Growth solution’s key component

By Robin Tuddenham | 04 October 2022

The 2022 Solace Summit takes place in Birmingham next week. Ahead of the flagship event on 12-14 October, Robin Tuddenham says a properly funded, truly empowered local government can unlock local growth, ushering in a new approach for a new era.

The new Prime Minister has made it clear from her leadership campaign through to taking up office that growth and the economy are her top priority and that she is prepared to act decisively. Recent events have shown her degree of intent in that regard. What does this mean for local government and public services, and what might the sector’s position be?

Going into the chancellor’s recent ‘fiscal event’, the UK was set to have the slowest growth in the G7 group of countries, while the Bank of England had warned our economy may already be in recession. The economic outlook is now looking even more challenging following the reaction of the financial markets to the chancellor’s announcements.

The chancellor said in his speech: ‘We need a new approach for a new era’. And, given that over the last 10 years the UK economy has averaged 1.5% annual growth, compared with the long-term trend of 2.45% between 1949 and 2021, there is certainly evidence to support him making that case.

What we have seen over many years is a relatively lacklustre economy, with over-centralised policies, multiple funding pots, plans and schemes created and driven top-down from Whitehall by ministers and civil servants. Perhaps this isn’t a coincidence.

Positively, we have seen surges of interest and activity on devolution, with the creation of mayoral combined authorities, and some long-term devolution deals. While these have still been beset by complexity and different funding streams, this level of trust in place at scale has, from the perspective of one of the more recent devolution deals in West Yorkshire, led to impact and focus in key areas such as transport, climate and skills.

What we need to develop now as a sector is a serious proposition for growth that aligns sustainable and thriving cities and towns with an ability to overcome the barriers that impact on economic development and entrepreneurship.

Local government is a key part of the solution, and we should work alongside business leaders and partners to be bold and unapologetic about our pivotal role in connectivity, skills and innovation – which ultimately enable higher wages and tax revenue.

One of the ways we can engage with Government on this is in response to the proposals on investment zones. The Government is already in talks with 38 areas over streamlining planning processes, time-limited tax reliefs and creating a single funding pot to be spent on driving growth locally.

It would be a missed opportunity if the powers on offer are tied to governance arrangements with a one-size-fits-all model.

According to the Government’s Plan for Growth, investment zones ‘aim to drive growth and unlock housing’ – an aspiration for every area, so why not give every place the powers to do that instead of a select few?

More fundamentally, I believe we need to engage in a serious conversation about supply-side economics with Whitehall, as the role of local government, the NHS and wider public services in addressing supply-side issues is underplayed but essential, for it to succeed.

One of the challenges Government faces is that supply-side interventions take time, and if they truly intend to be bold, this needs to be accepted.

Let’s start with an honest conversation about productivity and work.

According to the Office for National Statistics, more than half a million people in their fifties and sixties have left the work market since 2020, often due to long-term health conditions, meaning our rate of economic inactivity has now hit a six-year high of 21.7%.

Viewing economy, health and wellbeing as one and resetting the strategic conversation on skills, apprenticeships and models of work has to start now.

In relation to work, the ‘productivity potential’, which embraces how work has changed, is an opportunity, not a threat. Simply put, we are not going to return to pre-Covid work patterns. Local government needs a proposition on this, as a catalyst in place and as a major employer.

Closing regional productivity gaps could add around £71.6bn to the UK total GDP in 2023 alone, according to PwC. But, if we are to achieve this, councils, with their unique vantage point and ability to harness local economies and wellbeing in their local areas, must play a key role.

As the semi-invisible glue that binds places together and connects the public, voluntary and private sectors, local government is an essential component of growth.

A properly funded, truly empowered local government,which can train people in the right skills, get workers into well-paid jobs, and help build new homes, roads, and other infrastructure, can unlock local growth, ushering in a new approach for a new era. We stand ready to seize these opportunities and drive the growth this country so sorely needs.

Robin Tuddenham is Solace spokesperson for economic prosperity, and chief executive of Calderdale MBC

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Local economies Finance Solace Economic growth Devolution Fiscal devolution Cost of living