Decision details

Proposed Decision

To agree the transfer of relevant South East Local Enterprise Partnership (SELEP) responsibilities to Kent County Council from April 2024 including:

• Business representation

• Strategic economic planning

• The delivery of government programmes (where directed)

Reason for Decision

Local Enterprise Partnerships (LEPs) were set up by Government in 2011 as business-led partnerships bringing together the public, private and education sectors to have a central role in determining local economic priorities.

On 4^th August 2023, Government confirmed that the functions of LEPs will be delivered by upper tier and combined local authorities in the future. LEP transition guidance confirmed that Government expects LEP functions to be transferred to either a whole county level or functional economic area with a minimum population of 500,000. KCC will therefore need to agree to take on LEP functions on behalf of Kent and Medway. This has been discussed with Medway Council.

Background

Essex County Council (ECC) acts as accountable body for SELEP and looks after many of the back office, legal and HR functions for the organisation. Details in the government guidance about LEP functions to be transferred remain fairly high level but KCC will need to work towards the adoption (or continuation) of the following broad functions:

1. Business representation
2. Strategic economic planning
3. The delivery of government programmes (where directed)

KCC, Medway Council and the Kent and Medway Economic Partnership (KMEP) will agree the best way forward for key activities formerly delivered by SELEP with a view to implementing the best county-wide solution or continuing certain activities with Essex and East Sussex where there is merit in doing so.

SELEP’s financial reserves will enable funding to be provided to the relevant local authorities (Kent, Essex and East Sussex) to take on members of the SELEP secretariat team to support the implementation of economic growth activities for a period of time (approximately 12-18 months) following the closure of the LEP. In consultation with HR teams, KCC’s Economy Team is working with SELEP on potential arrangements for employing up to four members of staff on a temporary basis.

From April 2024, KCC will also take on responsibility for the future management and monitoring of the Kent & Medway element of SELEP’s capital funding programmes. While this will primarily relate to ensuring the smooth running of existing GBF & LGF projects until their conclusion in 2027-28, KCC anticipates securing a pot of recycled Growing Places Fund capital loan funding that could be run as a new Kent & Medway scheme to provide an evergreen loan fund to support capital investments in the county that contribute to economic growth. It is currently understood that this funding would need to adhere to the original aims set out by government which were to support stalled capital investments by providing interest-free loans. SELEP is currently holding approximately £15m of repaid loan funding that will need to be shared between Kent & Medway, Essex and East Sussex.

Options

The transition of LEP responsibilities to local authorities is mandated by government. The approach that KCC is taking will be to determine with the Kent & Medway Economic Partnership the best options for implementing former LEP activity on a local basis.

How the proposed decision supports Framing Kent’s Future 2022-2026:

LEP transition provides a direct response to the following FKF commitment:

“Work with partners to develop a better co-ordinated approach to economic development across the county, joining up the strengths of the County Council, the Kent Districts and Medway. As part of this, we will explore opportunities with Government to gain control of more of the resources and decision-making that shape economic growth in the county.”

Financial Implications

For KCC, adopting LEP functions will incur revenue costs as much of the activity to be transferred has a staffing requirement. However, there are two sources of external funding that will help support KCC LEP transition activity in the short term:

1. The Government has confirmed that it will provide some revenue funding to local authorities in 2024/25 to support them but based on current grant to SELEP could be up to £100k. Funding beyond 2024/25 is subject to future Spending Review decisions.
2.  SELEP residual funding set aside specifically to facilitate the transfer of team members to local authorities on a temporary basis.

There is currently not a KCC budget line relating to the financing of SELEP activity. This work will only continue while SELEP reserves and specific government grants are in place to cover these new burdens.

As Cabinet Member for Economic Development, I agree to:

a)         the transfer of relevant South East Local Enterprise Partnership (SELEP) responsibilities to Kent County Council from April 2024 including:

• Business representation

• Strategic economic planning

• The delivery of government programmes (where directed); and

b)         to delegate authority to the Director for Growth and Communities to take other relevant actions, including but not limited to finalising the terms of and entering into required contracts or other legal agreements, as necessary to implement the decision.