It has been over three months since the publication of the UK's modern Industrial Strategy (IS) White Paper. Places have been prioritised, sector plans published, and initiatives announced to deliver on the Government's growth mission.
The IS's overt commitment to place-based growth, taken alongside the Devolution White Paper, means that the spotlight is now on Mayoral Strategic Authorities (MSAs) as they begin to fulfil their pending statutory duty to produce Local Growth Plans (LGPs). These plans are where strategy will meet delivery, providing a platform for MSAs' to articulate local priorities, outline investment pipelines, and establish shared ambitions with central government. So, the question is, how can local government balance the national priorities articulated within the IS with their own regional strengths and distinct needs?
Inclusive growth in a complex landscape
The West Midlands Combined Authority (WMCA) was quickly out of the blocks in publishing its LGP. It offers an ambitious agenda, meshing the local perspective with the national strategy and a deeply place-based focus that gives equal weight to the people, heritage and identity of the region. If other MSA's take a similar approach, LGPs will provide not just a blueprint for economic growth, but also a vision rooted in the history of the region, and the communities that have shaped it. But what about the places that haven't been asked to develop an LGP? What approach should they take to the growth mission?
The end of the UK Shared Prosperity Fund in March 2026, and impending local government reform, has created a vast amount of uncertainty at the regional and local level. Therefore, in setting their ambitious agendas, all forms of local government must look to prioritise their most pressing needs, meaning they are faced with a strategic conundrum: how to balance the pursuit of high growth sectors whilst also supporting the foundational economy.
A balancing act: High-growth ambitions vs. foundational support
If strategies lean too heavily toward high-growth sectors, there is a danger of marginalising the very communities and enterprises that have built regional strengths. Conversely, if they focus too much on the foundational economy, they risk missing out on opportunities to capitalise on central government investment, and the wider growth potential on offer.
For MSAs, the trade-off is less pronounced, as Government support minimises the opportunity cost associated with an inclusive strategy. For example, WMCA has emerged as one of the stronger beneficiaries of the Industrial Strategy. It has been selected for several flagship national initiatives: it is chosen to be one of the locations for the British Business Bank's new Cluster Champions programme and the area has been recognised as a national leader in Advanced Manufacturing, Clean Energy, Financial Services, Life Sciences, and Professional and Business Services. In addition, the recently announced Local Innovation Partnerships Fund has earmarked £30 million for each MSA to grow their innovation ecosystems. However, even with this support, MSA's are encountering structural limitations, with WMCA making a clear call for greater central government support within their LGP.
The phrase "winners and losers" has been avoided by Government, but prioritisation is vital within the context of current funding constraints. Support cannot be equal. This raises important questions about how non-mayoral combined authorities, and local authorities, will fare in what is becoming an increasingly competitive environment. Despite laying out its commitment to providing targeted, long-term local growth funding, the Government is yet to provide details on its allocation. Whilst the Industrial Strategy does make it clear that they are critical partners in identifying and supporting local strengths, these authorities will inevitably be faced with more significant trade-offs, with funding and strategic focus clearly concentrated on MSA's.
A key strategic decision for local authorities will therefore be how they approach their own prioritisation. Many local authorities remain on the periphery of the IS-8 discussion, and so these areas must now consider whether to focus on the national agenda or adopt a differentiated approach to economic growth. Should they concentrate business support on the IS-8 sectors where they have a competitive advantage? Or should they diversify their offering across the wider economy, capitalising on other sectors, such as the Visitor Economy? This decision will not only shape their access to national support and partnerships, but also the long-term resilience and identity of their local economies.
From diagnosis to delivery: A blueprint for inclusive local growth
Many local authorities are already answering these questions, proactively developing economic strategies to ensure they remain part of the conversation. These efforts reflect a clear understanding: that influence, and impact are not solely determined by formal structures, but by readiness, vision, and the ability to act.
To drive long-term, inclusive economic growth, local government must prioritise acting to address the most critical market failures in the local area. By identifying where supply is not meeting demand – whether that be in skills, business support or housing – local authorities can design targeted interventions centred around strategic priorities. Tackling this misalignment will not only unify local authorities around a common goal but enable local leaders to set a clear strategic direction and optimise existing governance structures to support the pursuit of ambitious objectives.
However, resolving current inefficiencies is only part of the equation. Local authorities must also articulate a forward-looking economic vision, one that is underpinned by specific economic development priorities and measurable outcomes. Economic strategies must, therefore, be designed to bridge the gap between the current state, and an optimal future state – or in other words, lay out a pathway to get from A to B.
Yet, with a limited pool of resources, local authorities will need to leverage a strategic partnership with business to address gaps in supply. Whether it be through investing in local infrastructure, supporting skills development, or facilitating technology transfer, the private sector can not only correct for market failures, but create the foundations for long-term economic growth.
Seizing the moment: A new chapter for local growth
As the next wave of LGPs are drafted, local leaders face a defining moment. How they balance national objectives with their local needs will set the tone for the next phase of place-based economic growth. It remains to be seen how non-mayoral combined authorities and local authorities will navigate the strategic challenge, and how their approaches will differ based on the level of recognition afforded to them through the Industrial Strategy.
Whilst the complexities of local government reorganisation and an impending funding cliff-edge create an environment of uncertainty, one thing is for sure: we have a unique opportunity to reset the local growth agenda right now. By embracing a strategic partnership with the private sector, local government can better pursue national economic priorities, whilst ensuring no places are left behind.
Paige Portal is senior account director, Henham Strategy
