Feature
Local Economy
2022, Vol. 37(1-2) 66–83
© The Author(s) 2022
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DOI: 10.1177/02690942221098615
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The role of the private sector in
subnational governance: Learning
lessons from England’s local
enterprise partnerships
Jack Newman
University of Cambridge, Cambridge, UK
Nigel Gilbert
University of Surrey, Guildford, UK
Abstract
This paper seeks to learn lessons about the role of the private sector in subnational governance by
analysing the UK’s Local Enterprise Partnerships (LEPs). The paper outlines the public justifications
for LEPs using documentary analysis, and then considers these against findings from interviews and
network analysis, concluding that the justifications are problematic. LEPs were established on the
assumption that civic and business leaders needed to be brought together in business-led insti-
tutions. However, network analysis shows most civic leaders also hold private sector roles, un-
dermining the assumed need for a ‘bringing together’. Three further justifications of the LEP model
are also challenged. Firstly, business leaders were supposed to enable knowledge flows, but analysis
shows that this knowledge is skewed by unrepresentative LEP boards. Secondly, it was assumed that
LEPs would catalyse networks, but the networks have been built around individual interests,
without transparency. Finally, LEPs were meant to mirror business structures, but this has un-
dermined democratic accountability. Taken together, these findings suggest that the creation of
LEPs has attempted to solve the wrong problem in the wrong way. The paper concludes by
proposing guiding principles for the role of the private sector in the Levelling Up agenda: rep-
resentation, transparency and accountability.
Keywords
local enterprise partnerships, public-private partnerships, levelling up, private sector engagement,
regional governance, English devolution
Introduction
In February 2022, the UK government
launched its ‘Levelling UpWhite Paper’, a plan
to address place-based inequality in the UK.
Corresponding author:
Jack Newman, Bennett Institute of Public Policy,
University of Cambridge, Alison Richard Building, 7 West
Road, Cambridge CB3 9DT, UK.
Email: jn454@cam.ac.uk
The promise to ‘level up’ had been central to
the Conservative Party’s 2019 election win, as
the counterpart to its ‘get Brexit done’ slogan
(Newman, 2021). The place-based approach
indicated by the Levelling Up agenda raises
questions about the governance mechanisms
that will be used to tackle place-based in-
equalities. Given the Conservative Party’s re-
peated emphasis on partnerships with business,
the subnational relationships between the
public and private sectors are likely to be
crucial. Since the abolition of the nine Regional
Development Agencies in 2010, much of
England’s subnational development has been
delivered through 38 Local Enterprise Part-
nerships (LEPs), which are boards of civic and
business leaders operating at a smaller subre-
gional scale. While there are now signs that
LEPs are being subsumed under new ‘city and
county deals’, they offer important lessons for
researchers and policymakers, both in the UK
and elsewhere, about how the private sector is
institutionalised in subnational governance.
LEPs were created on the basis of an assumed
distinction between local civic leaders and local
business leaders, and the assumption that the
balance between them needed to shift in favour
of the latter. Business leaders were brought into
subnational governance for their knowledge of
the local economy and their professional net-
works. However, our mixed-methods research
conducted across eight case-study LEPs shows
the reality is more complex, with a blurring of
the local public and private sectors. We show
that many LEP board members had one foot in
both the public and the private sectors, com-
bining roles such as local authority councillor
with director of an SME. Moreover, those board
members with private sector interests were as a
group untypical of local business and industry.
The LEP experience shows that importing pri-
vate sector knowledge and practices into the
public sector is not itself difficult; the problem is
to do so in a way that is transparent, accountable
and representative.
The paper begins with the existing literature,
which considers the place of the private sector
within subnational governance, and specifically
the place of LEPs within England’s political
devolution and local economic development.
Among this literature, there is insufficient focus
on the internal relations of LEPs, despite those
relations being central to their original justifi-
cation. The paper then outlines its theoretical
foundation and mixed-methods approach. The
main body of the argument is made over three
sections, one relating to each of the three
methods used: document analysis, interview
analysis and social network analysis. The
discussion and argument are built up over these
sections, leading to a conclusion that public-
private relations within LEPs lack transparency,
accountability and representation.
Local enterprise partnerships
In the late 1990s, under the reforming drive of
the newly elected Labour Party, the UK gov-
ernment sought to devolve power to the English
regions by creating Regional Development
Agencies (RDAs). They were established by
the RDA Act (1998), which declared that
‘England shall be divided into [nine regions]
and for each such region there shall be a de-
velopment agency’. In 2010–11, 38 LEPs re-
placed the RDAs as the institutions of regional
governance in England, operating at a smaller
‘subregional’ scale. Rather than declaring the
territories of these new institutions in law, the
Conservative-led government instead invited
‘local groups of councillors and business
leaders to come together … to form local en-
terprise partnerships’ (BIS and DCLG, 2010).
This approach indicated a concern with fos-
tering organic partnerships at the subregional
level between public and private sector leaders
(Deas et al., 2013). The White Paper that fol-
lowed stated that the government was creating
LEPs ‘to bring together business and civic
leaders to set the strategy – and take the
decisions – that will allow their area to prosper’
(BIS, 2010: 3).
The consequences of this approach included
a lack of clarity about the role and purpose of
Newman and Gilbert 67
LEPs, and a messy map of subnational
boundaries that entailed overlapping and non-
coterminous territories. For example, some
LEPs sit within combined authorities, some
within county councils, some overlap these
institutions, and some relate to neither. These
complexities link to broader problems of ter-
ritorial governance in the UK, particularly
within England. LEPs sit within a wider system
in which intergovernmental arrangements ‘are
often fragile, tentative and rely on inter-
personal links, rather than formal institutional
arrangements’ (Ayres and Pearce, 2013: 812).
In terms of the purpose of LEPs, Britton and
Woodman (2014: 631) argue that because they
are ‘driven by a traditional economic devel-
opment emphasis on key sectors’, they tend to
focus on isolated ‘big ticket’ projects at the
expense of longer-term transformations to
‘deliver multiple economic, environmental, and
social objectives’.
Although LEPs operate at a smaller scale
than RDAs, and although they are more in-
dependent of the centre, Bentley and Pugalis
(2013) point to a continued legacy of central-
isation, with Whitehall absorbing many of the
RDAs’ important functions. They argue that
LEPs represent a ‘weak variety of localism’ in
which the centre plays off ‘winners and losers’
against one another, maintaining power
through funding competitions in a context of
resource-scarcity (Bentley and Pugalis, 2013).
More recently, Gheres et al. (2020: 1021) have
argued that the ‘new localism’ created ‘an il-
lusion (of power) as the new arrangements have
failed to empower local actors’. This leads to a
concern that LEPs lack the resources and
powers to ‘take the decisions that will allow
their area to prosper’ (BIS, 2010: 3). The nine
RDAs had together received around £2 billion a
year (Larkin, 2009), peaking in 2007–08 at
£2.3 billion or an average of £256 million per
institution (Bowden and Liddle, 2017). Over
the 2010s, LEPs received only £1.2 billion a
year, around £32 million per institution
(Institute for Government, 2021). Furthermore,
LEP money was spread much more unequally
and inefficiently through a greater reliance of
competitive funding pots rather than single pot
budgets (Newman et al., 2021).
In more recent years, LEPs have been
overlayed by ‘mayoral combined authorities’,
groupings of local authorities led by an elected
mayor. These bodies have received new powers
and more substantial funding, but there remain
major concerns that the centre continues to
retain substantial control (Bailey and Wood
2017; Newman et al., 2021; Tomaney, 2016).
Because of these problems and the changing
political climate, at the time of writing LEPs are
facing reforms as part of the Levelling Up
agenda. The literature already identifies their
‘deficits and limitations in authority, account-
ability, capability and resources’ (Pike et al.,
2015: 201). However, the problems of LEPs go
even further. Even though ‘the relationships
which are the foundations of LEPs are of ut-
most importance to their efficacy’ (Doyle,
2013: 925), it has been argued that they have
failed to ‘foster the horizontal coordination of
local actors’ (Gheres et al., 2020: 1021). Given
that their primary aim has been to bring to-
gether ‘business and civic leaders to set the
strategy’ (BIS, 2010: 3), horizontal coordina-
tion between stakeholders should have been a
strength, rather than a weakness.
There are important lessons to learn here
about the precise role of the private sector in
subnational governance. Syrett and Bertotti
(2012) looked at previous attempts to engage
the private sector in the UK’s local economic
development. They found that policies had
been built on a ‘limited understanding of
processes of private sector engagement and
misconceptions over what it can achieve’,
leading to a model that was focused on larger
corporate interests ‘largely unfettered by some
of the traditional requirements of democratic
accountability, transparency, and scrutiny’
(Syrett and Bertotti, 2012: 2311–12). Over the
last decade, these issues have become more
important as local development strategies have
been increasingly driven by non-state actors
(Harrison, 2014). In the era of ‘business
68 Local Economy 37(1-2)
orchestrated regionalism’ (Harrison, 2021),
public-private relations are increasingly driven
by the make-up of the local private sector and
its interaction with global economic processes
(d’Albergo et al., 2018). However, the dy-
namics of multi-level political systems remain
an important factor (d’Albergo et al., 2018),
and their design are within the control of na-
tional policymakers. It is therefore desirable to
learn lessons from previous attempts at sub-
national private sector engagement, and to
avoid repeating the same mistakes while the
Levelling Up agenda is pursued.
Theory and methods
This paper builds from a critical realist social
theory (Archer, 1995; Elder-Vass, 2010;
Newman, 2020). At a basic level, critical re-
alism offers a middle path between positivist
quantitative-driven approaches, and interpreti-
vist qualitative-driven approaches, providing a
theoretical foundation for mixed-methods re-
search. A key pillar of critical realism is the idea
that all entities are defined by their unique
causal capacities, and that every entity is
composed of parts (other entities) that are ar-
ranged (or ‘structured’) in a particular way
(Elder-Vass, 2010). This basic theory of entities
allows for a layered ontology, in which social
reality can be said to comprise ‘emergent
strata’: the ‘physical’, ‘agential’, ‘ideational’
and ‘relational’ (Newman, 2020).
The ‘physical’ stratum includes all entities
that have a physical existence, including natural
resources, landscapes and the built environ-
ment. While physical structures, such as ter-
ritory and infrastructure, are particularly
important for the study of LEPS, they are not a
primary focus of this paper; our project has
engaged with these issues elsewhere (Seaford
et al., 2021). The ‘agential’ includes individual
perspectives and the unique creative and stra-
tegic powers of the agent, which is particularly
important when analysing people in positions
of relative power. Our methodology therefore
includes interviews with the individuals in and
around LEPs. The ‘ideational’ includes lan-
guage, texts and structured thought; in this
case, the laws and policy encompassing LEPs,
and the discourse they produce. Our method-
ology therefore includes a document analysis
focused on the justification for LEPs. The
‘relational’ includes all relations between
people, from friendships to power inequalities,
and particularly job roles and professional
networks, including linkages between local
civic and business leaders. Our methodology
includes a social network analysis to examine
this layer.
The research has focused on eight case-
study LEPs, chosen to represent a range of
economic and institutional conditions (Hoole
and Collinson, 2020). These case-study ‘sub-
regions’ are not referred to by name in the
analysis below to preserve a degree of ano-
nymity, but are listed here: Birmingham and
Solihull, Black Country, Coventry and War-
wickshire, Enterprise M3, Humber, North East,
Tees Valley and Worcestershire. Our wider
project has also included Cardiff Capital Re-
gion, but this is excluded here given that the
paper is focused on LEPs, which are institu-
tions specific to England.
To identify the justifications for the creation
and structuring of LEPs, government policy
documents from the 2010s have been analysed.
Documents were selected through an engage-
ment with the academic and policy literature to
identify the main texts in the formation and
ongoing review of LEPs. Analysis was con-
ducted using ‘critical discourse analysis’
(Fairclough, 2003), an approach that aims to
analyse how ‘social structures are maintained
and transformed in and through various forms
of languages and discourses’ (Jones, 2004: 43).
The practical analysis looked for themes and
patterns in the documents, based around the
identification of underlying assumptions
(Fairclough, 2003).
Within the eight case-study subregions,
50 interviews were conducted with board
members and staff employees within LEPs, as
well as those from businesses, local authorities,
Newman and Gilbert 69
trade unions and educational institutions. All
interview transcripts were analysed in NVivo,
with coding identifying and grouping similar
pieces of text within and between interviews
(Fielding and Thomas, 2001). The analysis was
based on a critical realist approach to ‘grounded
theory’ (Belfrage and Hauf, 2016), in which
proto-theories, developed during the coding
process, are linked to existing domain-specific
theories, which in turn are increasingly ab-
stracted to identify the wider agential, idea-
tional and relational processes. Findings were
then extracted from this organised data on the
basis of the questions that arose from the
document analysis.
Finally, this paper also builds on data from
social network analysis, an approach ‘that aims
to describe and explore the patterns apparent in
… social relationships’ (Scott, 2017: 2). Deas
et al. (2013) explain that the study of LEPs
needs to be complemented with social network
analysis to understand the ‘constellation of
actors’ who make up these institutions. This
involves identifying members of a network
(nodes) and the relationships between them
(links). In each of our case-study subregions,
analysis covered all the LEP’s boards and
committees. The members of these boards were
manually identified within the Companies
House database. Using R Studio to access the
database1, we gathered data on all the direc-
torships they held, checking for multiple entries
in the system using their postcodes and months
of birth. Further data was gathered on their
position within wider networks of interlocking
directorships. Using manual data scraping of
professional profiles (particularly LinkedIn),
members of selected LEP boards were also
categorised according to their various roles.
Time restrictions prevented full manual data
collection for all LEPs.
Document analysis
Document analysis showed that within a
government-driven shift towards private sector
structures and practices, LEPs were created
with an overriding objective to deliver growth.
This distanced them from the multifaceted
social and environmental aims usually associ-
ated with subnational governance, and aligned
them with a singular economic aim. The policy
mechanism to deliver this aim was the influx of
‘business leaders’ into subnational governance.
This raised two problems: who counted as a
business leader and how would power be
balanced. The first question remained un-
answered, but it was clear that ‘business
leaders’were assumed to be distinct from ‘civic
leaders’, a distinction fundamental to the jus-
tification for bringing them in at all. With re-
gard to the balance of power, LEPs were
required to include equal proportions of ‘civic’
and ‘business’ leaders on their boards, and to
have business leaders as chairs.
Therefore, the idea was that LEPs would
deliver local growth by being business-led.
This policy mechanism was thought to work in
three ways. Firstly, business leaders would
bring in knowledge of the local economy.
Secondly, LEPs would bring people together to
cataylse partnership-working. Thirdly, LEPs
would be structured like businesses to motivate
private sector behaviours. Underpinning all of
this is the assumption that the public and pri-
vate sectors are fundamentally different in
terms of their knowledge, networks and
behaviours.
From public to private
LEPs were created and justified within the
government’s broader aim to ‘rebalance the
economy towards the private sector’ (BIS,
2010: p. 1). The Local Growth White Paper
argued that ‘for economic growth to be sus-
tainable in the medium term, it must be based
on private sector investment and enterprise’
(BIS, 2010: p. 6). Therefore, the decisions
made in the creation of LEPs were underpinned
by an essential proclivity for the private sector,
and particularly its supposed capacity to deliver
local investment. As explained in the Heseltine
Report (the blueprint for the 2013 LEP
70 Local Economy 37(1-2)
reforms), this position rested on the belief that
‘the public sector has a poor record of em-
powering the individuals in its ranks [because]
by its nature it tends to constrain the essential
entrepreneurial spirit within us all’ (Heseltine,
2012: p. 8). This is evident in the naming of
LEPs as partnerships of ‘enterprise’, a word
that is a synonym both for ‘business’ and for
‘entrepreneurialism’, the risk-taking activity of
profit-seeking individuals.
It is within this private sector shift that LEPs
were given their purpose. They were ‘equipped
to promote private sector growth and create
jobs locally’ (BIS, 2010: p. 3), and this was
crucially differentiated from the previous RDA
approach, which supposedly ‘went against the
grain of markets, [stifling] natural and healthy
competition between places’ (BIS, 2010: p. 7).
The aim of ‘growth’ generated secondary aims,
such as ‘ensuring that local [skills] provision
meets the needs of local employers’ (HM
Treasury, 2013: p. 42) and ‘levering other
sources of co-investment’ (Heseltine, 2012:
p. 33).
The balance of power
The invitation to create LEPs (BIS and DCLG,
2010) and the Local Growth White Paper (BIS,
2010) provided the framework within which
they would operate. The documents stated that
‘it is vital that business and civic leaders work
together’ (BIS and DCLG, 2010: p. 1), clari-
fying that this would mean ‘equal representa-
tion on the boards of these partnerships’ (BIS
and DCLG, 2010: p. 2). This equality of rep-
resentation meant that ‘the Government
[would] expect to see business representatives
form half the [leadership] board’ (BIS, 2010:
p. 14). Perhaps of greater significance was the
requirement that ‘a prominent business leader
should chair the board’ (BIS and DCLG, 2010:
p. 2), with the aim of ‘putting local business
leadership at the helm’ (BIS, 2010: p. 11). The
focus on leadership was reinforced by the ar-
gument that ‘we cannot overstate the essential
role of the individual and leadership - show me
a problem and I will ask first who is in charge’.
(Heseltine, 2012: p. 8). Therefore, the balance
of power within LEPs depends on the pro-
portional equality between civic and business
representatives, but also the prioritisation of
business representatives in leadership roles and
the wider focus on individual leadership itself.
Knowledge flows
In their efforts ‘to bring together business and
civic leaders’ (BIS, 2010: p. 3), the government
were seeking a flow of knowledge from private
to public, ‘harnessing the private sector ex-
pertise of Non-Executive Directors’ (HM
Treasury, 2013: p. 11). The prioritising of
private sector expertise can be seen in the shift
from RDAs to LEPs. The government wanted
to ensure that ‘the relevant knowledge built up
by the RDAs over the years is not lost’, but
rather than seek to retain any of the ‘3000 RDA
staff’, they instead instigated a ‘knowledge
management handover’ (BIS, 2010: p. 19). In
other words, the RDAs would pass on their
expertise to LEPs through the transfer of in-
formation rather than the transfer of personnel.
This approach was followed through, and
5 years later, McGurk and Meredith (2018)
found that of all 616 members of LEP lead-
ership boards, only four had held a similar role
in the RDAs. This stands in contrast to the
import of private sector knowledge, which was
seen to be possible only if local business leaders
took seats and chairs on LEP boards. This
implies that the value placed on business ex-
pertise was much higher than the value placed
on existing public sector expertise of local
economic development.
Individual networks
As with the flow of knowledge, the attempt to
create collaboration and partnerships between
local institutions was about ‘encouraging
businesses to develop and share their capacity
for growth’ (HMTreasury, 2013: p. 7). Much of
the concern about building partnerships was to
Newman and Gilbert 71
enable knowledge transfer, and specifically
‘closer ties and interactions with businesses [to]
obtain the necessary commercial skills to de-
liver pro-growth policies’ (HM Treasury, 2013:
p. 14). Network-building was also thought to
‘provide confidence and spur business invest-
ment’ (HM Treasury, 2013: p. 17), invoking a
general focus on business confidence and more
specifically on leveraging private sector in-
vestment. Another aim of partnership-working
has been in the creation and implementation of
‘strategic growth plans’ (HM Treasury, 2013:
p. 44), on which ‘LEPs and local authority
members [are] expected to work with all rel-
evant local partners, including the local
chambers of commerce, other business bodies
and the wider business community’ (HM
Treasury, 2013: p. 44).
Therefore, rather than seeking to forge time-
limited and project-specific partnerships be-
tween public and private institutions, com-
monly referred to as ‘public-private
partnerships’ (Wang et al., 2018), LEPs are best
described as a form of ‘collaborative gover-
nance’, whereby state and non-state individual
participants ‘engage directly in decision
making’within an organised forum (Ansell and
Gash, 2008: p. 544). There are two important
consequences of this ‘collaborative gover-
nance’ approach. Firstly, projects, strategies
and decisions are not made between institutions
each with its own interests, but between indi-
viduals who derive their private interests from
roles in various institutions. Secondly, coop-
eration between different institutions is seen to
derive from pre-existing ‘personal networks
and ties which link business, the public sector
and civil society’, rather than vice versa
(Johnston and Blenkinsopp, 2017: 94).
LEP structures
By giving LEPs the overriding aim of ‘growth’,
the government closely aligned LEP structure
with the organisational structure of a private
business. This alignment allowed policymakers
to apply business practices and strategies
within LEPs, simply swapping out the drive for
profit with the drive for growth. This underpins
other policy aims, such as ‘using competitive
tension to strengthen incentives on LEPs and
their partners to generate growth’ (MHCLG,
2018: p. 12). Thus, LEPs had competitors
(other LEPs) within a marketplace (subnational
economies). The alignment is further embed-
ded through the institutional structures of LEPs
themselves, which match those of private
companies, having ‘boards of directors’,
‘chairs’ and ‘CEOs’, rather than ‘councils’,
‘cabinets’ and ‘mayors’.
In spite of an otherwise laissez faire ap-
proach to LEP governance, policy documents
insisted that ‘LEPs should remain small, re-
sponsive, business-led organisations’
(MHCLG, 2018: p. 12). Bringing in business
leaders to run LEPs was both a cause and an
effect of this approach: as a cause, the business
leaders were part of the attempt to make LEPs
like businesses; as an effect, the LEPs, as
business-like institutions, began to need the
kinds of expertise that business leaders held.
One consequence has been that LEPs are
lacking in mechanisms of democratic ac-
countability. Although LEPs ‘are primarily
accountable to the communities within their
area’ (MHCLG, 2018: 19), they are only
‘democratically accountable through their local
authority members’ (HM Treasury, 2013:
p. 46).
Summary of document analysis
The establishment of LEPs was justified by a
number of key assumptions. Firstly, there was a
broad distinction between the public and pri-
vate sector, and a view that the economy
needed to shift from the former to the latter.
Secondly, there was a specific distinction be-
tween local civic leaders and local business
leaders, which underpinned the central policy
mechanism of making LEPs business-led.
Thirdly, private sector expertise was privileged
to justify the influx of business leaders.
Fourthly, individuals’ networks were
72 Local Economy 37(1-2)
prioritised within a collaborative governance
approach. Finally, it was thought that making
LEPs look like businesses would make them
better able to achieve growth. This framework
of assumptions will now be considered against
the findings from our interviews and network
analysis.
Interview findings
The relationship between the public and private
sector within LEPs was a key theme in our
interview findings. An important issue was the
balance of power within LEPs between busi-
nesses and local authorities, with a range of
perspectives on whether they are and should be
business-led. While there were few direct
comments about the distinction between civic
and business leaders, this distinction was im-
plicitly reinforced in the disagreements about
the balance of power. On knowledge flows,
LEPs were seen to facilitate a flow of infor-
mation about the ‘real’ local economy, but this
was challenged because they were said to only
represent particular perspectives. On individual
networks, these were seen to be effective for
convening partnerships, but there were major
concerns about their transparency. Finally, on
LEP structures, a few interviewees celebrated
them as ‘unbureaucratic’ but this was out-
weighed by widespread criticisms of their lack
of accountability.
The balance of power
In relation to the distinction between the public
and private sectors within LEPs, the main
theme in our interview data was the balance of
power between businesses and local
authorities.
Some thought that LEPs should be business-
led and that the current arrangements were
working well. For example, there was the claim
that ‘LEPs are a business-led organisation’, and
this makes them ‘agile’ and able to ‘create a
collaboration between private, public and ac-
ademic sectors’ (Subregion 1,2 LEP CEO).
These comments echo government policy
documents, especially in the view that LEPs
‘are business-led organisations [that have a]
business nose and culture within them’ (Sub-
region 6, LEP Staff). However, others who
agreed that LEPs should be business-led, felt
that this had not been realised. One complained
that ‘the LEP is meant to be business-led’ but
has ‘struggled [to be] business-led because of
the political differences’ (Subregion 1, LEP
Member). Another went further, arguing that
LEPs were ‘effectively controlled by councils
in their area’ (Subregion 1, Local Chamber of
Commerce). Similar claims were made about
national politicians, with the ‘business ori-
entated [approach] subsumed by the way the
bureaucracy has to respond to massive re-
quests from Whitehall’ (Subregion 7, Civic
Organisation).
In contrast, other interviewees opposed the
business-led approach. Some believed that
LEPs were ‘accountable to businesses’ (Sub-
region 1, LEP) at the expense of the interests of
‘the millions of working people’ (Subregion 1,
Trade Union). This led to concerns that LEPs
were ‘not democratically accountable’ (Sub-
region 3, Local Politician) because, although
they ‘have local representatives from the local
authorities, it tends to be business-led’ (Sub-
region 7, Local Authority). Others thought that
LEPs ‘were meant to be business, led [but] they
were never going to be business, led, and the
good LEPs … don’t pretend to be the voice of
business’ (Subregion 8, LEP). Interviewees in
combined authority areas emphasised that
LEPs had lost much of their power to the
combined authority, which engaged ‘LEPs as
commissioned bodies to conduct activity’ and
did not allow them to set strategy (Subregion 7,
Combined Authority).
These various perspectives show two in-
tersecting disagreements about the balance of
power in LEPs: whether they are business-led,
and whether they should be business-led. Both
point to ongoing struggles over the basic
structure and purpose of these institutions.
More importantly, both disagreements
Newman and Gilbert 73
reinforce the assumed distinction between a
local business leadership and a local civic
leadership. This was also apparent in relation to
the issues of knowledge flows, individual
networks and institutional structure.
Knowledge flows
Reflected in the interviews was the govern-
ment’s assumption that knowledge would flow
into subnational bodies through business
leaders. ‘The LEP is becoming an information
gatherer’ (Subregion 3, Local Politician),
which ‘can offer a lot of advice [and] intelli-
gence’ (Subregion 6, LEP Staff). Interviewees
spoke of LEPs acting as a ‘conduit’ between the
local economy and local government, sug-
gesting that there ‘is a really good presence and
feed in from business’ (Subregion 1, Coun-
cillor), which shares ‘information so that [the
LEP] can make well-informed decisions’
(Subregion 1, LEP Staff). LEP members ap-
preciated having ‘a whole network of busi-
nesses … who can articulate what the barriers
are or where the opportunities are’ (Subregion
8, LEP).
A recurring theme across multiple subre-
gions was the suggestion that business leaders
were giving a ‘real’ insight into the economy;
‘[it’s] a mix of local authority and local busi-
nesspeople, [so] you get a political angle, but
you also get what I might call the real’ (Sub-
region 6, Local Politician). Similar language
was replicated in most subregions, with the
claim that business leaders knew what was
‘really happening in the economy’ (Subregion
1, LEP Staff) and provided ‘real time tracking
of what’s actually going on’ (Subregion 8,
LEP). However, the suggestion that businesses
provide insights into the ‘real’ economy un-
derplays the extent to which they hold posi-
tioned perspectives. This was underscored by
comments highlighting the unrepresentative-
ness of LEP boards. One respondent noted ‘a
bias by the LEP to focus on big business and
established businesses [and] people who are…
networked into the regional set-up’ (Subregion
3, Local Politician). Furthermore, businesses
represented on LEPs tended ‘to be the large
accountancy firms or… lawyers… rather than
people that actually have a full understanding
of what’s going on’ (Subregion 7, Local Au-
thority). Existing research on place leadership
shows major differences between sectors, not
just in terms of the requirements of leadership,
but also in terms of the relationships between
public and private (Anderton, 2017).
Individual networks
The initial justification for LEPs emphasised
the importance of networks between business
leaders and civic leaders. Similarly, LEPs
themselves claimed to be ‘the go-between, the
catalyst [to] encourage collaboration at local
level and encourage better relations between
business and local politicians’ (Subregion 1,
LEP Chair). They were seen to have an ‘im-
portant role [as] conveners in their local areas,
bringing people together to enable things to
happen’ (Subregion 6, LEP Staff). Where LEPs
are positioned in combined authorities, inter-
viewees reported that they ‘have got civic
leaders and business leaders speaking with one
voice’ (Subregion 5, CA Staff). In other areas,
LEPs were seen to ‘lead and facilitate’ to create
‘partnership arrangements’ that enable people
to ‘work together’ (Subregion 3, CA Staff).
However, there were also reports of tensions
between (and among) civic and business
leaders. In one subregion, before the ‘chair was
ditched’, ‘the local authority leaders refused to
turn up to the LEP’ because ‘it got that bad in
terms of trying to agree a strategy’ (Subregion
3, Local Politician). In another, there were
reports that ‘parochial interest … sometimes
come out in … petty squabbles’ (Subregion 1,
LEP Member). The question of ‘interests’ re-
flects a broader concern that ‘LEPs are the
product of entangled interests, including the
central and local state, business interests and
other actors that combine territorial politics and
relational networks’ (Pugalis and Townsend,
2013: 713).
74 Local Economy 37(1-2)
Some interviewees argued that because
‘people have different stakes and interests,
[they] are not coming together for the collective
good’ (Subregion 1, LEPMember). There were
concerns around ‘individual companies and
their own agendas [meaning that] there are
conflicts of interest everywhere and at each
point’ (Subregion 1, Local Chambers of
Commerce). These concerns link to the trans-
parency of decision making, with complaints
that ‘a lot of the decisions take place out of the
rooms that are minuted’, so that ‘none of us
know where decisions are being made’ (Sub-
region 8, Local Chambers of Commerce).
Transparency was said to be a particular
problem for appointments; ‘they must all go to
the same golf club because there’s a remarkable
pattern there about where they all come from’
(Subregion 7, Civic Organisation). In another
subregion, there was a complaint that although
‘LEP chairs should be genuinely private sec-
tor’, the LEP had ‘just appointed a Conserva-
tive [local authority] leader of 25 years standing
as the LEP chair’ (Subregion 1, Local Cham-
bers of Commerce). The same person was also
revealed by our network analysis to be director
of the largest employer in the area.
LEP structures
The final issue to consider is the extent to which
a LEP mirrors the structure of a private com-
pany. The central issue among all interviewees
was accountability. One respondent explained
that LEP structures ‘can be equally account-
able, [because] we operate very much like
companies [with] financial responsibility of the
directors’ (Subregion 1, LEP). The same person
also warned against ‘the bureaucracy being
created … on the back of accountability’
(Subregion 1, LEP). These comments were not
representative of most interviews, but they go
to the heart of a problem in the LEP model: to
be ‘lean’ and ‘agile’ organisations that replicate
the ‘entrepreneurial spirit’ of the private sector,
LEPs are structured like businesses, but as
public governance institutions, they need a
form of democratic accountability. This means
that there will always be a compromise between
private sector structures and public sector ac-
countability. ‘The opportunity for LEPs is more
about how you get a coordinated, commercial
and private sector voice [without giving] power
to people who are ultimately not accountable’
(Subregion 3, Council Staff).
Summary of interview analysis
The disagreements among interviewees about
public-private relations within LEPs raised
several important issues. There were dis-
agreements about who held the balance of
power on LEP boards, which reinforced the
assumed distinction between business and civic
leaders. This also linked to wider shifts in
power away from LEPs and towards combined
authorities, as part of the continual jockeying
for power among different local governance
institutions (Shutt and Liddle, 2020). Knowl-
edge flows were widely thought to give insights
into the ‘real economy’, but this was challenged
by concerns about unrepresentative LEP
boards. LEPs were considered to be effective
facilitators of networks, but these networks
were seen to be opaque and containing multiple
conflicts of interest. Finally, there were some
who defended the business-like structures of
LEPs, but there were widespread concerns that
they lacked democratic accountability.
Network analysis
This section presents an analysis of the com-
position of LEP boards and the business net-
works that surround them. The findings are
presented in relation to the three issues raised
above. Firstly, there is the distinction between
civic and business leaders, which links to
questions about conflicts of interest and
transparency. Secondly, there is the balance of
power on LEP boards and what this means for
their democratic accountability. Finally, there is
the question of whether LEP boards are rep-
resentative of the local economy and therefore
Newman and Gilbert 75
able to provide comprehensive local economic
knowledge.
Transparency and the
civic-business distinction
As shown in the document and interview analysis,
a distinction between ‘civic leaders’ and ‘business
leaders’ is crucial to the justifications for the
creation of LEPs and the decisions about their
structure. However, our network analysis chal-
lenges this basic premise of LEPs by showing that
many ‘civic leaders’ can also be considered to be
in the private sector.3 This is important not just
because the government emphasised the unique
expertise, connections and practices of the private
sector, but also because individual personnel were
seen to be central to each of these unique attributes.
If civic leaders also hold important and varied
positions in the private sector, then it would seem
that they already have access to such attributes.
Table 1 counts those members of LEP
leadership boards who held positions as company
directors. The data is presented in relation to the
sector of their main occupations. While 96% of
those from business held company directorships at
an average of 7.6 directorships per person, 93% of
elected councillors also held company director-
ships at an average of 3.7 per person. Councillors
held fewer private sector roles than those whose
primary occupation was in business, but the im-
portant point is that the councillors still had a
significant role in the private sector. Likewise, 88%
of education leaders held private sector positions,
with an average of 3.7 per person. All this suggests
that the attributes of private sector personnel
valued so highly in the formation of LEPs already
exist in the public sector.
The issue of transparency raised by inter-
viewees is difficult to measure, but insights can
be gained from the business networks sur-
rounding LEPs. Table 2 shows all eight case-
study LEPs, providing statistics on the net-
works surrounding each. The inner networks
are composed of all companies that have a
director on any of the LEP boards. The outer
networks include all companies that are linked
(by a shared director) to those represented on
the LEP boards. Firstly, it is clear that there is a
lot of variation across the country, with outer
networks ranging from under 500 to nearly
4000 companies. Secondly, the data shows that
the networks of companies surrounding LEPs
are highly connected, raising questions about
the necessity of LEPs being expected to play a
‘convening’ role. Finally, the size of these
networks also raises questions about the sheer
quantity of private interests feeding into sub-
national governance.
Accountability and the balance of power
While there are important qualitative dimen-
sions to the balance of power within LEPs, it is
useful to look at where the majorities lie on
their boards. Data was collected about the
members of the leadership boards of six LEPs.
Each member was categorised according to
their main occupation into groups such as
‘council’, ‘business’, or ‘education’. Table 3
Table 1. Company directorships held by members of six local enterprise partnership leadership boards.
Sector of main
occupation
Number of board
members
LEP board members
with company directorships (%)
Average company directorships
per board member
Business 56 96 7.6
Councillors 27 93 3.7
Education 16 88 3.7
Third sector 7 100 7.9
Central government 3 100 3.7
Other public sector 1 100 1
76 Local Economy 37(1-2)
shows the breakdown across these six LEPs.
The requirement for 50% business represen-
tation is met, with 51% of leadership board
members having their primary role in business.
However, the other 49% is made up of a rather
disparate group of people. Their categorisation
as ‘civic leaders’ was an important feature of
government policy documents, as it allowed for
the argument that LEPs were an equal part-
nership between two groups. This was also
crucial for defending the idea that LEPs were
democratically accountable. However, elected
councillors only represented 25% of the seats
on LEP leadership boards.Most of the rest were
from education (15%) and the third sector (6%).
While this data gives a good indication of the
balance of power within LEPs, it only includes
leadership boards and only considers each mem-
ber’s ‘sector of main occupation’. Therefore, two
subregions were chosen for further analysis. They
were selected to cover the largest range of data on
board composition, and we ensured that one was
within a combined authority and the other a LEP-
only area. In these twoLEPs, we conducted amore
in-depth analysis of all board members, factoring
in all their roles and interests. Table 4 presents
findings from this exercise. In one LEP, 67% of all
board members held a role in the private sector,
while in another this was 88%, both significantly
higher than the average of 51% for themembers of
just the leadership boards. On the question of
accountability, the representation of elected
councillors is even lower once analysis goes be-
yond the leadership board. Furthermore, many of
these councillors also held private sector interests.
Only about one in 10 LEP members had a dem-
ocratic mandate, and in Subregion 2 all of these
also held directorships in the private sector.
Representation of the local economy
McGurk and Meredith (2018) analysed all
38 LEP leadership boards in the UK, finding an
over-representation of ‘Finance’, ‘Transport
and Communications’ and ‘Manufacturing’.
By focussing on a smaller number of case-
study LEPs, the data we collected wasT
ab
le
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Newman and Gilbert 77
narrower but deeper in that it included all LEP
boards (not just the leadership board), all LEP
board members (not just the private sector
members), and all the companies where they sit
as directors (not just their main occupation).
The data also covered the wider networks in
which these companies were located; that is, all
companies connected via director interlocks
(Mizruchi, 1996). Crucially, sector represen-
tation is considered at the subregional level,
allowing us to determine how representative
each LEP was of the local economy.
Table 5 shows the top five sectors by em-
ployment within each area. The ‘Subregion’
column indicates the sector as a proportion of
total employment in the territory covered by the
LEP. The ‘Boards’ column shows the repre-
sentation of that sector on the LEP’s boards.
The ‘Network’ column shows the sector make-
up of the director interlocks. As the table
shows, several key sectors were either under- or
over-represented. While manufacturing ac-
counted for a significant percentage of em-
ployment in many of these subregions, it was
starkly under-represented in LEPs and their
networks. This is important given that when
LEPs were established, a priority was to ad-
dress the productivity gap in manufacturing
(Heseltine, 2012: 17). Similarly, the Retail
sector was under-represented across the LEP
boards and their wider networks, with the ex-
ception of Subregion 1. As with the exclusion
of manufacturing, the absence of retail raises
concerns about how representative LEPs really
are of their local economies.
The health sector was also under-
represented. It is important to note that this
data only includes health-oriented businesses
registered on the Companies House database,
whereas many of those in the health sector are
employed within the NHS. However, the data
collected on board composition showed that
only one member of the six leadership boards
was from the NHS. In contrast, education was
well represented in most subregions, reflecting
the place of education leaders on LEP leader-
ship boards (shown above in Table 3). The
difference between health and education here
can be explained by LEPs having ‘skills
boards’ but not ‘health boards’. This perhaps
underscores the lack of concern about public
health and wellbeing within LEPs, linked to
Table 3. Composition of local enterprise partnership leadership boards.
Sector of main occupation Number of board members Percentage of board membership (%)
Business 56 51
Councillors 27 25
Education 16 15
Third sector 7 6
Central government 3 3
Other public sector 1 1
Table 4. Private sector roles and elected councillors.
Subregion 2 Subregion 8
Number % Number %
All members with a private sector role 43 88% 35 67%
Members with a private sector role only 24 48% 20 35%
Elected councillors with a private sector role 6 12% 5 10%
Elected councillors without a private sector role 0 0% 5 10%
78 Local Economy 37(1-2)
their focus on ‘economic development’ rather
than ‘social growth’ (Doyle, 2013).
Summary of network analysis
The network analysis has offered insights into
issues raised by the interviewees. Firstly, there
is no clear distinction between business and
civic leaders, because the latter hold a range of
roles within businesses. This supports concerns
among interviewees about transparency and
conflicts of interest. Secondly, our findings
suggest that businesses are represented by at
least 50%, and by some measures nearly 90%,
of the seats on LEP leadership boards. Of those
designated ‘civic leaders’, only half are elected
Table 5. Representativeness of all local enterprise partnership boards.
Subregion 1 Subregion % Boards % Network %
Manufacturing 17.3 6.1 5.0
Health 13.5 1.4 4.0
Retail 9.7 13.0 8.8
Education 8.9 4.9 6.3
Business admin and support services 8.7 9.8 12.8
Subregion 2
Manufacturing 13.3 8.1 5.2
Health 13.3 5.6 3.9
Retail 9.4 1.3 2.7
Business admin and support services 9.4 19.4 9.7
Education 9.0 13.2 10.3
Subregion 3
Manufacturing 14.8 3.5 3.0
Health 13.4 5.9 4.0
Retail 10.1 5.7 2.5
Education 9.4 8.6 11.8
Business admin and support services 8.5 11.1 11.1
Subregion 5
Health 17.5 1.3 3.0
Retail 10.5 4.7 2.4
Manufacturing 9.7 2.8 3.0
Education 9.3 20.9 13.9
Business admin and support services 7.8 10.8 7.8
Subregion 6
Health 12.2 3.4 3.4
Professional, scientific and technical 11.0 17.5 16.4
Education 9.1 7.2 8.8
Retail 8.8 5.4 2.6
Business admin and support services 8.3 13.6 12.4
Subregion 8
Manufacturing 14.4 8.3 5.4
Health 14.2 8.6 6.7
Retail 10.2 3.1 3.3
Education 9.6 20.7 16.2
Business admin and support services 7.8 6.8 8.6
Newman and Gilbert 79
representatives, and many of those hold private
interests. These findings raise concerns about
the accountability of LEPs. Thirdly, with regard
to knowledge flows, we considered the repre-
sentativeness of the sectors on LEP boards and
their wider networks. This adds further weight
to the argument that LEPs only access partial
knowledge of the local economy, and do not
provide a window on the ‘real situation’ as
implied by some interviewees.
Conclusion
This paper has identified the assumptions un-
derpinning the public justification of LEPs and
considered these against qualitative and
quantitative data from eight case-study subre-
gions. The methodological approach used
critical realism’s ‘layered’ social theory, with a
particular focus on the agential, ideational and
relational aspects of social reality. In this
concluding section, we will return to these three
aspects to help summarise the paper’s main
findings.
The justification for LEPs assumed a
cleavage between two relational contexts, civic
organisational structures and the organisational
structures of business. Each relational context
was assumed to give rise to different ideational
contexts, with civic organisations and business
organisations containing different stocks of
knowledge. The business context was assumed
to be more suited to local governance and local
economic development, but civic leaders were
thought to lack the agency to replicate these
benefits because of their own relational and
ideational contexts. Therefore, LEPs sought to
bridge this gap in a number of ways: firstly, by
bringing individual agents from the business
context into the civic context, LEPs would
engage individuals who brought with them the
ideational assets and relational practices of
business; secondly, by bringing business and
civic actors together, LEPs would knit together
the relational structures of the business and
civic contexts, and consequently allow idea-
tional assets to flow between them; thirdly,
LEPs would be civic organisations that mirror
the relational structure of businesses (e.g.
CEOs, boards and a single economic motive).
Therefore, at the heart of the justification for
the creation of LEPs was the assumption that
business leaders and civic leaders were distinct
groups of agents, with distinct relational
structures, and distinct ideational assets.
However, our network analysis shows that this
is not the case. Elected councillors, education
leaders and other public sector employees also
hold multiple company directorships and other
roles within the private sector. This challenges
the assumed cleavage between the business
context and civic context. This central finding
suggests that the policies that created LEPs set
out to solve the wrong problem.
Three further justifications of LEPs were
also challenged in this paper, and these are
perhaps of greater importance for learning
lessons about the role of the private sector in
subnational governance. Each justification
points towards a missing principle in local
public-private collaboration.
Firstly, while LEPs were expected to import
private sector knowledge about the local
economy, our interview and network analysis
show that they instead imported partial per-
spectives that were problematically interpreted
by local leaders as ‘real insights’. This indicates
that the businesses involved in subnational
governance need to be representative of the
local economy, especially in terms of company
sector and company size. Alternatively, there is
also a clear possibility that this knowledge
could instead be gathered with greater neu-
trality and validity by professional researchers
and analysts. There are also questions about the
representativeness of LEP boards in terms of
gender, race, disability and other social char-
acteristics. While these questions were beyond
the scope of the current paper, with its focus on
the business-civic distinction, the importance
of these issues add further weight to the ar-
gument for representativeness as a central
principle in the design of subnational
governance.
80 Local Economy 37(1-2)
Secondly, an important justification for
LEPs was their connections to business net-
works. On the one hand, our findings do show
this connectedness, but on the other, inter-
viewees raised concerns about the conse-
quential conflicts of interest and opaque
decision-making. Partnerships between the
public and private sector need to prioritise the
transparency of interests and decisions. When
collaboration is based on individuals’ personal
networks, transparency will inevitably be
limited. The situation could be significantly
improved if collaboration were always based
on official institutional partnerships, and not
networks of individual local leaders.
Thirdly, LEPs were designed to be organised
like private businesses, both in terms of their
institutional structures and their singular eco-
nomic objective. However, our findings show
that this results in a significant deficit in
democratic accountability. To deliver ac-
countability, there is a need for a more sub-
stantial contingent of elected officials in
subregional bodies. Given that the mere pres-
ence of local councillors does not amount to
accountability, it could be argued that it is only
possible for an institution to be democratically
accountable if it is led by an elected body.
The identification of these three principles –
representativeness, transparency and
accountability – reinforces the conclusions of
existing literature on private sector engagement
(e.g. Syrett and Bertotti, 2012) and on the
structure of the UK’s subnational governance
(e.g. Sandford, 2017). However, this paper has
gone further by specifying the precise ways in
which the principles are currently unmet by
England’s LEPs. The novelty of the approach
lies in its systematic application of a mixed-
methods framework that uncovers the under-
lying assumptions of the LEP policy design and
shows how these assumptions are problematic
in the actual functioning of LEPs.
Overall, it is clear that a business-led model of
subnational governance tends to deviate from
representativeness, transparency and account-
ability, creating challenges for institutional design.
To deliver the multifaceted aims implied by
Levelling Up (Newman et al., 2021), subnational
institutions will need alternative approaches to
gathering local economic knowledge, building
local partnerships and securing capable
leadership. Rather than see businesses as the
solution to all three challenges, subnational in-
stitutions should seek separate solutions to each
problem within an uncompromised framework of
representative, transparent and accountable
governance.
Acknowledgements
We would like to thank project contributors: Charles
Seaford, Ben Glover, and James Sweetland (Demos);
Professor Simon Collinson, Dr Charlotte Hoole, Dr
Anastasios Kitsos, and Dr Diana Gutierrez Posada
(University of Birmingham); Dr Helen Tilley and Dr
Ananya Mukherjee (University of Cardiff); Profes-
sor Nigel Driffield (Warwick); and Lisa Fletcher and
Gail Deason (University of Surrey). In enabling the
network data collection, we owe a special thanks to
Will Langdale (HMRC), Matthew Smith (Edinburgh
Napier), and Hyungseo Kim (University of
Nottingham).
Declaration of conflicting interests
The author(s) declared no potential conflicts of in-
terest with respect to the research, authorship, and/or
publication of this article.
Funding
The author(s) disclosed receipt of the following fi-
nancial support for the research, authorship, and/or
publication of this article: This work was supported
by the ESRC (Economic and Social Research
Council) with Grant ES/T002468/1 from September
2019 to October 2021 as a joint project between the
Universities of Birmingham, Cardiff, Surrey and
Warwick and the think tank Demos.
Author’s note
This paper is based on research produced by the
Local Institutions, Productivity, Sustainability, and
Inclusivity Trade-offs (LIPSIT) project.
Newman and Gilbert 81
ORCID iD
Jack Newman https://orcid.org/0000-0003-3541-
7546
Notes
1. The code used to access the Companies House
database is available on application to the authors.
The code was primarily based onMatthew Smith’s
Companies House Package with additional func-
tions written byWill Langdale: https://github.com/
MatthewSmith430/CompaniesHouse.
2. To fulfil our commitment to respect the ano-
nymity of interviewees, the subregions have been
anonymised.
3. We define the private sector as any institution that
is registered on Companies House as a limited
company. In some cases, this may include
charities that have a business arm.
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