Next month’s Budget will have economic growth as its theme. And the General Election campaign – of which the Budget is an opening shot – will feature much talk of which party has the best plan to get Britain growing.
Quite right too, because for years now UK growth has been too slow to finance the standard of living we currently have, let alone to provide the more prosperous future we all want.
Local government must have a prominent place in any plan for growth. Because economic growth does not happen at an abstract, national level. All growth is local – it happens when employers create new jobs, or when investors build new facilities, or when companies expand their production in particular places. There is no national growth without local growth. And just as the nation can be run in ways that are either good for growth or damaging to growth, so can particular places.
Every place is different with its own unique set of assets in terms of geography, history, infrastructure, workforce, institutions like universities and colleges, culture and people. And so policies need to be different between places to make the best of their opportunities and overcome difficulties.
I sense the tide is turning back strongly to admit local leadership in driving economic growth. But I would say to local leaders: don’t look to do it alone.
The squeeze in the finances of local government has damaged the economic development functions of councils. I was proud to be – in succession to Michael Heseltine (see News Analysis p10-11 for more on him...) and succeeded by Judith Blake – patron of the Institute of Economic Development, the membership body for local growth professionals.
There is a wealth of talent among people who know their areas inside and out and know what is needed for them to prosper. Local enterprise partnerships (LEPs) did outstanding work in bringing local businesses and other economic leaders like universities together with local councils to improve the economic prospects of their areas. But budgets have been cut, the LEPs first sidelined and then condemned, without a better alternative.
Even worse has been the retreat from backing local places to set out their own direction for their area. I co-commissioned Michael Heseltine to write a report, No Stone Unturned, which resulted in the Local Growth Fund: a single £12bn pot of devolved funding in which all of the projects funded were the stated priorities of each LEP to drive growth.
Yet now councils are demeaned and made to waste time applying for microscopic pots of money that entirely reflect Whitehall’s view of what it thinks they need. The abolition of the Industrial Strategy – a strategy for growth – saw with it the demise of the nascent Local Industrial Strategies on which some brilliant work was being done.
But there are beacons of light which point the way to local places having a big role to play in our national drive for growth. The biggest focus of the mayoral combined authorities from their inception in 2016 has been on local economic growth. All of the devolution deals establishing them involve an investment fund for local determination.
Their powers have steadily grown – the recent trailblazer deals with the West Midlands and Greater Manchester commit to a single financial settlement from central Government in the next Spending Review. The number of mayoral combined authorities is growing – by this May there will be 12, representing most of England’s biggest industrial areas.
I’m also encouraged by the fact that in many areas Local Industrial Strategies have continued despite the national hex on them.
I sense the tide is turning back strongly to admit local leadership in driving economic growth. But I would say to local leaders: don’t look to do it alone. Creating the conditions for sustained local growth is not something that can only be done locally. It requires an activist partnership between local leaders and national leaders. Whether it is on skills, infrastructure, innovation funding, or business support, these are areas in which local strategies need to combine with national strategy to succeed.
That’s why I favour the national/local ‘deal’ approach over a ‘devolve and forget’ model. We really are all in this together and central Government should be as engaged with the prosperity of particular places as it is with the future prospects of the economy as a whole.
Conservative MP Greg Clark is a former levelling up secretary
X – @GregClarkMP
