The Realities, Challenges and Strengths of the External Funding Environment at LEP Level

This project forms part of a collaboration between City-REDI at the University of Birmingham and the Smart Specialisation Hub with the aim of better understanding the environment for innovation and specialisation. 

Based on a combination of web search, quantitative and qualitative analysis and featuring case studies of major projects, this project will produce a report that investigates LEPs and their partners’ experiences of securing funding, seeking to shed light on the challenges they face as well as the strengths of their approaches. It will also consider how the funding secured relates to LEPs’ economic strategies and emerging industrial strategies, examining whether the funding available matches the needs and requirements at local level.

There are currently no other reports providing this information in one place. In the context of the rapidly changing regional development environment, the report is particularly timely. It will provide LEPs with up-to date analysis of the state of play of funding at local level and support them in developing more effective funding strategies. It is also envisaged that the project will result in academic publications and feed into the work of the Midlands Engine Economic Observatory based at the University of Birmingham and Nottingham Trent University.


  1. Identify different innovation funding sources/programmes available to LEPs and their partners (e.g. Growth, City Deal, ERDF, H2020, UKRI). 
  2. Estimate the value of funding secured by LEPs and their partners over the recent past, providing insight into how the value of funding secured at LEP-level differs.
  3. Conduct a survey of all LEPs as well as qualitative interviews with decision makers in 13 case study LEPs identify to better understand the realities of the current external funding environment at LEP level. In particular, the report will identify the key challenges faced by LEPs and their partners in seeking to secure external funding for projects as well as strengths of the approaches adopted by different LEPs.

Final Report

This report found:

  • Comparing funding allocations at LEP level is complicated by unequal LEP geographies. 
  • The value of funding awarded at LEP level differs considerably by LEP and by funding programme. 
  • The LEPs, which have performed strongly in terms of total allocations for central government funding, are Greater Manchester, London and Leeds City Region. Small, rural LEPs struggle the most to obtain funding. Whilst Greater Manchester stands out outside of London, combined funding for the West Midlands LEPs is very similar with a similar population. 
  • ESIF funding is an important source of funding for LEPs with lower per head GDP rates such as Cornwall and the Isles of Scilly and Tees Valley. 
  • The presence of one or more research-intensive university is central to which areas have received the highest awards for Horizon2020 and research Council/Innovate UK funding, emphasising the crucial role that universities play in relation to local economic development. 
  • LEPs do not consider that obtaining external funding to deliver projects in their local areas to be their central role. Indeed, many feel this represents a distraction from their principal aims. Rather, LEPs described having an important role to play in leadership and partnership that has delivered and continues to deliver funding for their areas. 
  • Differences exist in terms of how LEPs are seeking to operate in relation to strategic direction in the external funding environment. The report suggests four different types of LEPs can be identified in this regard: direct action LEPs; collaborative, partnership LEPs; convening, supporting LEPs and internal challenge LEPs. 
  • LEPs operate in a complex and rapidly changing environment. The role that LEPs now play in developing Local Industrial Strategies as well as the increase in the number of mayoral combined authorities, and the implications of the LEP review create pressures and opportunities for LEPs. 
  • LEPs are currently experiencing challenges related to staffing, the amount of central government funding available, access to match funding, existing outcome/output requirements, alignment between different funding pots, governance arrangements, data evaluation and the ability to implement cross-LEP projects. 
  • LEPs argued for greater clarity and security regarding funding once ESIF and Growth Deal funding pots run out in 2021, greater incentives for cross-LEP projects and closer alignment between funding pots. Significantly, many LEPs interviewed advocated the creation of a single-pot based place programme. 
  • Considerable extra effort needs to be put into defining subsidiarity. It is very important that LEPs and Combined Authorities are given sufficient time to establish their structures and core responsibilities to maximise their impact and long-term outcomes. Whatever grant regime replaces ERDF and the Growth Deals, should also make it easier to implement cross-LEP projects, as innovation is highly dependent on networking.

Download and read - The Realities, Challenges and Strengths of the External Funding Environment at LEP Level

Research team

Project support

Sarah Jeffery, Centre Manager, City-REDI

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Funder/client: Smart Specialisation Hub
Timescale: November 2018 - April 2019


taylor_abigail_webProject lead: Abigail Taylor
Tel: 0121 414 9673