NAO: More Needs To Be Done For Local Economies

New Data Released On Impact Of Initiatives


The National Audit Office (NAO) has called on the government to make sure its local economic plans are on track.

Data released by the authority has shown very little progress has been seen from Local Enterprise Partnerships, Enterprise Zones and City Deals, despite billions of pounds being pumped into them by the coalition.

In 2010, the government released a white paper called 'Local growth: realising every place's potential' and this instigated the creation of a number of initiatives to help deprived areas like Hull, Bradford and Doncaster become economic hubs.

But three years on from this, despite initial progress, the NAO argues the estimate of jobs created by Enterprise Zones has dropped from 54,000 to between 6,000 and 18,000 - substantially less than had been forecast by coalition ministers.

Direct funding for these programmes from the central government has also fallen and even though there was £1.46 billion of expenditure on this project in 2010-11, this fell to £272 million in 2012-13.

Amyas Morse, head of the NAO, said: "Three years on from the 2010 White Paper, the new local Enterprise Partnerships are taking shape and jobs are being created.

"But the transition from the old to the new schemes has not been orderly and there has been a significant dip in growth spending ... central government needs to make sure ... [they can] oversee initiatives."

One of the main recipients of government money under the Enterprise Zone plan was Manchester Airport and this has so far been a massive success, according to local business leaders.

Executives of Manchester Airport Group, which is partially owned by Manchester City Council, recently received £800m from a Chinese government-backed consortium to try and build its ambitious Airport City project.

This hub will act as a centre for both local and multinational businesses that want to exploit rising growth in both regional and global markets.

Expert Opinion
We have said on numerous occasions that small businesses across the UK have a key role to play in the economic recovery and need support in order to thrive. Local economy schemes have a huge part to play in this and we hope that the government is able to address the concerns raised by the work of the NAO.

"However, it must be remembered that businesses also need to ensure they are doing everything they can to benefit from incentives and schemes which are out there to support them. This includes having the right kind of support network in place to ensure they are able to take advantage of opportunities as and when they emerge.

"A key part of this is having access to specialist legal support that will be able to assist on a range of issues key to the growth and expansion of an operation."
Steven Beahan, Partner