Local Enterprise Partnerships (LEPs) are threatening to become “old boys’ clubs” that fail to engage effectively with the small business owners they represent, the Federation of Small Businesses (FSB) has warned.
Ahead of the 100-day anniversary of the election of six Combined Authority mayors, the FSB published research revealing that 70 per cent of small firm owners generally supported the principle of devolving further power to bodies such as mayors and LEPs.
However, the findings also revealed a lack of communication and trust between local business owners and their representative bodies.
Just one in seven respondents felt they had been consulted on local devolution, while a majority believed they were restricted from contributing to the ongoing decision-making process.
Meanwhile, over half claimed they had no means to communicate with LEP. Only in the experiences of one in three small business owners did LEPs represent their views.
Local Enterprise Partnerships were introduced by government in 2011 to help lead economic growth and job creation across the UK, but have previously come under fire from small business owners for failing to be fully transparent. There are 38 LEPs currently operating.
Encouragingly, a majority did feel LEPs worked to the benefit of local business owners, but the FSB has pressed for a number of reforms to ensure they fully work in favour of those they represent.
In a statement, FSB chairman Mike Cherry acknowledged the “great work” of Local Enterprise Partnerships, which would be vital in supporting firms throughout Brexit and deliving the government’s industrial strategy, but warned reform was “urgently needed”.
“All LEPs are obliged to have a small business champion in place and that obligation needs to be met right across the country,” Cherry said.
“LEPs need to be beyond reproach in terms of their governance, overall transparency and representativeness. They should be channels for economic growth and targeted business support, not old boys’ clubs.”
Cherry added that Combined Authorities needed to demonstrate clearly how they promote local business growth, and how company owners would be able to hold them accountable.
“It’s encouraging to see that our new mayors are already engaging with small businesses in some areas. A number have established business advisory groups, and we urge those that haven’t to follow suit, ensuring they bring together representatives from all sections of the business community.”
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