Tom Stannard, Director of Policy and Communications, Blackburn with Darwen Borough Council
The Chancellor is all about growth. Plan A, we are told, will deliver it, without question. The Business Secretary, likewise, is all about growth. His new plans for Local Enterprise Partnerships (LEPs) and their associated acronym-laden toolbags of the Regional Growth Fund (RGF), new Business Improvement Districts (BIDs) and Enterprise Zones (EZs), will provide the means to the Chancellor’s ends. The economic resurgence will be built upon the laudable foundations of the “march of the makers” – reflecting surely the frequently forgotten manufacturing ambitions of the North of England. And coupled with a smaller state, and a resurgence of New Public Management-inspired shrinkage, we are now back on the right road.
But how rocky might that road be? There is one simple answer to the proposition that local government can drive economic growth, and Obama had it in a nutshell. Yes we can. And in many parts of theUK, yes we do. The rocks on the road almost always come from local context, and it is this, and the capacity, legitimacy and energy of local government to understand and adapt to it, that is critical to securing growth in tough times. London’s local government could not drive economic growth if the growth model required for Pennine Lancashire was imposed on the South East of England, and nor could Pennine Lancashire grow if the reverse was true.
Local government is currently stuck between competing visions and policy tensions that run to the heart of the deliverability of growth over the medium term. In the blue corner, the coalition is all Plan A. In the soft fuzzy reddish corner, Her Majesty’s Opposition is all talk of Plan B – which, to be clear, is not against state contraction but for it on a different timescale – and the referee in the centre of the ring is local government. The ring itself is the economy, stupid. National tussles over the structures of LEPs, the competition for EZ status and public remonstrating over Plan A vs Plan B are often viewed with bewilderment by the same private sector that willingly partners with us to drive growth at a local level, as Councils are invited by this policy framework to fight governance battles above local growth objectives.
The think tank community has joined this scrappy tension in policy. A recent contribution from KPMG described the “brilliant local authority of the future” https://member.lgiu.org.uk/cpsp/Documents/Policy%20and%20practice/The%20Brilliant%20Local%20Authority%20of%20the%20Future.pdf sketching a managerial vision of NPM-style shrinkage coupled with business management techniques for councils (and limited mention of growth). A recent contribution from the New Local Government Network, http://www.nlgn.org.uk/public/2011/future-councils-life-after-the-spending-cuts/, forecasts 2020 “ could… leave local authorities in the same kind of position as the Californian state government: struggling to provide services in the face of high demands, low income and increased direct democracy.” A quick glance at the recent growth record ofCalifornia shows the perilous position this might create.
Much of this stuff obsesses local government types, but we neglect at our peril local government’s future role as the honest arbiter in local growth debates. Localism must reign mighty in this for the future. In Pennine Lancashire, my own authority has effected £33M of budget cuts, representing nearly a thousand “new” job losses, against a backdrop of a local labour market with close to 32% of our 88,000 working age population already economically inactive, 24% of whom – or some 21,000 people – do not want to seek work, and display structural and familial characteristics typical of one of the most acutely deprived areas of the UK. We have created strong cohesion against this unimaginably tough backdrop – and had no riots recently despite many of the characteristics of economic and social fracture in our communities.
Will a holiday from, or cessation of the 50p income tax rate really drive growth against this local backdrop? In a town centre where the Council willingly underwrote over a third of the capital costs of our new shopping centre in order to secure private sector partners and without which the rebuild would never have happened alone? And what of the benefits reform package hitting growth prospects in areas of still hardening deprivation?
Where might localism sit in reforms to infrastructure bidding and planning? When we bid for infrastructure funds we follow the same rules as they do inBasingstoke- and bizarrely have to pass the same economic and cost benefit criteria. An investment process which takes account of local conditions would surely be more “localist”. Likewise proposed changes to the planning system, which risk becoming a very blunt tool, and might better reflect a loose national framework with a dash of localism in terms of local plan and policy-making to reflect local conditions.
If local government can drive local economic growth, I offer a few provocations given these challenges, namely:
- Local government may be able to better drive local growth if we are encouraged more to focus on growth strategies appropriate to the locality, than further governance bun-fights
- Government therefore needs to display a preparedness to entertain more imaginative governance solutions in the event the LEP model does not deliver the Plan A growth ambition as rapidly as the Chancellor envisages
- Local growth can be hampered in part by the severity of local structural conditions that mitigate against it – a tough private sector environment, a challenging worklessness baseline, and a contracted public service offer means more than just a rethink in areas where demonstrably the public sector has needed to be more assertive in driving growth in the past
- Booms and busts do not happen fairly or equitably, and the “south-east centric” view of this should be continually challenged. Areas like Pennine Lancashire struggled with sustainable job growth to match our local ambition during the period the South East of England would recognise as the “boom”. Many parts of the country do not experience “booms” in the same way and therefore fall that bit harder in the bust.
- Partnering is more important than ever, and FE/HE and skills provision must go hand in glove with our business partnerships. Many of the most productive partnerships will not happen in the vaunted corridors of LEP discussions but in practical brokerage at the local level – which is precisely what, against the odds, has delivered much of Pennine Lancashire’s economic renewal over the past 10 years.
At the outset I described the capacity, legitimacy and energy of local government to address these challenges. It is these factors that in Pennine Lancashire have orchestrated some of the most productive partnerships in the country, delivering town centre regeneration, job creation and tailored support for chronic worklessness across the sub region, frequently against the odds, and frequently out of synch with national boom and bust cycles. This capacity, legitimacy and energy of local government must be nurtured, and increasingly Government must recognise it as a productive contributor to local growth. Without local government at the forefront of this orchestration, the march of the makers risks becoming a slow plod, and might yet stop.