The LEPs will address issues such as planning and housing as well as enterprise and supporting business start-ups. Other roles currently carried out by the RDAs will be led nationally, such as inward investment, sector leadership, business support, innovation and access to finance.

Vince Cable, business secretary, says: ‘We want a structure that reflects the genuine interests and commitment of enterprise, local councils and other stakeholders like universities and colleges. Local Enterprise Partnerships will provide that vision and then take on the task of renewing local economies and tackling local barriers to growth.’

Sir Harry Studholme, chairman of South West Regional Development Agency, says: ‘There is still a range of important detail to be clarified – precisely what work will be carried out locally and nationally. RDAs accept this change is coming; we are ready to help with the transition.’

The government has also announced a £1 billion Regional Growth Fund to help areas most affected by public spending cuts.

However, David Frost, director general of the British Chambers of Commerce says: ‘While business will wait to see detailed plans on the proposed Regional Growth Fund, what’s clear from the outset is that the fund will have significantly less resources to support business growth than previous arrangements.

‘While [we are] fully supportive of the government’s drive to reduce the UK’s deficit, we believe that investment in the business environment must remain a key priority – especially in those areas of the country that have not seen significant private-sector growth.’