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Cambridge Journal of Regions, Economy and Society

doi:10.1093/cjres/rsu030

Local institutions and local economic development: the


Local Enterprise Partnerships in England, 2010

AndyPike,a DavidMarlow,b AnjaMcCarthy,a PeterOBriena and


JohnTomaneyc
a
Centre for Urban and Regional Development Studies, Newcastle University, Newcastle upon
Tyne, NE1 7RU, UK, andy.pike@ncl.ac.uk, a.s.mccarthy@ncl.ac.uk, peter.obrien@ncl.ac.uk
b
Third Life Economics, Orion House Barn Hill, Stamford, Cambridgeshire PE9 2AE, UK,

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davidmarlow@thirdlifeeconomics.co.uk
c
The Bartlett School of Planning, University College London Faculty of the Built Environment,
Central House, 14 Upper Woburn Place, London WC1H 0NN, UK, j.tomaney@ucl.ac.uk

Received on March 21, 2014; accepted on November 5, 2014

This paper examines the roles of local institutions in economic development at the local
level. Drawing upon comparative analysis of the 39 local enterprise partnerships emergent
in England since 2010, it demonstrates: how local economic development institutions work
within multi-agent and multi-scalar institutional settings; the ways institutional genealogy
shapes processes of layering and recombining as well as dismantling and improvising in
episodes of institutional change and the analytical themes able to explore the roles and
functions of institutions in local economic development.

Keywords: local, institutions, economic development, local enterprise partnerships, England


JEL Classifications: H70, O10, O20, R58

Introduction economic development in specific spatial set-


tings; and, the causes and impacts of the disrup-
Growing recognition of the role of institutions
tion, instability and restructuring of institutions
in economic development is animating research
over space and time. Within the broader work on
interest across social science disciplines. Many
institutions, the aim here is to better understand
advances have been made but significant issues
the roles of institutions in economic develop-
require further work. In relation to economic
ment at the local level. The local scale provides
development at different spatial scales, impor-
a fruitful lens to elaborate how institutions seek
tant questions remain concerning: the defini-
to structure and shape the agency and relation-
tions of institutions and their manifestations and
ships of economic actors, to examine the role of
configurations in different geographical con-
extra-local relations and processes in establish-
texts; the existence, degree, direction and char-
ing and conditioning how institutions operate,
acter of causal linkages between institutions and

The Author 2015. Published by Oxford University Press on behalf of the Cambridge Political Economy Society.
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Pike etal.

and to explore how institutions adapt and cope Robinson, 2012; Farole et al., 2011; Gertler,
with change, disruption and uncertainty. 2010; Helpman, 2004; Hodgson, 2007; Martin,
Drawing upon comparative analysis of the 2000; Rodrguez-Pose, 2013; Rodrik, 2003;
39 new Local Enterprise Partnerships (LEPs) Streeck and Thelen, 2005). Despite the
established for economic development in increased attention, institutions remain poorly
England since 2010, the argument derives understood and under-appreciated in specific
insights from the interplay between concepts, disciplinary domains relevant to economic
theory and empirics (Sunley, 2008). It does not development at specific spatial levels and in
seek to provide just another individual and particular geographical contexts. This gap has
isolated case study of a particular institution been acknowledged in economic geography
in a specific geographical and temporal con- (Amin, 1999; Cumbers et al., 2003; Gertler,
text. Instead, responding to calls for stronger 2010; Martin, 2000; Peck, 1998; Wood and
comparative methods (Barnes et al., 2007), Valler, 2001) and human geography (Farole

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the approach aims to learn conceptually and et al., 2011; Tomaney, 2014). Much insight
theoretically from systematic analysis of the has been generated by ongoing research but
changing institutional architecture for eco- important questions remain. Issues include,
nomic development within and between mul- first, clarifying and operationalising the defini-
tiple local areas in a single national context. tions of institutions and how they are manifest
The specific contributions are, first, explaining and configured in different spatial settings. An
the importance and ways in which local eco- important distinction identifies formal, hard
nomic development institutions are situated and codified institutions and informal, soft
and work within multi-agent and multi-scalar and uncodified institutions (Rodrguez-Pose,
institutional settings. Second, demonstrating 2013, Table1). In local economic development,
how institutional genealogy shapes processes formal institutions encompass the system of
of layering and recombining as well as disman- government and governance in a particu-
tling and improvising in episodes restructuring lar nation-state and informal institutions
the institutional landscape for local economic include the traditions of co-operative work-
development. Last, identifying analytical ing between public and private sectors. These
themes to illuminate understanding of the dif- formal and informal institutions interact. Both
ferent roles and functions of institutions in eco- are produced by actors and condition and
nomic development at the local level. regulate their agency. Such socially produced
structures influence rather than determine
attitudes, behaviours and decision-making in
Local institutions and local ways that impart stability and predictability,
economic development and enable their (re)production over time and
Recognition and interest in the role of insti- space (Gertler, 2010). Specific manifestations
tutions in economic development have risen and configurations of formal and informal
in the last decade. Across disciplines includ- institutions are assembled through the agency
ing economics, economic sociology, economic of actors working in and with already exist-
geography and political science, work has ing institutional structures in different spatial
demonstrated how institutions shape the settings. Such locally distinctive institutional
behaviour of economic actors and their inter- architectures (Gertler, 2010, 2) are critically
relationships, and are integral to the economy important to understanding their role in local
through influencing processes of produc- economic development. For analysis, Martin
tion, circulation, exchange, consumption and (2000, 7980) distinguishes two parts of the
regulation (see, for example, Acemoglu and institutional regime:

Page 2 of 20
Local institutions

Table1. Formal and informal institutions in local economic development.


Type of institution Formal Informal

Form Hard, codified, written Soft, tacit, unwritten


Generic examples Charters, constitutions, contracts, laws, Attitudes, codes, conventions, customs,
regulations, rights, requirements, experiences, habits, networks, norms,
regulations, rules and statutes routines, traditions and values
Local economic development Decentralisation of economic High levels of trust between local actors
examples evelopment powers, responsibilities
d facilitating knowledge exchange and
and resources to a local agency; local innovation; strong social capital bonding
content and sourcing regulations in local actors into existing patterns of
public procurement contracts; behaviour; relational social networks
compulsory purchase powers for land connecting local actors to extra-local

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acquisition and ownership sources of growth and innovation

Source: Authors research.

The institutional environment [that] refers But they typically constitute one set of influences
to both the systems of informal conventions, amongst many making it difficult to determine
customs, norms, and social routinesand the their precise causal roles and their extent and
formalstructures of rules, regulations nature (Gertler, 2010). Establishing the direction
which constrain and control socioeconomic of causation is beset by problems of endogene-
behaviour[and the] institutional arrange- ity because the relationship between actors and
mentsused to denote the particular organi- structures is recursive; institutions shape and reg-
sational formswhich arise as a consequence ulate and, in turn, are shaped and regulated by the
of, and whose constitution and operation are agency of economic actors (Farole et al., 2011).
governed by, the institutional environment. The quantitative degree of causal linkages ranges
from strong to weak effects and high to low mag-
Within particular variegations of capitalism nitudes (Beugelsdijk and van Schaik, 2005). The
(Peck and Theodore, 2007), how the institu- qualitative nature of institutional influence is
tional environment and arrangements interact diverse, imbuing economic development in differ-
and shape economic behaviours and outcomes ent geographical contexts with varied characteris-
across and between different spatial levels and tics including high or low quality, (in)equality and
in particular geographical contexts requires (un)sustainability (Cumbers etal., 2003).
further examination. Last, the ways in institutional environments and
Second, the causal linkages and interactions arrangements change and shape the evolution-
between institutions and economic develop- ary paths of economies over time and space and
ment at different geographical scales remain how economies influence institutions are under-
unresolved. Whether they exist, their extent researched (Tomaney, 2013). Specifically, little is
and nature, and in what directions they oper- known about how and why institutional architec-
ate are unclear: once basic formal institutions tures or regimes cohere during periods of stabil-
are in place, the relationship between institu- ity and fixity. Institutional change, disruption and
tions and economic outcomes becomes much instability raise only partially answered questions
more complex, fuzzy and difficult to isolate too. What are the exogenous and/or endogenous
(Rodrguez-Pose, 2013, 1038). Institutions per- sources that generate change (Gertler, 2010)?
vade the relations and processes of economic How and by whom is institutional restructuring
development across and between spatial levels. affected and what are its implications? Work has

Page 3 of 20
Pike etal.

only begun to address how processes of layering,


conversion and recombination shape emergent
and new institutional regimes (Martin, 2010;
Streeck and Thelen, 2005).
Engaging the multi-disciplinary institutional-
ist project, this paper articulates three specific
contributions. First, a central and longstand-
ing concern is understanding how and where
institutions interact in (re)producing particular
institutional configurations and distinctive prac-
tices in different geographical settings at differ-
ent spatial scales (Gertler, 2010; Peck, 1996).
Analyses have often relied on economy-wide

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quantitative studies at the macro level and not Figure 1. Decentralisation of powers and resources
yet explained in a satisfactory way which insti- between the central and local levels.
tutions matter, when they matter, and precisely Source: Adapted from Pike (2010).
how they shape growth (Farole etal., 2011, 59,
emphasis in original). Building upon the gov- Second, emphasising how and where insti-
ernance geographies of institution building and tutions shape the trajectories of local econo-
institutionalisation (Haughton etal., 1997; Peck, mies over time (Gertler, 2010), the focus here
1998), understanding is sought about the role of is on periods of substantive change in institu-
institutions in local economic development and tional architectures. Restructuring institutional
their inter-relations with institutions at other environments and/or arrangements unleashes
geographical levels. Focusing upon inter-scalar episodes of uncertainty, fluidity and experimen-
relations, this approach seeks a more finely tation. Understanding shifting institutional land-
grained appreciation of the geography of insti- scapes requires historical sensitivity to change
tutional variation (Gertler, 2010, 5). Evident in and continuity as well as the legacies and ways
different shapes and sizes (Pike et al., 2012c), in which previous paths, approaches and prac-
the extent and nature of decentralisation within tices prefigure and condition the changed and
government and governance systems play deci- emergent structures (Jones, 1999). Institutional
sive parts in explaining the role of institutions genealogies are necessary to uncover the line-
in economic development at specific geograph- age of institutions and their inter-relations over
ical levels within multi-agent and multi-scalar time and space. Building upon and elaborating
institutional settings. Between the centre and Davids (1994, 205) notion of institutions as
local levels, powers can be reserved, shared or carriers of history shaping path dependen-
decentralised and resources can be centrally cies, the importance of micro-level processes
controlled, negotiated or subject to local dis- has been demonstrated: (i) layering (gradual
cretion (Figure1). The particular configuration and cumulative addition of new rules, proce-
in specific national contexts shapes the institu- dures and/or structures to existing institutions);
tional environment and arrangements within (ii) conversion (reorientation of institutional
which economic development at the local level form and/or function through addition of new
is pursued and by whom. Relative autonomy or modification of existing rules, procedures
makes the agency of local actors integral and and practices) and (iii) recombination (rea-
means institutional outcomes cannot be read- malgamation of existing and/or new resources
off in a deterministic and top-down way from and properties to produce new institutions
institutional structures (Gertler, 2010). and/or roles, functions and practices) over

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Local institutions

time in places (Martin, 2010, 1415; see also and encompassing the local level. Synthesising
Peck and Theodore, 2007; Streeck and Thelen, the academic and policy literature (for example,
2005). Two further processes can be identified. Acemoglu and Robinson, 2012; OECD, 2012;
Dismantling is where institutional arrange- Rodrik, 2003), a range of analytical themes can
ments are abolished, closed down and removed be extracted to provide a framework for under-
from the landscape. Often focused on national standing and explaining the roles and functions
level welfare state reform (Streeck and Thelen, of institutions in local economic development.
2005), this process involves substantial efforts, Reducing uncertainty for local actors, institu-
time, resources and (un)foreseen costs and ben- tions undertake important work in: diagnos-
efits that create legacies which pattern the evo- ing local economic development circumstances
lution of institutional architectures. Drawing and issues; leading actors in deliberation and
upon ideas of bricolage and unstructured social selection of priorities; formulating develop-
agency (Garud etal., 2009), improvising is where ment strategies appropriate to local contexts

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new institutional entities are introduced and and situations; generating, pooling and aligning
actors encouraged and/or compelled to inter- resources and investments; and, evaluating the
pret and define their aim, purpose and function impact of interventions. Within multi-actor and
within the changed (and often still changing) multi-level systems of government and govern-
institutional environments and arrangements ance, institutions provide a local voice verti-
of shifting national political-economic contexts, cally in dealing with supranational, national
policy frameworks and resource allocations. and regional structures and horizontally in co-
Such complex processeslayering, converting, ordinating and mobilising other local actors in
recombining, dismantling and improvising the public, private and civic sectors. These ana-
raise yet further questions about how to disen- lytical themes provide a starting point. They are
tangle and explain institutional operation and not exhaustive of all the potential roles of insti-
effects in geographical contexts. tutions in local economic development and will
Third, institutionalist approaches to eco- blur and overlap.
nomic development have expressed disquiet With the aim of better understanding the role
about methods, research designs and compara- of local institutions in local economic develop-
tive analysis (Barnes etal., 2007; Gertler, 2010; ment, the empirical analysis is focused upon
Peck and Theodore, 2007). Work in economic the 39 LEPs established for economic develop-
geography has been strong on explaining and ment in England since 2010. England provides
documenting complexity, context and differ- an appropriate case as a constituent territory of
ence but weaker in specifying more general- the asymmetrically devolved union-state of the
ised analytical and explanatory frameworks UK with highly centralised governance, per-
applicable to different geographical contexts sistent and relatively high levels of spatial dis-
internationally, identifying consistent and com- parities in economic and social conditions and
parable conceptual and analytical categories, a long history of ongoing change in economic
analysing larger empirical samples, and sys- development policy and institutions (Pike and
tematising and generalising its findings (Farole Tomaney, 2009; Pike et al., 2012a). Extending
et al., 2011, 60). Balance is needed between our understanding from existing research on
identifying generalisable analytical themes individual or groups of LEPs (see, for example,
capable of distilling, comparing and explaining Bentley et al., 2010), the research undertook
common features and experiences and develop- the first comparative national study of all 39
ing the capability to interrogate the variegation LEPs across England. Informed by the ana-
and particularity of institutional architectures lytical themes above, the survey addressed the
for economic development both constituting roles the new and emergent LEPs were seeking

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Pike etal.

to interpret and perform by gathering and ana- and centralisation (Pike and Tomaney, 2009).
lysing information on their strategies and pri- Reflecting a history of compulsive re-organ-
orities, organisation and governance, resources, isation (Jones, 2010, 374) and perpetual
effectiveness and working relations, innova- restructuring (Mulgan, 2010, 1), repeated insti-
tions, lessons learned, capacity building issues, tutional experiments have tried to address the
future barriers and challenges. The comparative missing middle (Shaw and Greenhalgh, 2010,
methodology and research design were based 457) between central and local government
on: (i) semi-structured in-depth interviews with in economic development. Building on the
the lead actors the chairs and/or chief/senior regional planning system established in the late
officers in all 39 LEPs (100% response rate; 1940s, this process resembles a pendulum in the
13 (33%) conducted face-to-face) undertaken post-war period swinging between the regional
between December 2012 and February 2013; (early 1960s), local (c. 19791994), regional
(ii) review of secondary sources (for example, (19972010) and local (2010) scales. As a par-

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LEP websites, The LEP Network reports, gov- ticular local institutional fix, LEPs emerged as
ernment documents and independent studies part of the Conservative and Liberal Democrat
including BIS (2010), Odgers Berndtson (2012) Coalitions Programme for Government agreed
and Walker (2013); (iii) a follow-up exercise to in 2010. In the wake of the global financial cri-
gather additional data on finances and staff- sis and economic downturn, coalition strategy
ing and (iv) a practitioner workshop to test the embodied the austerity or consolidation state
emergent findings (March 2013). (Schfer and Streeck, 2013, 9)prioritising defi-
cit reduction mainly through public expenditure
cuts and institutional rationalisation. Economic
The LEPs in England,2010 development policy focused on recovery and
Several years on from the proposal sent by the UK underpinned a local growth agenda, aimed at
Governments Secretaries of State for Business, realising every places potential (BIS, 2010, 1),
Innovation and Skills (BIS) and Communities and shaped by aspirations of sectoral and spa-
and Local Government (CLG) to invite local tial rebalancing, decentralisation and localism
groups of councils and business leaders to come (Clarke and Cochrane, 2013; Pike etal., 2012a).
together to consider how you wish to form local Central government articulated a critique of
enterprise partnerships in order to work with the previous episode of regionally based institu-
the Government to help strengthen local econo- tional architecture for economic development
mies (Cable and Pickles, 2010), another new based on its regional level centralism, bureaucracy,
landscape of economic development governance mismatch with functional economic areas, overly
has emerged in England. Since 2010, 39 new LEPs broad aims and objectives, failure to close the gap
were eventually established and recognised by in economic growth rates between regions, over-
central government in the wake of the dismantling resourcing, over-staffing, lack of regional and local
of the eight sets of regional level arrangements accountability, and limited effectiveness (BIS,
outside London and the transfer of the London 2010; Pike etal., 2012b). To make way for the new
Development Agency to the Greater London local focus, the regional institutional arrangements
Authority (Pike etal., 2012a, 2012b, Figure2). of government offices, regional development
agencies, regional chambers and other regional
entities were rapidly abolished (Sandford, 2013).
Institutional genealogy: the origins and Region, regionalism and regionalisation were
emergence of the 39 LEPs in England removed from the lexicon of sub-national eco-
Economic development governance in England nomic development in England. This process of
is marked by entrenched spatial disparities institutional dismantling embroiled the new LEPs

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Local institutions

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Figure2. LEPs, 2013.
Source: Crown Copyright.

in the complex and messy activities involved in pace of change has been rapid since 2010: mov-
winding-up the Regional Development Agencies ing from start-up, embryonic organisations to
(RDAs), transferring their assets and liabilities, bidders and delivery managers for substantial
(re)negotiating contractual commitments, staff national and EU funding initiatives to stra-
redeployments and redundancies, and archiving tegic leaders of their LEP area economies.
and managing regional knowledge bases (BIS, LEPs expressed concerns that this unplanned
2012; Pike etal., 2012b). and accelerated trajectory has precluded their
This particular political-economic context organic evolution as institutions. The absence
for local economic development in England of an England-wide vision and plan has gener-
imparted distinctive legacies that shaped the ated instability and uncertainty for the emer-
emergent institutional landscape for the LEPs. gent local institutions, acknowledged by the
First, the coalitions version of decentralisation national minister: [G]etting rid of the RDAs
and localism meant no longer term vision and and bringing in LEPs has perhaps been a little
plan for LEPs was set out by central govern- Maoist and chaotic (Vince Cable, Secretary of
ment. Instead, local discretion, initiative and State for BIS, quoted in Stratton, 2010, 1).
innovation were emphasised. The emergence Second, marked unevenness was evident
of LEPs consequently reveals a cluttered and across the 39 LEPs in the speed at which
fragmented path of institutional evolution. The they were agreed with national government,

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Pike etal.

established and became operational. Reflecting dismantling and conversion, lack of long-term
processes of dismantling, improvising, layering vision and plan and exhortations of localist
and recombining, the LEPs building-up from agency that have shaped the extent, nature and
and adapting existing (sub-)regional partner- pace of emergence of LEPs as local institutions
ships were relatively quicker off the mark. Such for local economic development in England.
sub-regional partnerships either pre-dated
and/or were deployed as part of the now dis-
mantled regional structures. LEPs working Local institutional agency in multi-agent
in new geographies with new local partners and multi-scalar institutional settings:
faced lengthy improvisation to find their feet. centralism, localism and theLEPs
While national government later articulated Given their relatively limited resources and
more centralised versions of guided localism emergence in a fragmented and evolving land-
(Eric Pickles, CLG Secretary of State, quoted scape of economic development governance

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in Illman, 2010, 1), the initial period reflected a with multiple agents active at different geo-
localist vanguard and deliberate lack of central graphical levels (Table2), working relationships
guidance. As new institutional arrangements with relevant partners in the public, private and
in an emergent, evolving and localist context, civic sectors were critical to LEP establish-
each of the 39 LEPs had to travel down its own ment. One LEP described this as partnership
particular road of determining what they were capital (Authors interview, 2013). From the
for and how they were going to add value to outset, LEPs were focused upon trying to inter-
local economic development amongst the pub- pret the shifting landscape, identify and craft
lic, private and civic actors in the LEP area as their role. Negotiating the uneasy relationships
well as organisational development and resolv- between shifting forms of centralism and local-
ing basic issues of resources, staffing, structures, ism since 2010, LEPs have sought to provide
governance, identity and brand, and premises. the lead, mobilising actors horizontally at the
Last, in the dismantling and conversion of the local level and establishing relations vertically
institutional architecture for economic develop- to the national level. In centrelocal relations,
ment from the regional to the local level, the many LEPs welcomed the direct connections to
regional institutional arrangements were abol- central government departments and officials.
ished and replacedat least on paper and in This channel was considered more effective
rhetoricby a looser localism. Rejecting the than having to engage with and work through
preceding legacy as regional centralism, local the previous regional institutional tier. Central
institutional agency has been strongly encour- government civil servants continue to struggle
aged by central government. For the embryonic to find effective ways to deal with all 39 LEPs.
LEPs with limited capacity and resources, this Marked unevenness was evident. Some LEPs
has meant improvisation. In the early stages of were establishing strong relationships with min-
their evolution, the LEPs have had to engage in isters and officials, ensuring their localist behav-
intensive learning by doing, negotiating a com- iours were in tune with central government
plex, uncertain and rapidly unfolding policy and agendas. Relations between LEPs and other
funding landscape. Further complications have institutions centralised following the wdis-
arisen in the mixed and conflicting messages mantling of the RDAs such as the Technology
LEPs receive from different central government Strategy Board and UK Trade and Investment
departments and ministers. Institutional geneal- were patchy. Only some LEPs had agreed for-
ogy reveals the inherited legacies of repeated mal co-operation agreements. Amidst central
experimentation, changing national political- government encouragement of competition
economic projects and priorities, institutional between LEPs, uneven centrelocal relations

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Local institutions

Table2. Main organisations involved in local economic development in LEP areas in England.
Level England

Central government National Government Departments (for example, BIS, CLG, DEFRA, DECC, DfT,
HMT)
Sub-national offices of central government departments (for example, BIS local, CLG
RGF/ERDF local teams)
Central government functional agencies (for example, HCA, HEFCE, Highways Agency,
TSB, UKTI)
Local government Local authorities
Local authority groups (for example, combined authorities, joint committees)
Local authority associations
Development agencies Local development agencies

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Local enterprise agencies
Regeneration partnerships
Special purpose vehicles
Local asset-backed vehicles
Training and skills Skills funding agency
National apprenticeship service
Jobcentre plus
Employers (employer ownership of skills project)
Work programme providers
Higher education Universities
Further education Skills funding agency
Colleges
Trades unions Regional TUCs
Private sector Individual business people
Business associations (for example, Chambers of Commerce, CBI, EEFs)
Private sector service providers (for example, economic development, planning, training)
Industry groups (for example, energy, manufacturing, construction and infrastructure)
Civic sector Community associations, voluntary groups, trusts, co-operatives, etc.

Source: Authors research.


Note: DEFRA, Department of Environment, Food and Rural Affairs; DECC, Department of Energy and Climate Change;
DfT, Department for Transport; HMT, Her Majestys Treasury; TSB, Technology Strategy Board; UKTI, UK Trade and
Industry; HCA, Homes and Communities Agency; HEFCE, Higher Education Funding Council for England and Wales;
TUC, Trades Union Congress; CBI, Confederation of British Industry; EEF, Engineering Employers Federation.

have meant a cadre of more capable LEPs pull- (Walker, 2013). Several emergent types can be
ing ahead of the rest in developing their contact discerned. First, LEPs that are explicitly a sub-set
networks and deal-making skills with central of mayoral and combined authority governance
government in building capacity and influence arrangements (for example, London, Greater
over economic development in their localareas. Manchester, Leeds, North East and Sheffield).
Relations between LEPs and their respective Where the LEP is absorbed into existing struc-
BIS localsthe sub-national structures of the tures, it is deemed to have greater accountability
central government department BISwere pos- and legitimacy. Second, several LEPs are operat-
itive. Supportive relations were established even ing as de facto business-led, arms-length organi-
as the BIS local teams dealt with the layering of sations of the local authority Leaders board. Last
enlarged institutional geographies and reduced are LEPs that are still finding their way and are
staff and resources following the abolition of currently sitting alongside often newly formed
regions. LEP and constituent local authority rela- local authority leadership structures. Such
tions were pivotal to their roles and effectiveness LEP arrangements are marked by institutional

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Pike etal.

histories and remain fluid as the local growth and example, combined authority, Greater London
cities agendas continue to evolve. Authority/Mayor). Almost all LEPs have either
As purportedly business-led organisations, a single or set of multiple local authorities as the
LEP interactions with local business parallel accountable body for the stewardship of public
their critical relations with local authorities. money. The modi operandi of the LEPs is evident
Shaped by their particular local genesis and through a range of organisational structures and
legacies of the regional era, in some LEPs, the practices: local authority leaders boards; board
Chamber of Commerce played an integral role leads (public and private); standing sub-groups;
and, in specific cases, is even providing the LEP Task and Finish groups; delivery partners and
secretariat. Elsewhere, as some LEPs seek to business membership body support arrange-
enrol businesses as subscribing members, this ments. LEP board size varies from over 40 for the
risks putting them into competition with busi- South East LEP to under 10 in Worcestershire
ness associations. Several LEPs explicitly claim (Figure 3). Although Government specified at

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to be the local business voice whilst most seek least 50% of LEP boards to be private sector, the
to be either a voice for business or a media- distribution of public and private representatives
tor of business voices. Securing and sustaining varies geographically too. In Northamptonshire
business engagement are challenging for LEPs LEP, 73% of the board is from the private sec-
given their lesser size, resources and clout com- tor, whereas in the west of England LEP, 60%
pared to RDAs. Numerous LEPs have already of the board is from the public sector. In terms
experienced turnover in their business board of board representativeness for the populations
members and chairs as terms of office end. within their areas, a crude measure of board rep-
Asubstantial number of LEPs have begun con- resentatives per capita for the LEP areas ranges
sidering joint cross-boundary working and even from over 1:700,000 in London and 1:200,000 in
merging operations. Whilst some local authori- D2N2 and Greater Manchester to under 1:50,000
ties, such as the City of York, have looked to in over a quarter ofLEPs.
cement their membership in one LEP (Leeds Organisation and governance remain unset-
city region) rather than be members of two tled for LEPs. Unease concerns accountability
LEPs (Leeds city region and North and East and culture. To whom is the LEP accountable?
Yorkshire) given their overlapping geographies. The LEP survey revealed several possibili-
How institutions are organised and governed ties: genuinely not knowing; a local authority
is integral to their capability, role and contribu- Leaders board (or, in London, the Mayor);
tion to local economic development. In common business (however defined); and, central gov-
with strategy and priorities, whilst there is no ernment and the Secretaries of State in BIS and/
single or universal LEP organisation and govern- or CLG. Such uncertainty masks fundamental
ance model, there are not 39 different variants. questions. What is the LEP? Is it the board? Is
In the evolving context, all LEPs are reviewing it the organisations represented on the board?
second- or even third-generation arrangements Is it a loose local coalition of public, private and
in the light of central governments response to third sector actors with contributions to make
Lord Heseltines (2013) Growth Review and to local economic development? In their shift-
the Comprehensive Spending Review 2013. ing versions of centralism and localism, central
Different legal forms are being utilised across government lacks clarity in its normative expec-
the LEPs: incorporation with single (for exam- tations of what LEPs should be in order to
ple, local authority) or multiple shareholders; assume enhanced responsibilities and resources.
unincorporated voluntary partnerships and part The current conjuncture is a long way from the
of broader local authority or city region/may- voluntarist invitation from the Secretaries of
oral strategic governance arrangements (for State at BIS and CLG in 2010. On culture, LEPs

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Local institutions

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Figure3. Board size and membership by LEP area, 2013.
Source: Authors survey.

were struggling to retain their agility, flexibility prosperous LEP areas have tried to establish
and entrepreneurialism in the face of what they the conditions for local growth, assembling land,
term creeping bureaucratisation arising from premises, infrastructure and skills.
the widening and increasing level of responsibil- Shaped by their particular genesis and charac-
ities and resources envisaged by central govern- ter, four broad strategy types were evident across
ment for the LEPs (Authors interview, 2013). the 39 LEPs focused: (i) on the LEP area as an
Echoing the regional era, the evolving roles and economic geography; (ii) on the LEP as an insti-
functions for the LEPs are mirroring the mis- tution; (iii) on rolling forward an existing strategy
sion creep of unintentional expansion beyond and (iv) on a new formulation exercise. Reflecting
their original legislative purpose experienced the legacies of regional dismantling, half of the
by the RDAs (Pike etal., 2012b). LEPs inherited their initial strategies from pre-
Leading in devising and formulating strategy vious area-based economic development strate-
and deciding upon priorities and future paths in gies framed by a RDA sub-regional partnership
concert with relevant actors from the public, pri- or local authority Local Economic Assessment.
vate and civic spheres are critical to institutional Any new strategies were commissioned exter-
roles in local economic development. Diversity nally or pulled together by an executive or sub-
in economic conditions and potential shaped group then further developed through the EU
LEP strategy setting and prioritising activi- Structural Investment Framework and Strategic
ties. Wide disparities exist between the LEP Economic Plan processes informed by central
areas in their Gross Value Added (GVA) per government guidance. Despite central govern-
head (Figure 4). More prosperous LEP areas ments What Works policy development agenda
have sought to address the qualitative nature (Cabinet Office, 2013), collation and analysis of
of local growth, prioritising target sectors and evidence bases, formulation and consultation
providing infrastructure to sustain growth. Less were inconsistent. Substantive numbers of LEPs

Page 11 of 20
Pike etal.

were active in engaging key local actors in devel- of impact and value for money should be dem-
oping and owning local strategies and priorities. onstrated. With increased responsibilities and
Institutional dismantling and layering meant the funding, LEPs were seeking enhanced account-
new geographies of LEP areas devalued the exist- ability, transparency and the ability to demon-
ing regional and city-regional evidencebases. strate added value (House of Commons BIS
In terms of strategic prioritisation, LEPs Select Committee, 2013). The early picture was
adopted a sector-focus at a range of levels (for mixed across the 39 LEPs. A few had devel-
example, food processing, advanced manufactur- oped performance management frameworks,
ing, renewables), a thematic focus (for example, several had published annual progress reviews
skills, inward investment, infrastructure, con- and others have identified measures of success
nectivity) or a mix of both. When strategy was and progress in programme and project deliv-
focused on the LEP as an organisation, promi- erables and outcomes. In the governments
nent activities (for example, enterprise zones centralised form of localism, all 39 LEPs were

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(EZs)) or support for specific projects was having to revisit their initial strategic and prior-
emphasised. Reflecting improvisation in a local- itisation exercises to meet the frameworks set
ist context, differentiation in LEP roles was evi- by central government in Strategic Economic
dent between strategic leader, business voice, Plans and Local Growth Deals.
programme commissioner and/or fixer and hon- Generating, pooling and directing resources
est broker. Priorities were articulated in different are central to the capability and capacity of
ways by the LEPs with some aggregation into institutions to influence economic development
programmes and some split into discrete projects. at the local level. In common with other multi-
In contrast to the preceding regional era, no agent and multi-level governance systems in
common performance management framework advanced economies (McLean et al., 2003), it
has been established for the LEPs. Emphasising is difficult and complex to identify sub-national
a particular localism, central government resources. Multiple, varied and fluid sources of
explicitly did not set targets against which LEP finance were evident at the local level that varied
performance could be evaluated. But an expec- greatly in their magnitude and disclosure across
tation was clear that HM Treasury conceptions the LEPs. As one LEP respondent put it The
35,000
Thames Valley
Berkshire
30,000

25,000
GVA per capita ()

20,000

15,000
Cornwall & the Isles
of Scilly
10,000

5000

0
0 5 10 15 20 25 30 35 40

Figure4. GVA per head by LEP area, 2011.


Source: Office for National Statistics and the LEP Network Annual Review of LEP Economies 2013.

Page 12 of 20
Local institutions

situation changes everyday (Authors interview, The second category is core-varied allocation
2013). Key distinctions are, first, between funds where specified formulae were used and each
allocated to the LEPs by central government LEP received different amounts of funding.
and funds generated by the LEPs from sources The Growing Places Fund (GPF) was allocated
other than central government. Second are the on a formula based on population density and
different forms in which financial resources employed earnings (employment multiplied
are provided, for example as cash with certain by earnings, DfT and CLG, 2011). Analysing the
spending conditions or in-kind support from a geographical distribution of the GPF demon-
seconded individual or organisation. Third is the strates that LEP areas with stronger economic
issue of measuring the value of the pro-bono performance received relatively more of the pub-
publico and voluntary contributions made to the lic funding (Figure5). This allocation mechanism
LEPs, for instance by the private sector chair, is an innovation in spatial economic policy terms.
board members and other local institutions. It does not aim to redistribute public resources

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Reflecting improvisation and layering at the from richer to poorer areas. Instead, in the con-
national level, central government is using four text of the austerity state, recession and faltering
categories of approaches and mechanisms to economic recovery in the UK, it explicitly focuses
allocate resources to LEPs. First is core-uniform resources on areas with the greatest potential
allocation of amounts to each LEP from BIS for immediate economic growthhelping the
to meet operational costs and prepare strate- strongest first (The Economist, 2011,1).
gies. The LEP Capacity Fund totalled 4 mil- The third category is competitive-general
lion, whilst the LEP Start-Up Fund provided allocation where funds from specific initiatives
5 million disbursed on the basis of competi- are allocated to successful LEPs following a
tive bids and match funding. More recently, the competitive bidding process. The amounts dis-
LEPs shared a further 5 million for executive bursed vary and the LEP retains some flexibility
support and, subject to match funding, an addi- in how the funds are deployed. In this way, 11 of
tional 250,000 each in 20132014 and 2014 the 25 new EZs were allocated. The competitive
2015. Although the LEPs are diverse in size and allocation mechanism aimed to encourage local
capability, this resource was distributed equally. innovation, stimulate creative ideas and reward

35,000

30,000 Thames Valley Berkshire

25,000
GVA per head ()

20,000
York & North Yorkshire
15,000

10,000

5000

0
0 2 4 6 8 10 12 14 16 18 20
GPF per head ()

Figure5. GPF allocations by GVA per capita of LEP area, 2011.


Source: Authors calculations from CLG data.

Page 13 of 20
Pike etal.

the best bids. The results created winners and Although not restricted to LEPs, in line with
losers in a geographically uneven map of pub- its aims, the geographical distribution of RGF
lic resource allocation. Reflecting the impro- demonstrates a slant towards less prosperous
visational and incremental nature of central LEP areas and those with relatively high public
government policy, however, of the 39 LEPs, 11 sector employment (Figure 6). Significantly, the
(28%) were awarded a first wave EZ without competitive principle was identified as the pre-
any formal competition. In total, 26 (67%) bids ferred mechanism for resource allocation in the
were submitted for a second wave EZ, and 13 Heseltine Growth Review (2013) incorporated
(50%) were successful (SQW, 2011). The map into the local growth fund bids from eachLEP.
of EZs displays a geographically dispersed pat- In generating, pooling and directing
tern. The first wave of EZs was mostly awarded resources by the LEPs, a range of different
to LEPs in the north and the midlands, whilst forms was evident. First, LEPs were drawing
the second wave of EZs went predominantly upon financial contributions from their con-

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to LEPs in the south. This geography reflected stituent local authorities often with specified
central governments rebalancing agenda and conditions imposed on their use. Second, LEPs
desire to spread funding around the country. were receiving contributions from private sec-
This map in turn has uneven implications for tor business within their areas, either through
the resources available to LEPs in terms of a subscription and/or membership-type model.
potential but uncertain future revenue streams. Third, beyond direct financial contributions,
The last category is competitive-specific allo- staff secondments from local partners such
cation using a competitive bidding mechanism. as local authorities, other public agencies and
The amounts vary by LEP and the funding has Chambers of Commerce were widely in use.
tighter conditions for its specific use.The Regional Fourth, in-kind supportsuch as administra-
Growth Fund (RGF) is allocated on this basis. tion and premiseswere provided by local
It too created local winners and some LEPs partners including further and higher educa-
deciding not to bid often due to limited capacity. tion institutions. Last, contributions were made

West of England 37.38


Humber 32.68
Coventry & Warwickshire 28.26
Greater Manchester 24.2
North East 15.52
Tees Valley 15.08
Sheffield City Region 14.4
Greater birmingham & Solihull 10.27
Cumbria 10
Leicestershire 8.16
Leeds City Region 6.77
Liverpool City Region 6.64
Solent 3.23
D2n2 2.37
New Anglia 1.89
Northamptonshire 1.73

RGF per Capita ()

Figure6. RGF () awarded to LEPs (rounds 13) by per capita*.


Note: *Analysis of BIS data on RGF Bids awarded to LEPs in rounds 13.
Source: BIS data and authors own estimates.

Page 14 of 20
Local institutions

on a pro-bono publico basis from further and/or relatively better endowed LEPs have an EZ, RGF
higher education institutions and through vol- and other programme funding, some independent
unteering by public, private and civic actors. In sources of local revenue in addition to govern-
the context of the austerity state, the self-help ment core funding streams and GPF allocations.
and internal generation of resources by and for In summary, the combination of central govern-
the LEPs is an element of central governments ment allocations and internally generated sources
longer term vision, aligning with international can amount to an estimated footprint of well over
aspirations toward the self-financing of local 10 million per annum for 20132014 to 2015
and regional economic development institu- 2016. Less well-endowed LEPs are restricted
tions (Bellini etal., 2012). effectively to government core and GPF sources.
Given the complexities and difficulties involved Figure 7 illustrates the level of resources LEPs
in identifying and accessing the central govern- appear to have available directly to allocate or
ment allocation mechanisms and the generation indirectly to influence on the basis of their growth

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of resources by the LEPs, the analysis can only and European funding strategies. The geographi-
provide a partial picture of the estimated financial cal distribution is tilted toward the economically
resources amongst a sub-set of the 39 LEPs. The weaker LEP areas and core city-regions.
Cornwall & The Isles of Scilly
North East
Greater Manchester
Leeds City Region
Greater birmingham & Solihull
Lancashire
Derby, Derbyshire, Nottingham & Nottinghamshire
Sheffield City Region
Liverpool City Region
South East
Tees Valley
Black Country
Coventry & Warwickshire
Stoke on Trent & Staffordshire
Cheshire & Warrington
Leicester & Leicestershire
Humber
Greater Lincolnshire
Heart of the South West
The Marches
Solent
New Anglia
West of England
South East Midlands
York & North Yorkshire
Cumbria
Greater Cambridge
Coast to Capital
Hertfordshire
Worcestershire
Enterprise M3
Northamptonshire
Dorset
Swindon & Wiltshire
Gloucestershire
Thames Valley Berkshire
Oxfordshire
Buckinghamshire

0 100 200 300 400 500 600

millions

Figure7. Combined GPF, RGF and EU structural and investment fund resources under the strategic influence of LEPs in
m (20112020/2021).
Note: Figures for RGF are based on estimates of the allocations in rounds 13. EU structural and investment fund allocations
have been published in euro and have been converted to pound using the exchange rate of 0.8627 as of 15 July 2013. Up
to 2% of GPF funding can be spent on programme management, which is envisaged to support LEP and partner capacity.
Source: Her Majestys Government figures and authors own estimates.

Page 15 of 20
Pike etal.

In terms of staff, some LEPs claimed to have has sought better understanding of the roles
up to 60 direct staff (for example, Liverpool City of local institutions in economic development
Region), around one third of LEPs have 59 staff at the local scale. Conceptual and theoretical
and a further third 14 staff (Figure8). Akey dis- developments and reflections have been under-
tinction is between staff directly employed and pinned by comparative empirical analysis of all
under the direction of the LEP and those staff 39 LEPs established for local economic devel-
that work for a LEP and a Leaders board, local opment in England since 2010. Responding to
authority, public agency and/or pre-existing part- the call for a richer account of where good
nership. Here, the resources and capacity avail- institutions come from, the shape they take,
able to LEPs and/or to other partnerships and and how they need to evolve to support long-
organisations becomes blurred. Management term growth (Rodrik, 2003, 12), three specific
and co-ordination of the interests of the various contributions have been made. First, economic
local institutions involved is a thorny issue for development institutions working at the local

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effective local economic development. scale are situated within multi-agent and multi-
scalar institutional environments and arrange-
ments. The extent, nature and evolving shape of
Conclusions this institutional space frames the capacity and
Engaging a vibrant institutionalist research scope of local institutional agency to influence
agenda in economic development, this paper and shape economic development. Echoing
Liverpool City Region
Lancashire
Tees Valley
Leeds City Region
Northamptonshire
Sheffield City Region
New Anglia
Black Country
Oxfordshire
York, North Yorkshire & East Riding
North East
Hertfordshire
Solent
Leicestershire
Humber
D2n2
West of England
Coast to Capital
Thames Valley Berkshire
Coventry & Warwickshire
Lincolnshire
Greater Birmingham & Solihull
South East
Swindon & Wiltshire
Stoke on Trent & Staffordshire
Worcestershire
Cheshire & Warrington
Greater Lincolnshire
Enterprise M3
Cornwall & Isles of Scilly
The Marches
South East Midlands

0 10 20 30 40 50 60 70
Number of staff

Figure8. Estimated number of direct staff by LEP area, 2013.


Source: Authors survey.

Page 16 of 20
Local institutions

the market-oriented and privatist localism in Exhortations of localism alongside limited


England in the 1980s and 1990s (Peck, 1998), the resources and capability meant the LEPs had
experience of guided localism (Eric Pickles, to experiment, innovate and improvise in try-
CLG Secretary of State, quoted in Illman, 2010, ing to interpret and fulfil their centrally pre-
1) across the 39 LEPs demonstrates how par- scribed and locally inflectedroles.
ticular and somewhat pliable forms of central- Third, the analytical themes identified to cap-
ism and localism are marked characteristics ture the different roles and functions of local
of local economic development in England. institutions in local economic development
Mulgan (2010, 1) characterises this particular provided a comparative framework systemati-
British vice as centralisation masquerading cally to engage diversity and variety at the local
as decentralisation. While the national level is scale. In the context of particular forms of cen-
often decisive in centrelocal relations, in other tralism and localism in England, the analysis
political-economic contexts internationally city, demonstrated how LEPs were encouraged to

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city-regional or regional level institutions may utilise local knowledge to diagnose economic
play vital roles too. How and in what ways is a growth potential, develop tailored strategies,
question for future cross-national research. and co-ordinate local and central actors to
Second, institutional genealogy provides stimulate economic growth within their LEP
a worthwhile means to grasp the historical areas. In a centrally prescribed and orchestrated
evolution of the institutional landscape and framework, LEPs have attempted to lead and
the ways in which continuities, endowments integrate decision-making as well as generate,
and legacies from past and existing insti- pool and direct complex and varied modes of
tutional environments and arrangements funding. The analytical themes provided a sys-
prefigure and shape new and emergent set- tematic means to interpret how the 39 LEPs
tings during periods of change and transi- undertook such tasks. The framework provided
tion. Such path dependencies are not simply a heuristic device applicable across the differ-
deterministic, however. Processes of layer- ent geographical settings of the 39 LEP areas to
ing, converting and recombining as well as inform explanation of local institutional agency
dismantling and improvising unfold in com- in economic development. It is a starting point
plex and often unstructured and unforeseen rather than a comprehensive checklist given
ways. Reflecting the longstanding instability that other roles and functions could be evident
and churn in institutional and governance elsewhere. What particular combinations of
arrangements for economic development in such roles and functions exist in different geo-
England (Pike and Tomaney, 2009), the anal- graphical contexts reinforces the need for fur-
ysis demonstrated how LEPs were shaped by ther comparative work internationally.
the preceding episode of regionalisation and Although diversity and variety across a range
regionalism and its dismantling, geographies of dimensions is marked amongst the 39 LEPs
of embedded structures and practices of joint in England, their role and contribution are being
working and partnership, and existing strat- compromised by a fragmented and shifting land-
egies and knowledge bases. In combination, scape of economic development governance and
LEP agency was framed by the establishment the absence of a longer term vision and plan for
of new national government priorities and their evolution. Concerns are being generated by
policy frameworks, tasks, funding streams, unresolved tensions between centralism and local-
geographies, organisations, staff and the ism, competition and collaboration, agility and
uncertainty generated by the unplanned bureaucratisation, and whether or not the LEP
and incremental unfolding of the Coalition Family develops a more coherent collective voice
Governments Local Growth agenda. and begins to articulate its interests with central

Page 17 of 20
Pike etal.

government. These issues are being exacerbated Studies and Regional Studies Association Seminar
by the existence of differential and overlapping The State of the LEPs, Newcastle upon Tyne (March
approaches to functional economic geographies 2013), and the Cambridge Economics Society
amongst the LEPs. Given the lack of long-term Conference Local Economic Growth: Recession,
Resilience and Recovery, Cambridge University
vision and strategy for their development, the
(July 2013). We acknowledge the support of the
fundamental tensions yet to be resolved and their
Spatial Economics Research Centre funded by the
institutional deficits and limitations in authority, Economic and Social Research Council, Department
accountability, capability and resources, at this for Business, Innovation and Skills and the Welsh
stage in their evolution, the comparative analysis Assembly Government (ES/J021342/1 and ES/
of the 39 LEPs suggest that many will struggle G005966/1). The usual disclaimers apply.
to exercise substantive influence upon economic
development at the local level. Continued state
austerity, faltering growth and uncertain eco- References

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