Comment

Tapping into county potential key to Industrial Strategy success

Cllr Anne Western, County Councils Network (CCN) spokeswoman for economic growth and leader of Derbyshire County Council, argues that the success of the government’s Industrial Strategy depends on whether the potential of counties is tapped into.

The government’s new Industrial Strategy green paper opens with the aspiration to create a more even economy, where “wealth and opportunity is spread across the UK” and where productivity and living standards keep pace with international competitors. 

On face value, this would appear to be a shift in focus from the government, for a more inclusive economic policy that makes rural growth a priority alongside urban growth. This is an agenda that is of interest to CCN member councils, as despite seeing consistent growth and representing the largest contribution to the national economy, counties face structural challenges. 

Economic challenges and opportunities 

In CCN areas productivity lags behind the national average. There are ever-widening infrastructure gaps amounting to billions of pounds, and the least affordable housing outside of the capital is found in county areas. Contributing to this situation is years of underinvestment in infrastructure, over-centralised skills and growth policies, and a continuing emphasis on cities. 

These issues, and indeed many of the economic challenges and opportunities consistently highlighted by local government, are recognised in the green paper. We know that the government wants to raise productivity levels – it made this its flagship economic policy. Therefore, it is of little surprise to see a heavy emphasis on the productivity gaps between the capital and the rest of the country throughout the paper, and even an admission that growth policies have been too centralised. 

The last point is an important one in the context of the EU Referendum. We know that the over-centralised system has contributed to the disenfranchisement felt in large swathes of the country, especially prominent in county areas. Post-referendum analysis has identified genuine devolution as a means of re-engaging people and places, while providing the tools for economic growth rooted in all parts of the country. 

The paper does set out a clear logic for devolution and the types of challenges which empowered local areas could help to tackle. But on the other hand, it is disappointing that many of the solutions then proposed are about organisation from the centre. 

Devolving skills provision 

Commitments to address skills mismatches and creating a new technical education system are welcome, but are still centrally-led. CCN has called for skills provision to be devolved to county level, better integrating it with a revised role for local authorities in education, with counties bringing together public sector, private, and education providers seamlessly. 

On infrastructure there are some encouraging signs. The paper first identifies that infrastructure in the UK is not currently keeping pace with other developed countries, with the lack of alignment between central government infrastructure investments with local growth priorities identified as one cause of this. 

Emerging regional and sub-regional agendas, such as sub-national transport bodies, are clearly endorsed as a means of making infrastructure investment a better fit. 

This is something that counties can, and are, getting their teeth into. The Economic Heartland and Midlands Engine groups have been pinpointed by the chancellor recently. Both are spearheaded by counties and key partner organisations to deliver tangible growth results and better infrastructure for residents. 

The paper also states that future rounds of infrastructure investment will take account of the balance of spending per head between different regions. We can hope that this will help address the increasing prioritisation of big cities, to the exclusion of other areas. Such an approach could also support the consolidation and devolution of over 70 disparate government growth funds, recently identified by the LGA. 

Lack of long-term infrastructure planning and failure to align planning for infrastructure with planning for housing and industry are also identified in the paper as central challenges. The National Infrastructure Commission is clearly part of the solution here, stating that a strategic and aligned approach between planning, infrastructure and economic strategy were key to local growth agendas and delivering much-needed homes. 

County councils and county unitary authorities provide the strategic positon and capacity to drive much of this work. Counties are able to bring various partners together, working with LEPs, businesses, skills, education and health providers to better align the local and regional approach to growth and reformed services. There is real opportunity here to set up empowered partnerships with devolved powers, representing counties alongside the UK’s city-regions. 

Still a city focus 

Despite counties clearly having a pivotal role to play in the future sustainable growth, there is still a familiar city focus to the green paper. It outlines the ambition to explore further devolution deals to cities, with counties conspicuous by their absence in this section. This is on top of metro mayors having devolved strategic growth, planning and precepting powers from May, and the ability to raise an infrastructure levy once full business rates retention is introduced. 

In pinpointing the challenges the country faces, this consultation document should now act as a catalyst for the next stage of devolution where empowered counties, alongside cities, bring decisions closer to their communities and ensure sustainable growth in all parts of the country. The success of the Industrial Strategy depends on whether the potential of counties is tapped into.

(Image: c. Stefan Rousseau)

For more information

The Industrial Strategy green paper can be accessed at: 

W: www.gov.uk/government/consultations/building-our-industrial-strategy