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The pursuit of growth is the ‘number one' mission of this government, like many of those before it.Most economic activity is local, therefore kickstarting the economy requires, as so often acknowledged, devolution of the British state and an end to the top-down centralised micro-management of the economy out of the corridors of Westminster.Local growth can deliver tangible outcomes for communities through generating well-paid jobs in local economies, building new homes, supporting new business opportunities and ensuring access to good local services.But, unfortunately, the current architecture of policies and programmes put in place to drive forward growth fails to recognise the strategic capabilities of local government and its crucial role as a convenor of local economic stakeholders and partnerships. The continued allegiance to the model of city-regions, alongside devolution to the privileged tier of strategic mayoral authorities and the generation of large unitary authorities through local reform, as well as the narrow focus on the ‘IS8' – Industrial Strategy eight high-growth sectors identified by the UK Government to drive economic growth, productivity, and investment – ignores differences in the economic and social structures of places and the characteristics of individual industry hubs.The performance of the foundational economy cannot be divorced from the needs of communities, the sustainability of our economies and, at the end of the day, the attractiveness of places to all forms of business.Coming after the cumulative impacts on communities of a sustained period of austerity, there is a real risk of alienation if this misdirected pursuit of growth without any attention to the local drivers of economic activity continues. How many authorities can all have high-tech corridors, data centres, creative industries poles and new motorway intersections?There is little doubt that decades of centralisation in the British state has to be challenged. But even setting aside the continued bureaucratisation of existing devolution deals, economic policy cannot be managed solely from a strategic mayoral office. Strategic authorities lack the local business and neighbourhood intelligence, and the programme capacity to drive the growth agenda without local government involvement.And industry needs to vary by place. While financial and professional services benefit from agglomeration, manufacturing supply chains are not typically concentrated in city centres or confined to the boundaries of combined authorities, while business support for SMEs will always be best delivered through localised mechanisms.In other words, the messy realities of economic constellations of cities, towns and villages, of urban and rural, do not correspond with the neat boundaries of any single tier or sphere of governance, but require the bringing together of alternative and targeted place-sensitive partnerships across multiple tiers and spheres of governance and the economy.But equally, the strategic policy obsession with the high priority ‘IS8' risks crowding out the foundational economy, the everyday goods and services, such as social care, affordable housing, food and local transport, that account for large sections of the lived economy and shape our everyday experiences of the places in which we live and work.The performance of the foundational economy cannot be divorced from the needs of communities, the sustainability of our economies and, at the end of the day, the attractiveness of places to all forms of business.Take, for example, the ending of the UK Shared Prosperity Fund in March 2026. Notwithstanding the criticisms of that scheme, the cessation of the income has undoubtedly had an impact on funding for people and skills across deprived areas.While the Local Growth Fund and Pride in Place funding is to be welcomed these are heavily weighted towards capital spending. At the same time, the Local Growth Fund is only made available to mayoral strategic authorities. Prioritising areas with mayors creates greater economic and social disparity.Local government cannot be simply reduced to ‘deliverers' put to work for strategic authorities. Yet, current framings of devolution and the Industrial Strategy risks just that, resigning councils to getting land ready for investment and competing for funds from strategic authorities. Devolution, if done to, rather than with local government, disconnects the local from the governance of the economy and puts further strains on local communities.In short, local government's capacities must be realigned with the growth agenda. Inclusive growth depends on joined-up working across all tiers of government and the public and private sectors. Where devolution works, local government is an active partner to strategic authorities, convening public, voluntary, community and private stakeholders.To sustain that role, government must reframe current policy and invest in local government's capacity and agency. Ending competitive funding, tackling social care and recognising persistent funding gaps would be a step in the right direction. Growth driven from the bottom-up, rooted in local knowledge, will be stronger and more sustainable for all our communities.Mo Baines is chief executive of the Association for Public Service Excellence (APSE) and visiting professor at the University of Staffordshire's Centre for Business, Innovation and the Regions. This article was co-authored by Mark Gregory, visiting professor of business economics, Steven Griggs, professor of digital, tech, innovation and business and Ryan Fox, research co-ordinator – Know Your Place, all at the University of StaffordshirePutting Growth in its Place, a research collaboration with APSE and the University of Staffordshire, will be published in late August

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DEVOLUTION

Government must invest in sector's capacity and agency

By Mo Baines | 08 June 2026

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