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23.07.18

Industrial strategies: taking back control

Source: PSE June/July 2018

The ‘place-based’ focus of the Industrial Strategy will be a significant step towards growing local economies alongside LEPs, writes Cllr Philip Atkins, County Councils Network (CCN) vice-chairman and leader of Staffordshire County Council.

The government’s revamped Industrial Strategy, released late last year, offered a welcome local narrative in the form of ‘place-based’ industrial strategies. Fast-forward 12 months and these will be piloted in three areas, including the Oxfordshire to Cambridgeshire corridor, ahead of a national roll-out.

This ‘place-based’ narrative to the government’s national strategy is one local government will welcome, as it recognises both the importance of empowering all four corners of England and the important role councils and local businesses will have in growing the national economy as we exit the EU.

This matters for county areas. The CCN’s call for greater recognition of the important role counties play in the national economy was backed by Oxford Economics’ report for the network last summer. Counties are the backbone of the English economy, accounting for 41% of England’s GVA and delivering a £54bn tax revenue surplus to the Treasury. Our areas are great places to live and work, as evidenced by the sheer amount of new businesses starting up in counties and house prices in rural areas rising at the fastest rate in England last year.

Despite these positives, many counties do face challenges – ranging from outdated road infrastructure and low productivity, to workforces that lack the high-value skills wanted by developing businesses. The recent Localis report for CCN outlines three main issues facing the national economy – Brexit, automation, and a shrinking skills base – all of which overwhelmingly affect county areas. 

CCN’s own recent research on broadband speeds in county areas encapsulates these issues. Counties have not been afforded the same level of infrastructure investment as urban areas, despite the increased costs and complexity of connecting remote and rural areas. 

Our analysis of Ofcom data, from its Connected Nations 2017 report, found that over two-thirds (72%) of England’s counties are below the national average download speed of 45mbit/s and more than a quarter (27%) have average speeds below Ofcom’s definition of superfast (30 mbit/s). In some rural areas, broadband speeds are lagging up to three times slower than cities only a few miles down the road. 

As I said at the time of the report, these figures show that counties are at a competitive disadvantage to urban areas. Businesses want a decent and reliable internet connection before setting up or expanding in an area. 

Interfacing with LEPs

The government’s commitment to provide superfast broadband to as many areas in England as possible has resulted in some significant steps forward in rural connectivity in the last few years. Counties across the country are working with BDUK and local partners to connect hard-to-reach rural areas and ensure residents and businesses receive better connections. 

More investment is only part of the solution; giving local areas the tools to do more through devolved and enhanced powers will be crucial too. With that in mind, the ‘place-based’ focus of the Industrial Strategy becomes very important to county areas. 

CCN has argued and provided the evidence that county authorities are the most effective bodies to lead localised strategies, but the government has looked to LEPs rather than local government as the main vehicle for delivering economic reform. 

A recent survey of county leaders showed that the vast majority value their partnership work with businesses on LEPs, with many saying they have positive relationships. At the same time, there is a recognition that the role of LEPs can be improved – and this is also acknowledged by government through the ongoing review of LEPs instigated by the Department for Business, Energy and Industrial Strategy.

One key improvement, county leaders believe, is for greater coterminosity between counties and LEPs. The current LEP composition in England is a complex one, with some councils working alongside several overlapping LEPs. Better aligning LEP and county boundaries would work better for local areas by reducing confusion for businesses and streamlining competing and contradictory economic priorities.

This view was backed up by Grant Thornton UK LLP, which recently worked with CCN on a short report on the Industrial Strategy. Its head of local government advisory, Guy Clifton, said that LEP geographies should “properly reflect local economies” and “local political reality,” adding: “It’s simply not realistic to expect local authorities, slimmed down after over half a decade of austerity, to engage with more than one LEP.” 

He also argued that any reshaping of LEP geographies should be led by local leaders rather than government – a position the CCN supports.

Strategic leadership

At the same time, the key to making local industrial strategies successful in local areas is having strong leadership both from local business and local politicians. 

Counties, as strategic authorities, should work jointly with LEPs on formalising local strategies. We have the strategic scale to plan for jobs, growth and investment over a large geography and the ability to pull together different and disparate public sector partners, as well as democratic accountability.

Whilst counties know their local economies intimately, they also have the size and capacity to do business nationally, or on a subnational level. 

This is shown in the Oxfordshire housing deal, with the LEP, county council, and district councils coming together to secure private and public investment into the area. Indeed, the Oxfordshire-Cambridgeshire corridor will be one of the pilot local industrial strategies next year.

We believe that if local strategies are to have the intended effect, they must be spearheaded jointly between LEPs and county authorities. Collaboration between local leaders in the public and private sector is needed to attract the workers of tomorrow to counties with high-skilled jobs, in conjunction with developing the right hard and digital infrastructure to grow local economies.

Local industrial strategies, if done well, and done collaboratively, could be the mechanism to ensure that local areas ‘take back control’ of their economic futures in the post-Brexit landscape.

 

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