Support called for SMEs from LEPs

Wednesday 3 September 2014

Local Enterprise Partnerships (LEPs) have been called upon to offer more support to small and medium-sized enterprises (SMEs) as part of plans for economic growth.

The call comes from the Federation of Small Businesses (FSB) and the Centre for Local Economic Strategies (CLES), which says that limited companies, sole traders and contracting companies should not be ignored during the economic recovery.

These LEPs, which are partnerships between local authorities and businesses, are considered by the FSB to be a great method for delivering economic growth at a local level across the country. However, it feels that the voices of SMEs are not getting great enough representation.

It released a report on the matter titled The Future of LEPs: The Small Business Perspective, which collected the views of 36 out of the 39 LEPs currently in operation. This is in addition to 131 representatives from local authorities and small businesses.

According to the investigation, 39 per cent of local authorities and 67 per cent of FSB members believe that large businesses have the greatest influence over LEPs. This is in spite of the fact that 84 per cent of jobs created in the private sector between 2010 and 2013 came from SMEs and represent 48 per cent of private sector turnover.

National Chairman for the FSB John Allan 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."

He also touched on the fact that LEPs will have £17 billion of public money to use until 2021, adding: "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 explained that growth opportunities could be maximised if LEPs consulted more effectively with SMEs, finding out what services they need and delivering them accordingly. For example, it found that 77 per cent of SMEs want to see procurement advice provided as part of a business support package, yet only 25 per cent of LEPs have plans to offer this service.

At present, there is no framework to assess the performance of LEPs. However, FSB says this needs to be implemented so that LEPs can be held accountable to businesses and their local communities, particularly considering the amount of public funding they have behind them.

What's more, only 31 per cent of LEPs publish their annual accounts, while 44 per cent release annual reports. The FSB says, with the amount of money that LEPs have available to distribute set to increase, it is vital that they make clear how this cash is being spent.

By Victoria McDonnell

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