Making local growth happen

Anticipation is over. The mayor of Greater Manchester is now Prime Minister of the United Kingdom. And local economic growth policy must compete with the cost-of-living, defence, foreign affairs and other yet-unknown world and domestic issues that will quickly fill the new PM's days.Nor is local economic growth a quick fix. The slew of announcements this week including the creation of No 10 North is conveying the required message of national momentum and urgency, but local growth will need ongoing support and attention if new mayors and combined authorities are to make tangible progress before the end of this parliament. So, what else could be done?First, the PM needs a big beast he can trust, a fellow believer who will get things done. It's telling how much Michael Heseltine still comes into the conversation around delivering local growth; John Prescott too. Burnham needs a similar overlord to drive through local growth policy, blow up barriers and support local places to get things done. The appointment of John Healey as chancellor with a background in regional growth is positive, and close confidante Lou Haigh as first secretary of state will play an important role in the PM's team including No 10 North but will have wider responsibilities. Political support through the PM, chancellor, and first secretary is undoubtedly there, but someone with stature is needed who can focus almost solely on local growth. Should a way be found to embrace the credibility and experience of Andy Haldane and Lord Jim O'Neill – both already reported to have been providing advice?Second, where existing policy is positive, make it happen. Fiscal devolution should be accelerated – the new PM has been a leading advocate so this should not be in doubt. But it should be extended and increased if benefits are to be accrued for all. Spatial planning is perhaps less clear cut, but equally important, in linking local growth ambitions, infrastructure and housing distribution across a strategic area, bigger than a single council. Spatial development strategies should be welcomed as investment frameworks to give developers certainty and offer the opportunity to deploy new spatial planning powers to deliver an ‘infrastructure first' approach. The re-appointment of Matthew Pennycook is an encouraging sign.Thirdly, building on a new Localis study[1] assessing attempts made by central government from Thatcher to Starmer to establish local growth, the Prime Minister and his advisers should go ‘Back to the future' to understand what's worked and what has not from previous local growth policy. John Healey, in particular, has direct experience.Most immediately, they will see a clear role for business is needed. Some mayors may have a business background but there's no set role in devolution. This is a major shift. Places will need to capture their biggest economic beasts, essential both in delivering growth and providing a more active sounding board for practical growth plans that will reassure business and attract new investors.With an overriding focus on delivery, mayors and local leaders should clearly define growth priorities and deploy planning powers like Development Corporations to build private sector confidence and release new sources of infrastructure funding, while unlocking major opportunities across multiple planning boundaries. Ministerial backing will be needed to achieve this.And in addressing the growing welfare bill, the urgency for the right employment skills means that devolved powers should flow to all areas, not simply to those with mayors. Local commissioning and the integration of local skills and growth plans must offer the opportunity for all places to provide the skills that local businesses need to grow.So, the narrative of place must continue to be told, but the visible pace and delivery of change will be essential if local growth policy is not to be blown off course. And with mayoral devolution the model of choice, but with differing paces of delivery across the country, an understanding of previous practice can be invaluable if national and local objectives are to be met.Over the coming months, Localis will be monitoring progress closely, in particular the vital and irreplaceable role that business will play and how the lessons and learning of previous policy have been applied to make this version of devolution a success for all.David Godfrey is a visiting fellow at Localis and director of Quintain Consulting. [1] Back to the future? Lessons we can learn in in our quest for local economic growth was published by Localis, 23 July 2026

Title

ECONOMIC GROWTH

Making local growth happen

By David Godfrey | 23 July 2026

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