One of the hats I wear is as the Deputy Chairman of the Greater Birmingham and Solihull (GBS) LEP. In all there are 39 Local Enterprise Partnerships in England. Each LEP brings together local authority leadership and private sector business leadership (with the private sector contingent being in the majority) to focus on, principally, the jobs and growth agenda for each LEP’s economic geography.
The LEP’s replaced the Regional Development Agencies (in our case the WMDA) and unlike the RDA’s at the outset the LEP’s had no cash, no balance sheet and no power. On the face of it this was not the greatest board appointment but the last three years have been fascinating. The motivation for the private sector membership, certainly in the case of the GBS LEP, was to see if we could help address the relative economic underperformance of the West Midlands in the previous decade or so.
One statistic that resonated when the LEP was formed was that in the ten years up to the collapse of Lehman Brothers in the Autumn of 2008, a period as you may recall of unprecedented economic growth (albeit we have paid the price for the grossly over extended credit that provided the rocket fuel for this growth), the West Midlands economy saw a reduction of nearly 1m people in employment in the private sector. The rate of employment remained steady propped up by the nearly 1m jobs created in that period by the public sector.
In economic terms this is clearly unsustainable and the natural reaction for a new group charged with driving the jobs and growth agenda is to be seen to be doing something. Look busy, launch initiatives, big speeches, lots of meetings etc. etc. Fortunately our board was in full agreement that we needed a clear strategy for growth; a strategy that embraced the buy-in from key public and private sector stakeholders. Since WW2 there have been around 40 different forms of regional economic fora (the LEP’s and RDA’s being the most recent); as we expressed to Government at the time is it any surprise we have seen the relative economic underperformance of the UK’s regional economies? We needed a strategy that whilst produced by the LEP is under the ownership of the private and public sector stakeholders that will be key to its successful implementation.
In business strategic plans will typically set out a road map around where objectives are clear, resource allocation is agreed, accountability is established and so on. Regional economic strategies are no different with the proviso that the psychological component is critical. Regional economic success is very closely aligned to the successful partnership between central and local government with the private sector.
And to bring this up to the present day the GBS LEP strategy has evolved around the same core elements identified at the outset. And yes the West Midlands is now the highest performing regional economy in the UK outside London in terms of exports, job creation, inward investment, private sector job growth and business start-ups. It would be wrong for the LEP to lay claim to this outstanding turnaround in the West Midlands economic fortunes but the strategy has definitely helped in aligning the key stakeholders in the public and private sector.
And now wearing my Blackwood hat what relevance does this brief strategic regional economic interlude have on the investment strategies for our clients? Very simple. Our partners take great care in developing investment strategies that have the buy-in of all key stakeholders. This helps to drive both better accountability and outcomes.