Many English regions are desperate for new private sector investment Senior ministers are to set out their vision for promoting economic growth across England and assisting areas set to be worst hit by spending cuts.
Business Secretary Vince Cable will outline details of local enterprise partnerships chosen to replace existing regional development agencies by 2012.
And deputy prime minister Nick Clegg will spell out how the coalition’s new £1.4bn regional growth fund will work.
Labour say the plan is flawed and will not camouflage the impact of the cuts.
The government announced in May that the eight regional development agencies (RDAs) established by John Prescott in 1999 would be abolished and replaced by joint local authority and business partnerships.
Unveiling a white paper on regional growth in Parliament, Mr Cable will reveal which of the 56 bidding groups have been successful.
The BBC understands about 23 are expected to be given the go-ahead.
Ministers say the new bodies – which will spearhead regeneration projects, seek to attract inward invest and promote skills development – will cost less to run and be more accountable to local residents than their predecessors.
But critics say that, unlike RDAs, they will not receive any central government funding and councils – which are facing a 7% cut in their annual grants – will be hard-pressed to deliver an equivalent level of service.
Asked about the subject on Wednesday, Prime Minister David Cameron said the LEP proposals received so far were “extremely encouraging” but it was important that the assets owned and operated by the RDAs were properly managed during the changeover.
“The transition from the regional development agencies to the local enterprise partnerships has to be handled carefully,” he told MPs.
“I think they [LEPs] will lead to more…local control rather than distant regions that people don’t identify with.”
The eight RDAs outside London have a combined budget of £1.1bn this year after their funding was cut by £270m.
Although many of their functions are expected to transfer to the new organisations, some could taken on by government departments and up to 2,700 jobs are at risk as a result of the shake-up.
The new LEPs are among organisations which will be encouraged to bid for funding from the regional growth fund, the coalition’s flagship initiative to support jobs and business in some of the most deprived areas.
During a visit to Manchester, Mr Clegg – accompanied by former Conservative deputy prime minister Lord Heseltine – will give details about how firms and individuals will be able to bid for money and what conditions will be attached.
Mr Clegg has said the money – to be spread out between 2010 and 2013 – will help boost diversification of business in those areas of England with higher than average levels of public sector employment – such as the North East, and parts of the North West and the Midlands.
An estimated 490,000 public sector jobs are expected to go as a result of cuts announced by Chancellor George Osborne last week and recent BBC research suggested Middlesbrough, Mansfield and Stoke-on-Trent are among the towns most vulnerable to economic shocks.
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