A chance to rewire our approach to local growth

Source: PSE Jun/Jul 17

Cllr John Clancy (pictured centre), leader of Birmingham City Council, explains why the Industrial Strategy is a priority for the UK’s Core Cities.

Our 10 Core Cities make up a quarter of the UK economy. They are often the places where deals get done and things are made. They are vital to our success as a nation, but we only use a fraction of their potential. For decades, this country has lacked a proper plan for economic success that can ensure we make the most of every part of the country and not just London. 

Core Cities UK believes the Industrial Strategy is a chance to change that, an opportunity to ‘rewire’ our approach to economic development so we can truly compete and produce better life chances for our 19 million citizens. A truly ‘place-based’ strategy can close the productivity gap between cities as a whole and the national average and that will produce a huge economic dividend, putting £66bn a year more into our national economy. 

But it is not just about growth for its own sake. We recognise the need to create inclusive growth and raise living standards to build a stronger, fairer economy that works for all. And we recognise the need to make better use of the assets that each city has to drive local investment and local returns. 

We welcome government recognition that the old, top-down, sectoral-based approach has not worked. Previous plans have not understood the different characteristics of our great cities and their surrounding urban areas, failing to grasp their complexity but also their potential. 

Core Cities UK believes a place-based Industrial Strategy must do three things: 

  • Maximise the potential of the assets of each place for job creation
  • Ensure that people have the skills to access those jobs
  • Make sure that we improve our places, creating smarter, liveable cities for everyone 

Some might see the Industrial Strategy as being all about large companies, but the reality is far more complicated than that. Manufacturing of all types needs to be seen as a complex set of local, regional and international supply chains, and support must be delivered to them in a planned and sustained way. It also sits alongside a vast network of service industries that are integral to our overall economic success. 

The Industrial Strategy also needs to understand the role of the public sector more widely. Almost every area of public policy, from housing to health, from air quality to government procurement, plays a part in our economic success or failure. 

Put simply, companies cannot work without people and people need decent places to live, efficient transport networks and great schools, colleges and universities. So, for example, the Industrial Strategy needs to recognise that not only is housing itself an industry, but also the important role that housing supply and quality of life play in economic growth. 

Employment growth requires an appropriate supply of labour and workers need good-quality homes in which to live. Failure to provide enough homes leads to overcrowding and overpricing, which impacts on productivity and labour market flexibility. That’s why we are using our local expertise to work on housing ‘deals’ with government, helping them to accelerate and encourage more building. 

Education and skills is another key area for improvement. We have argued for some time that a centralised system actually harms our economic potential – failing to respond to either the needs of individuals or the skills requirements of business. For the Industrial Strategy to be effective, we must ensure there is an availability of the right workforce, at the right time, with the right skills and behaviours. Further devolution is required to enable local leaders to have a clear role in co-ordinating the activity of further education and adult skills providers and linking it to economic growth plans. 

We also need to acknowledge the diversity of our labour markets. There are different skills gaps in different places and any national approach needs to allow flexibility in its implementation at a local level if it is to be successful. 

The solutions to the UK’s structural economic problems are complex, but at the heart of our proposals is a relatively simple concept: the need for a local ‘place-based’ approach. This means not just a national strategy that makes reference to local places, but locally-owned and created strategies that sit within the overall national approach. 

To make the really big step change we seek, we must also have the powers and local flexibilities to implement those strategies without referring back to government. The government has already made welcome advances in this direction, but it could go further, giving our cities greater freedoms to deliver more growth and prosperity for our nation.




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