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IoD press release Local authorities lack the capacity to effectively support business

According to a recent poll by the Institute of Directors, 73% of business leaders have a lack of confidence in the ability of local authorities to provide effective support to business.

From April 2024, the core functions delivered by LEPs in England – business representation, local economic planning and the delivery of certain government programmes – will be passed to local authorities.

Commenting on the results, Dr. Roger Barker, Director of Policy at the IoD, said:

“Since their establishment in 2012, LEPs have provided business with a voice in local economic development. They have brought together business leaders, educational institutions and local politicians, often with minimal administrative support.

“Given the current challenges facing local government, this partnership is at risk. Many local councils are burdened by significant financial constraints, and have neither the resources nor the expertise to take on this important role.

“In addition, many local authorities in England remain outside of devolution deals, and lack the capacities enjoyed by combined authorities with metro mayors. In the absence of LEPs, their ability to support business is far from clear.”

Additional comments from IoD members:

“Local authorities are having to shut a range of welfare services. They are not going to provide local support to businesses due to financial restrictions and they have absolutely no skills to assist business.” (South East, Information and communication sector, 100-249 employees, £10 million – £50 million turnover)

“Local authorities are chronically underfunded, and the position has been getting worse for some years. Without additional funds from central government, it is ridiculous to expect councils to take on this additional responsibility.” (London, Professional, scientific and technical activities, 10 – 49 employees, £2 million – £10 million turnover)

Full survey results

703 responses from across the UK, conducted between 14-29 December 2023.

During the summer, the government confirmed that it would no longer provide funding to Local Enterprise Partnerships (LEPs), and would instead transfer LEP’s responsibilities to local and combined authorities from April 2024. 

How confident are you that local authorities have the capacity to provide effective local support to business?

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