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News - 16 July 2005

New fund annoys regional development agencies.

The Local Enterprise Growth Initiative (LEGI) aims to boost employment in the 88 most deprived wards in the UK through innovative enterprise and investment ideas. So why are RDAs annoyed about it?

The first phase of the scheme will allocate about £100,000 to local authorities that have deprived neighbourhoods within their boundaries, to work up schemes that they will then submit to a bidding process to obtain funding from the £300 million LEGI pot.

Initially funding will be spread over three years with a possibility of extension up to 10 years. The first phase is planned as: £50 million 2006-7, £100 million 2007-8, £150 million 2008-9 but this has yet to be confirmed. The eb4u (east Brighton) neighbourhood renewal area is one of the 88 most deprived wards that LEGI is aimed at.

LEGI will be a competitive process and the ODPM estimates that about 30 areas will receive funding so it isn’t guaranteed Brighton & Hove will be one of them but we have a good track record for competitive bidding and we have a range of good projects that are short of cash but would fulfil LEGI aims and objectives.

Normally funds like this are channelled through regional development agencies like SEEDA, but this fund is being administered directly by the Government Office of the South East (GOSE) and RDAs are worried that funding might be used to support business development activities without RDA approval. It isn’t clear why the government has decided to bypass the RDAs and understandably they are disappointed.

Indeed a number of aspects of LEGI will not be clear until later in the month when guidelines are published. It is anticipated that the funds can be used for a wide range of projects but the capital/revenue split is still unknown. Also there is an opportunity to pool funds e.g. Area Investment Framework (AIF), Local Authority Business Growth Incentive (LABGI) and Neighbourhood Renewal Funds (NRF) but the mechanism for such pooling will require guidance. The monitoring and reporting of the way money is spent will be of particular interest to those delivering on the ground. There is widespread criticism that some existing schemes have overly bureaucratic monitoring processes that often baffle delivery agencies.

There are also three other separate schemes in existence that cover similar ground - Phoenix Fund, Enterprise Areas and Community Investment Tax Relief but their future may now be uncertain.

The Brighton & Hove Economic Partnership (BHEP) will be working closely with the local authority to explore the possibilities for LEGI.

Read related items on:
Local Enterprise Growth Initiative
Brighton & Hove Economic Partnership
Government Office for the South East

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