Local leadership and co-operation key to devolution success
By Paul Brown, Director, Government & Public Sector, EY
IT IS fair to say that the UK has lagged behind other countries in decentralising its governance. But in recent years, “localism” has gained momentum.
In the last Parliament, the coalition government took a number of steps to empower city regions — through the creation of local enterprise partnerships (LEPs), and City and Growth Deals — and the pace of change is quickening.
The UK is at an early stage of the devolution journey; much work still needs to be done. But the prize could be considerable. If managed well, it could help stimulate local economies to achieve higher levels of job creation and growth; improve public service outcomes through better local coordination of resources and funding; revitalise local democracy through more accountable governance; and improve the sustainability of public finances.
The prize of course for devolution in the Midlands is the potential to grow the economy by £34 billion by 2030, and by the end of this parliament there could be as many as 300,000 extra jobs. Regions perform better when the broad range of local interests is aligned around the needs of the place.
Undoubtedly, all of this will have its challenges but for this to work, it will require strong local leadership and a willingness to cooperate across multiple sectors — from central government, local authorities and other public sector organisations to private businesses, universities and civil society organisations.
Local leaders must be able to reconcile different stakeholders’ needs and interests to coalesce around a common vision and align resources and efforts which will also require re-inventing the Midlands as a brand that can command public support and recognition.
As a LEP board member, I have been working with colleagues from the West Midlands and East Midlands LEPs to create a £250 million ‘Midlands Engine Investment Fund’. This has been a culmination of cross-LEP collaboration where we have created a ‘find of funds’ for investing in smaller businesses. This was announced in the recent budget and is an agreement between the 11 LEPs, legacy funding from existing programmes, new funding from the British Business Bank and new European funding.
The key aim is to boost the Midlands economy and support the growth of 460,000 smaller businesses where it is anticipated that the first investments will be made before the end of this year. This is great news for businesses. This is just one example of the broad range of powers and investment packages on offer through devolution ranging from transport and infrastructure initiatives such as Midlands Connect and HS2, to a further round of Growth deal funding worth £1.8bn to build stronger links around skill providers which are tailored to employer demand.
Having said all this, the other option of course is to carry on as we are, the Local authorities and public sector organisations will most likely still be around for the foreseeable future, and we can continue doing the same sort of things we have always done.
Let’s face it, over the past few years manufacturing output is down, productivity is lower than the national average and we don’t have the skilled people to fill the local vacancies.
To do this would be a huge missed opportunity. We should grasp this unique opportunity, cement the links between the business, public sector and universities, work across the existing boundaries and boost productivity, develop a demand led approach to skills and add value to the economy.
