Friday, March 11, 2016

News: LEP budget needs top up as it waits on £900m devolution deal


Rotherham Council looks set to be asked to pay £226,000 to the Sheffield City Region (SCR) Local Enterprise Partnership (LEP) and Combined Authority (CA) in the next financial year to help cover a deficit of £1m.

LEPs are the government's model to promote economic development and are led by the private sector. As a proposed devolution deal progresses, a mayoral combined authority is set to be created, building on the 2013 agreement which saw the nine local authorities that comprise the city region create a new legal body with responsibility for transport, economic development and regeneration.

In 2015/16 the CA/LEP operated to a £9m revenue budget, which was split between distinctly funded planned programme activity of £6.9m (which includes programmes delivering business support and projects boosting skill levels), and core costs associated with the running of the SCR Executive of £2.1m. This includes staffing, marketing and overheads.

Next year is set to see a proposed growth in core activity of £3m. Budgets for programme activity is set to fall by £1.7m, largely reflecting that Skills Bank activity will be run by an external agency, but partially being offset by an increase in Business Growth activity.

The budget is met by various sources including external grants, retained business rates from the city region's Enterprise Zones, investment income and partner contributions.

Councils approved loans to the LEP to "pump-prime" activity in 2012/13 of £1.126m, of which Rotherham Council advanced £188,000. It was similar story in balancing the LEP budget last year when subscriptions were frozen in 2015/16 at the 2014/15 level of £204,000.


A report to the Sheffield City Region Combined Authority states that, despite an increase in income, largely due to retained business rates payable from Sheffield and Chesterfield, "Income generated is not sufficient to cover the growth in expenditure. Increases in subscriptions are required to meet this cost pressure.

"This deficit is largely due to the £1m cost of the Transport Hub. This cost was previously borne by the South Yorkshire transport levy which funds SYPTE."

A move last year saw the SYPTE hand over responsibility for the co-ordination, development and delivery of transport strategy and policy functions to a newly-established strategic hub.

Proposals are being put forward for the South Yorkshire authorities to continue to meet the net cost of the Hub absorbed from SYPTE. These councils currently pay millions in levies to fund the work of the SYPTE but a 10% reduction on the levy was secured earlier this year.

Subject to the charging mechanism being approved, councils will pay in various amounts totalling £1.2m for 2016/17. Rotherham Council is set to be asked to pay in some £226,000.

It comes after Rotherham Council set a budget which includes proposed savings of £21m for this year. It includes £160,000 a year for the next three years which "represents replacement of lost grant funding with revenue budget to support the Rotherham Investment Development Office (RIDO) – a service critical for attracting inward investment into the borough if it is to grow and thrive."

The Sheffield City Region budget for 2016/2017 comes in at £11.2m. £3.2m has been set aside to cover the costs of its 62 staff. Staffing costs have grown by 110% from the previous year.

The proposed Sheffield city region (SCR) devolution deal with the Government is set to bring with it some £900m of additional cash over the next thirty years to deliver major regeneration, infrastructure and business growth schemes.

If the deal is ratified by constituent councils, the SCR will receive its first £30m "gain-share" payment in April 2016.

Sheffield City Region LEP website

Images: Sheffield City Region LEP


Unknown March 11, 2016 at 12:32 PM  

With an average salary across all staff levels of £51,612 I think we should all be applying for jobs there! It never ceases to amaze me just how much people pay themselves when they are spending someone elses money!!

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