A Growth Deal for London
07 July 2014
In 2013 the Government announced its plans to establish a £2bn Local Growth Fund in response to Lord Heseltine’s report ‘No Stone Unturned, In Pursuit of Growth’ (2012). In order to access the fund, local enterprise partnerships (LEPs) were asked to negotiate a ‘Growth Deal’ with Government, articulated in a Strategic Economic Plan and comprising proposals for the funding. The Growth Deal would also act as a way for LEPs to put certain ‘asks’ to Government in order to obtain additional levers and influence to help promote growth in the LEP area.
The initial deal secured by the London Enterprise Panel saw £236m of Government funding allocated to the LEP to be used to help create thousands of new jobs in the capital. Key features of the deal, confirmed with the Government in July 2014 included:
- A £55m programme of investment in new infrastructure for further education colleges and other skills providers in the capital, with a further £65m also provisionally agreed. More information on the programme here;
- Up to £5m of funding for a programme to help raise digital skills among young people in London;
- £70m of funding to be used in partnership with London’s boroughs on projects that will support the London Enterprise Panel’s Jobs and Growth Plan.
- Up to £10m of European Social Funding for a project in central London that will aim to move those furthest from work into the labour market; and
- A Government commitment to double the Apprenticeship Grant for Employers (AGE) from £1,500 to £3,000 for small to medium sized businesses in London. The decision follows a successful trial in the capital in 2013 that helped 1,000 young people into apprenticeships. Update (September 2013): The Skills Funding Agency has been working to ensure that the technical requirements to process the enhanced AGE incentive meet European funding rules. The LEP will make an announcement (once this process has concluded in late autumn) outlining the launch date of the enhanced AGE incentive for small and medium enterprises in London.
- £5m for a Digital Talent Programme to help local young people get the right skills to fill jobs in the city's booming tech sector.
As part of London’s Growth Deal, the Government has also increased the Housing Revenue Account borrowing limit to help support the development of new affordable homes by a total of £97.6m across London boroughs.
A second round of negotiations with government took place in January 2015, with the LEP submitting a detailed bid for further funding which led to the LEP being allocated a further £58m to create thousands of new jobs.
Of the £58m, around £38m will be used to support colleges and further education in the capital. The remaining £20m will be used to support the creation of new jobs on the capital’s high streets.
In spring 2016, Government announcement a further competitive round of funding worth £1.2bn would be available to LEPs. A snapshot of London's bid has been published on this page and an annoucement on allocations will follow in the Autumn when more detail will be made available here.