Business calls for central role in 'new partnerships'

Business groups have warned they must play a central role in Government proposals to set up 'local enterprise partnerships', as it announces the scrapping of the existing Regional Development Agencies (RDAs).

Revealed by Deputy Prime Minister Nick Clegg, the measures would form part of a £1 billion Regional Growth Fund - available over the next three years - designed to target areas which are set to be particularly hard-hit by cuts in public sector jobs.

David Frost, director-general of the British Chambers of Commerce (BCC), warned that the fund is likely to have "significantly less resources to support business growth than previous arrangements".

"Whatever new structures emerge, it is clear that local business leaders need to play a central role in defining every area's economic future," he added.

The fund is intended to ease "the transition to private sector-led growth and prosperity" by encouraging private investment and stimulating jobs in the private sector, as disadvantaged regions attempt to pull themselves up by their boot straps through enterprise.

According to Mr Clegg, despite the cuts announced by the Government in last week's emergency Budget, the initiative will "help to foster a thriving and more balanced economy so that no region or community gets left behind". The claims came a day before the Office for Budget Responsibility predicted that the public sector is set to shed 600,000 jobs over the next six years.

In a letter to local authorities and businesses, both councils and firms are invited to put their heads together and form the partnerships, submitting proposals to the Department for Business, Innovation and Skills by 6 September.

The move comes as the Government axes the nine RDAs which were established across England by Labour in order to work with local businesses and provide regeneration around the country.

And the Confederation of British Industry (CBI) called for equality between businesses and authorities, and said that partnerships must be sure to follow a "practical, business-like agenda".

John Cridland, deputy director-general said: "The issue is not about structure, but about getting effective local bodies where business has at least 50% of the equity and a strong voice at the table."

Risk to recovery

Warning that the benefits of the growth fund are "dwarfed" by the public sector spending cuts, the TUC said that RDAs have a "proven track record of supporting regional economies".

General secretary Brendan Barber added: "Replacing them with a variety of local partnerships poses a real risk at a time when strong regional leadership is needed to meet the challenges of supporting the recovery and rebalancing our economy."

Meanwhile, the latest consumer confidence barometer from market research company GfK NOP found that the overall mood fell for the fourth month in a row.

Nick Moon, MD of GfK NOP social research, said that the increase in confidence which took place at the end of 2009 and beginning of this year had now been lost, raising the spectre of a double-dip recession.

"The ongoing debate around spending cuts and speculation around tax hikes in the lead-up to the emergency budget has done nothing to improve consumer confidence," he added.

IMAGE Jeff Moore/Empics Entertainment

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