New LEP network chair gives his views on economy on visit to Southwold

AXED regional development agencies (RDAs) had descended into “big bureaucracies” rather than agents for economic growth, the head of their replacements claimed while on a visit to Suffolk.

Speaking in Southwold last night on the eve of chairing the first national meeting of the new Local Enterprise Partnerships (LEPs), the leaner, smaller and very much less generously funded replacements for RDAs, David Frost said influence, not funding, would be the driving force behind the new LEPs.

David Frost CBE, outgoing director general of the British Chambers of Commerce and chair of the national LEP Board suggested the large amounts of public money RDAs had been given had “got in the way”.

“RDAs started off very well but they became, I believe, over time more of a bureaucracy than an agency for economic development.

“One of the ways it got in that was there were targets on the back of huge slugs of public money. That money is no longer there.”

One of the LEPs’ “great strengths” would be that essentially they are not accountable to Government but to communities because they are not having to account for the spending of these large sums, he argued.

“I don’t think this comes down to money - it comes down to influence,” he said.

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Mr Frost was in the seaside town to meet with business leaders, including Andy Wood, the chairman of the New Anglia LEP, covering Norfolk and Suffolk, and Suffolk Chamber president Dr Peter Funnell.

He told dinner guests: “I really want to say how important I think it is that not only Suffolk, but the whole of the UK, needs a new debate on the importance of wealth creation for our country and its economic future.

“There is at times too much focus on the public sector when it is the private sector and wealth creators that will lead our country out of this recession.

“Working alongside the New Anglia LEP, the chamber are showing that the answer to economic success is not about getting great slugs of government cash. The answer is recognising that the government can’t and shouldn’t do everything. Real growth comes from power to make decisions on a local level.”

Dr Funnell said working in partnership was something the chamber places a great value on.

“Alongside Andy Wood and the New Anglia LEP team we recognise the importance of such issues as broadband, energy, our enterprise zone, low carbon and tourism to the future of our success in Suffolk,” he said.

“The week’s announcement on superfast broadband for our county shows that when business works together and shows civic leadership we can make a real difference. This work must continue.”

Mr Frost delivered an upbeat message, suggesting that business leaders he had met had a “glass half full” rather than “glass half empty” attitude towards the economy, in spite of recent setbacks, including a rise in unemployment numbers to a new high of 2.51million and the spectre of a new Winter of Discontent looming over public sector pensions.

He pointed out that the British Chambers had predicted that jobless figures would rise to 2.6million before starting to come down - although he said youth unemployment was a concern.

He claimed there was a “pension apartheid”, with public sector pensions much more generous than those in the private sector.

“I think that’s a lot better than many people thought at the start of the recession. I don’t think that it’s going to be as bad as people thought. I think the public sector job losses won’t be as significant as first thought and I think the private sector has shown it’s quite able to create jobs - it created over 400,000 in the last 12 months alone.”

He added: “The economy is clearly very fragile but I would say the business community looks at the economy as a glass that’s half full rather than half empty.

Business leaders were “very optimistic” about the future despite difficult times, he said, and were not talking about a recession but about creating wealth and jobs.

Asked about higher taxes for the very rich to help offset the effects of public sector cuts, he claimed having a 50p tax rate would not raise any extra money.

However, he suggested that if there was room for tax breaks, those could be given to low earners.

“It’s very difficult for the Government at a time when we are supposed in quotes we are all in it together, the idea that you start to give tax breaks to the rich is not on,” he said.

“If we’re all in it together, I think high earners for this difficult time in the economy have got to be prepared to make that contribution.”