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Although the announcement of the halt in funding for LEPs was made in the 2023 budget it only came into effect on April 1 this year. Since then central government funding has stopped but LEPs still continue to exist (government money only accounted for 10-20% of their overall funding). However, the handing over of core functions such as Growth Hub delivery to Combined and Local Authorities has been taking place and the grant funds they controlled such as Levelling Up and UK Shared Prosperity (UKSPF) are now administered at local government level. It’s interesting to see some LEPs continue to function – for example Solent is now a private company and Cheshire and Warrington have become council owned entities. However, out of the 37 original LEPs the vast majority (about 30) have transferred into some sort of local government control – effectively swallowed up as part of a wider devolution push.
What’s the situation now?
The net effect on grant funding availability should not change as those funds are just being administered by another body. However, what isn’t completely clear is how well those funds are being delivered to businesses now. Do businesses know about the changes? Are they being well signposted from LEPs to local authorities? Are applications still being processed in the same way? Are the funds getting to where they are needed and where they boost economic growth?
Early days
Whilst we don’t have any research or evidence to answer these questions either way, it will be interesting to see how the new Labour government views this transition. Will it continue to allow the transition to finish or will it make further changes to the distribution of grant funds to local SMEs, which are as yet unknown? It is clear that there are funding priorities in specific sectors e.g. life sciences, creative and financial services and also there are significant new funds being earmarked at a national level (Great British Energy) but the detail on how these will be administered and how much if any will go to local government bodies will probably become clearer in the Autumn budget.