Dinenage was speaking at the ICAEW Strategies for local growth: the role of LEPs and sharing best practice panel discussion at Chartered Accountants Hall yesterday.
The event was organised to discuss the greater responsibility LEPs have for local growth, in response to Lord Heseltine’s review of regional economic growth.
The panel also included Kit Malthouse, deputy mayor for business and enterprise and co-chair of the London LEP, and David Frost, chair of the LEP Network.
Frost said the game has “changed dramatically” since the Heseltine review and the autumn statement, as the government had put LEPs “absolutely centre-stage” in rebuilding youth employment across the UK.
He said the two bidding options available to LEPs, City Deals and the alternative 'single pot' system proposed by Heseltine, is “confused thinking” from the government. The City Deals system involves a bulk funding being given at once for LEPs.
Frost added that he had now noticed a shift towards single pot system.
He argued that LEPs are not replacements for Regional Development Agencies (RDAs), but can go the way of RDAs “if we are not careful and they end up hindered with too much bureaucracy.”
He lamented the “most depressing” problem that employability skills are still a major issue “despite years and billions of investment.”
“The role of the LEP is going to have to change quite dramatically. Visibility has to increase. Have LEPs made the connection with the greater public? No.
“The knives will be out they begin to fail,” added Frost.
Dinenage, who comes from a SME background, welcomed the more “place-based approach” to growth that LEPs have created, and said they have injected “a dose of common sense and expertise.”
When questioned on LEPs in the future, under a possible change of government, Dinenage said “we must avoid the temptation to buckle and pull back devolved power and responsibility when things don’t go exactly to plan. It’s better to empower.”
She added, “anything would be an improvement on the RDAs.”
Malthouse said that the discipline of the leadership of each LEP will be a determining factor in their success, as bidding becomes more political.
“If it’s done on a rational basis then London will always win. Investment in London is worth 30% more due to the agglomeration effect.
As a long-time small business owner he lamented that SMEs “hardly ever get a look in”, need access to finance but the “small cap venture capital market has dried up.”
However, Malthouse summarised the discussion by telling the audience not to worry “as some bright spark will come along in five years and wash it all away.”