Insufficient input from small business and lack of clarity over how new Local Enterprise Partnerships will be funded and operated risk undermining their effectiveness, warn employer bodies.
LEPs, made up of representatives from business, local authorities and cities, are being introduced to replace Regional Development Agencies and local Business Link services, which are due to be abolished next year. So far the coalition government has received 59 bids from groups wanting to set them up.
But the Federation of Small Businesses (FSB) has written to the Communities Secretary Eric Pickles outlining concerns that small businesses have not been adequately represented in some bids.
Mike Cherry, the FSB's policy chairman, said: "The government will undoubtedly have received many strong proposals, but we are concerned that in some there has been a lack of proper business engagement. We are today urging the government to ensure, where there has been insufficient business input, that they are asked to go away and work further with business to set out a plan with enterprise involved."
The Forum of Private Business (FPB) was also concerned that the number of bids mean that LEPs could be "too small to be effective", too "parochial" or even "toothless talking shops", however.
The FPB's chief executive Phil Orford said: "The danger is a return to the parochial approach to business support of the 1980s and 90s. Close-knit networking is not enough and prescribed, vaguely-defined business support is not practical or cost-effective."
Business owners needed to be armed with the full information required to exercise proper choice and LEPs must focus on providing services that they actually wanted, he warned.
"Impartial guidance on the real support that is available would be one such service. Helping businesses to access the right training would be another, particularly as firms seek to recruit and grow," Orford said.
One of the key concerns at the moment, however, was that small businesses could end up paying more in local taxation for poorer services. A survey of the Forum's Training and Skills panel revealed that the majority wanted training to be a key remit of LEPs on top of providing local infrastructure improvements and supporting economic growth.
Some 56% of respondents felt it important that the new bodies provide local named advisors who could help with training requirements, while about half were keen that training provision be included as part of a business support package. A further 46% called for regular consultation on local training and business support issues, while 42% requested local training to be provided in one place.
Another 38% recommended that training be provided by larger local companies, while 37% believed that the creation of group training networks would be a positive move.
