It is well established that place must be central to any industrial strategy. It is a theme that has reverberated throughout local government and beyond since prime minister Theresa May announced her landmark plan to ‘drive growth across the country’ last month. Business secretary Greg Clark says it himself in his foreword to Localis’ latest report, The making of an industrial strategy: taking back control locally.
The report, which The MJ understands has had close support from Mr Clark’s Department for Business, Energy and Industrial Strategy, demands radical action, setting out the blueprints for ‘the biggest single domestic transfer of power since the establishment of the Scottish Parliament’.
It calls for an end to the deal-making process of devolution that has all but brought the agenda to its knees since the new Government assumed power in the wake of the EU referendum. Instead, areas should be given 18 months to devise ‘strategic authorities’ or risk having them imposed by ministers – who are likely to opt for the form of contentious mayoral combined authorities.
Highlighting the fact two-thirds of the country does not have a functioning strategic authority, Localis insists these should ‘span every village, town and city in England’.
Such strategic authorities should automatically be granted a raft of powers, ranging from the ability to process and issue visa applications and the devolution of fiscal controls to ‘break out of the national funding trap currently choking off money to public services and infrastructure,’ to leading skills reviews and commanding planning and transport strategies.
‘Every place is in a tough global fight for future economic prosperity,’ the report said. ‘Almost all places can explain the historic industries which gave them an economic purpose: the mines of Durham, the port of Liverpool or the pot banks of Stoke-on-Trent. Unfortunately, only a few have an industrial strategy for the future.’
The report claims that the Government’s stated ambition of an industrial strategy which ‘improves the prosperity of all places and people fits poorly with the patchwork approach created by the devolution deal process’.
Localis chief executive Liam Booth-Smith told The MJ it was time to ‘find a way of moving the conversation forward’.
‘It is too important to wait for very parochial political interests to stall necessary progress,’ he said. ‘Residents cannot afford to indulge and wait around.
‘Initially, devolution proposals sounded like a good deal, but then the attrition of negotiation inevitably took over. Most people in local government want to work collaboratively and make things happen. The deal-making process was a necessary first step to this. Forcing councils initially would have been quite disruptive.
‘Greg Clark, who was communities secretary at the time, proved that if areas can get the politics right, then the Government is willing to play ball. The general perception now, however, is that it is the right time to subsume devolution as part of the industrial strategy and use it as a tool to drive growth and greater prosperity.’
The report comes just a week after the Institute for Government claimed the Government had damaged effective devolution and economic performance with its ‘endless tinkering’ with regional governance.
The Localis report identifies two sets of places that require special intervention. First, it points to places that are ‘stifled’. These are areas that are growing quickly, but where growth is restricted by boundaries. These places should ‘have the right to petition government for a boundary expansion,’ according to the report.
The 10 most ‘stifled’ places in England
- Northampton
- Bradford
- Medway
- Leicester
- Plymouth
- Swindon
- Canterbury
- Coventry
- Maidstone
- Bedford
Areas still dealing with the ‘fallout of the industrial trauma of the 1980s’ have been termed the ‘stuck’. These are small towns and rural areas cut adrift of big cities.
The 10 most ‘stuck’ places in England
- Isle of Wight
- Blackpool
- Tendering
- King’s Lynn and West Norfolk
- East Lindsey
- North Norfolk
- Torbay
- North Lincolnshire
- West Lancashire
- Wyre
Localis urged ministers to replace European structural funds and the local growth fund with a single pot – an accelerated growth fund. Under the proposals, central government would set the national priorities that the fund would target, but called for its allocation mechanism to be devolved to strategic authorities.
If the industrial strategy is to be a success, Localis argue that places should be given greater freedoms over their finances. ‘For local leaders to govern a place to its full economic potential, they must be given greater fiscal flexibilities, particularly if they are being encouraged to take a lead on revenue generation,’ it read.
The paper also pinpoints functioning local housing economies, quality education systems and identifiable cultures as vital ingredients in developing successful and attractive places to live and work.
Mr Booth-Smith said that, so far, the Government had been ‘very open and supportive’ of the work. However, he accepted ministers would not agree with everything in the report.
The MJ understands regional immigration controls – a key recommendation of the report Localis believes would empower places to respond to shortages in local labour force capacity – is a particular sticking point for Number 10. Indeed, speaking to the Conservative Spring Conference last week, Mrs May stressed ‘immigration must be on the national interest’.
The proposed strategic authorities would include already established combined authorities, but also be open to the reinstating of elected regional assemblies or bolstered county councils.
Simon Edwards, director of the County Councils’ Network, praised the report’s focus on small towns and rural areas.
He said: ‘With this Government placing a heavy emphasis on raising England’s productivity through the industrial strategy, its domestic economic policy rests on whether counties’ potential is tapped into. Despite contributing 41% of England’s GVA, counties’ productivity is below the national average, and they have sizeable challenges in relation to infrastructure gaps, unaffordable housing and growing skills gaps that must be tackled.
‘Localis’ report, and its emphasis on counties as major strategic authorities built around county geographies, rightly recognises counties’ central importance to any industrial strategy.
‘Devolving power and resources to counties at scale – rather than a heavy emphasis on the major cities and bureaucratic governance – will help rebalance the country and deliver on the Government’s aims of its industrial strategy and higher regional productivity.’
Mr Booth-Smith stressed that any industrial strategy had to be focused on the long-term. ‘This is not about the next 10 years,’ he said. ‘It is about the 10 years after that.’
‘If I am being honest, you could devolve all these tools to some places and it still wouldn’t make a difference. That is the nature of growth. It discriminates. What is not acceptable is not giving all places the chance.’
Strategic authorities should automatically be devolved powers over:
- Processing and issuing visa applications for people who want to work and study in the area
- Leading area reviews of skills
- Spatial planning
- Granting planning permission on sites of strategic importance
- Establishing development corporations
- Pooling CPO
- Developing medium and long-term transport strategies
- Local bus and suburban rail services, with franchising powers
- Introducing a place-wide community infrastructure levy