Too many blurred lines

By Nigel Wilcox | 26 November 2019

Predictably the General Election ‘rhetoric’ has touched on left-behind towns and the continuing debate on how best to address those areas of the UK which, for structural economic reasons, have fallen behind in terms of income and employment and struggled to find a new raison d’etre.

It is tempting to consider silver bullet solutions – but in practice they do not exist. What is needed is a long-term strategy which is applied consistently. In order for this to occur there is a need for a strong foundation in terms of structure. In England, especially, this is lacking. Regional Development Agencies (RDAs) were disbanded in 2012. For some they had become a symbol of unaccountable largesse and that may have been so. The simple problem is that they were never adequately replaced.

The shorthand explanation is they were replaced by local enterprise partnerships (LEPs) but, in fact, that is not really the case. Of course, LEPs were being created as the RDAs were being abolished in 2010 – but the LEPs, particularly at the outset, were simply a collective of the local private and public sector who formed a board and cajoled the local authorities to provide some resource to allow them to undertake any work.

LEPs have subsequently gained more resource but as an entity they have never held any statutory powers. The result is that whilst they have claimed to establish a strategic vision for areas, the local organisations with any teeth – planning policy, land holdings, compulsory purchase powers, revenue generation, ability to create commercial structures and so on – were always the local authorities.

Roll forward to 2019 and these local areas have therefore lost RDAs (total annual budget £2 billion by 2005-06) and the remaining organisations with any local teeth, the local authorities, have since lost 60p in the £1 of their funding capability. A complete abolition of central funding is on the horizon but Brexit has prevented the publication of even a sketch of a plan. Small wonder that many regions have suffered.

The bright light has been devolution and the establishment of the combined authority (CA). CAs that have agreed to elect a Mayor have been granted significant ‘devolution deals’ and their make-up, involving the local authorities with the powers identified above, means
that these are organisations with teeth.

It seems that CAs have a scale, significance and established statutory powers suitable for becoming the vehicle for economic development in the future but in the meantime England has managed to create a dazzling array of bodies and schemes which are confusing even to seasoned commentators.

In organisational terms there are LEPs and CAs not always with co-terminus boundaries. In locations where LEPs and CAs do have co-terminus boundaries the role of the LEP/LEP Board is somewhat redundant – in areas where the boundary differs there is a recipe for conflict.

Then there are the mechanisms of funding. England now has City Deals (in operation but phased out), Growth Deals (replacing City Deals where there is no elected Mayor) and Devolution Deals (where there is a Metro Mayor). Into this mix there is now the Stronger Town Fund offering Town Deals – often to towns already within areas covered by one of the other deals. On top of that there are competitions for Future High Street Fund, Strength in Places Fund, Coastal Communities Fund and more.

All these involve tremendous amounts of resources being invested to create bids to demonstrate need and future strategy. Finally, every area is carefully constructing Local Industrial Strategies (LIS) with a hope that these will be useful in securing funds from the trailed but by no means certain Shared Prosperity Fund (suggested as a replacement for regional European funding). These LIS are replacing the Strategic Economic Plans written five years ago – but supposed to cover strategy for 10 years.

The message to a future government is clear. The situation is a mess and small wonder economic development has failed to deliver in so many places. The landscape needs to be simplified. There needs to be certainty of funding over the medium term. Combined authorities seem to provide the best solution currently on offer. Whatever is selected as an approach it needs to be in place for the long term.

Nigel Wilcock is executive director of the Institute of Economic Development (IED)

The IED is hosting its annual conference on 4 December Challenge of Change: economic strategies for a new era.

Landscape to deliver growth 'needs simplified'

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