how the city plans to support enterprise and business support activity along with delivery of Levelling Up and related Government programmes in Newcastle after April 2024, when Government funding and support for the North East Local Enterprise Partnership (LEP - the main economic development organisation in the region) is scheduled to end. The party is also calling for the Government to guarantee that continuing business support funding will not be less than the LEP’s current budget.
A Government statement by two Conservative ministers representing Northern constituencies this week confirmed that LEP functions relating to strategic economic planning, business representation, and delivery of Government regional programmes will transfer to local authorities in collaboration with mayoral combined authorities such as the existing North of Tyne or the imminent North East combined authorities.
It further suggests that the Government “will therefore provide some revenue funding to local authorities in 2024/25 to support them in delivering the functions currently delivered by the LEP”, but does not guarantee that the existing North East LEP budget will be maintained or protected.
Cllr Greg Stone, who speaks for Newcastle Liberal Democrats on business issues, has been calling for clarity on how economic strategy and business support will work under the new mayoral arrangements after May 2024, and is asking questions about how this collaboration will work under the new Devolution deal. He is challenging Newcastle City Council’s leadership to set out its intentions for how this will work in Newcastle.
Responding to the Government announcement, Cllr Stone said:
“At present there is activity behind the scenes on preparing a structure for the new mayoral combined authority but there is no public knowledge of what is planned. I am therefore calling on Newcastle Council to set out how it intends to respond to the Government statement.
“It is generally understood that the activity of the LEP will be folded into the new Mayoral Authority arrangements, but key aspects need further clarification. The mayoral Cabinet will have a duty to consult closely with a regional business board, but there is no detail about how this will work and who will sit on it. The ministerial announcement this week suggests there will be some funding for local authorities to deliver a regional economic strategy and business support activity, but it does not guarantee to maintain the LEPs existing level of financial support.
“It is unclear whether this constitutes a stealth cut by Government in support for regional economic strategy and business support which they may hope people don’t notice over the summer recess. The current LEP’s regional economic strategy is coming to an end, and there is insufficient clarity about what the region’s economic strategy will be after 2024. These are big questions which are going unasked in the Labour civil war between supporters of Jamie Driscoll and Kim McGuinness.
“I hope that councillors may hear from Newcastle Council, North of Tyne, and LEP officials in coming weeks about transitional arrangements to support economic and business growth and the delivery of regional investment. I am particularly keen to understand how Newcastle City Council’s economic development and business support functions will integrate with new regional economic structures in a way that benefits the region as a whole and safeguards the interests of Newcastle’s economy
“The council administration promised to deliver an Inclusive Economy Strategy on taking office but this has gone quiet in recent months. People and businesses in the city deserve to know current thinking on the North East’s future regional economic strategy and Newcastle’s envisaged role within this. “