Introduction to Economic Development: Cities and Local Growth Unit

The Cities and Local Growth Unit (CLGU) was a cross-departmental team jointly hosted by the Ministry of Housing, Communities and Local Government and the Department for Business and Trade. Until 2025, the Unit sat at the heart of central government’s engagement with Mayoral Combined Authorities and other city-region partners, supporting the design and delivery of devolution deals and local growth programmes across England.

Staff at CLGU came from a range of professional backgrounds, including policy, programme management, finance and analysis. While many worked closely with economic development issues on a daily basis – appraising investment proposals, managing place-based programmes and engaging with local partners – formal training in the underlying principles of economic development had not previously been delivered in a structured way across the team.

To address this gap, the CLGU commissioned a bespoke introductory training session from the Institute of Economic Development (iED) designed to give staff a shared conceptual foundation and practical toolkit for understanding economic development theory and its application to their work.

The principal challenge was to design a session that could serve a diverse audience – from analysts familiar with economic concepts to generalist policy advisers with limited prior exposure – without becoming either too technical or too superficial. The training also needed to feel relevant and grounded, making clear connections between economic development theory and the day-to-day realities of working within a central government unit focused on city-regions and local growth.

A further challenge was time. With a single interactive session available, the iED needed to cover a wide range of content meaningfully, including:

• The foundational principles of economic development and the case for public intervention.
• Supply-side and demand-side considerations, and how different policy tools address each.
• The concept of place competitiveness and the factors that drive spatial economic disparities.
• Investment attraction, business support and the role of public agencies.
• How to identify local need, develop objectives and build a coherent rationale for intervention.
• Options appraisal, business case development and common pitfalls in project evaluation.

The session was designed as a facilitated interactive workshop rather than a conventional lecture, reflecting the seniority and experience of participants and the Unit’s collaborative working culture. Content was structured to build progressively: from first principles through to applied business case development, with each module grounding theory in real-world policy examples familiar to the CLGU audience.

Principles of Economic Development

• The session opened by establishing a shared understanding of what economic development means in a UK policy context – distinguishing it from broader macro-economic management and locating it within the tradition of spatially targeted intervention. Key concepts introduced included market failure, additionality, deadweight and the risk of crowding out private investment. Participants explored how these concepts underpin the justification for public expenditure on local growth programmes.

Place Competitiveness and Spatial Disparities

• A significant portion of the session focused on place competitiveness – what makes some areas more economically dynamic than others – and on the persistent disparities in economic performance across English city-regions. Discussion drew on the Levelling Up White Paper framework and its six capitals model, considering how labour markets, property values, infrastructure and sector composition interact to shape local economic trajectories. The rural-urban dimension and the challenges posed by sectoral dislocation were also addressed.

Investment, Business Support and Social Value

• Participants examined the nature of inward investment – why businesses make location decisions, what public agencies can and cannot influence, and how investment promotion activity fits within a broader economic development strategy. The session also considered business support mechanisms and the concept of social value, exploring how economic development interventions can be designed to deliver wider community benefits alongside direct economic outputs.

Evidence, Appraisal and Business Cases

• The final strand of the session addressed the practical mechanics of developing and appraising interventions. This included how to identify and evidence local need through data triangulation and stakeholder engagement; how to develop a logic chain linking identified weaknesses to proposed interventions; and how to build a robust business case, including benefit-cost ratio analysis, deliverability assessment and common appraisal pitfalls. Participants considered the tension between national, regional and local strategic priorities and how to navigate this in practice.

iED Executive Director Nigel Wilcock, who led the training, said: “This is an excellent example of the professional development support that is available for government bodies from the Institute of Economic Development.

Those working within the Cities and Local Growth Unit played a critical role in shaping the policies, programmes and investment decisions that influence economic outcomes across England’s towns, cities and regions. Yet many professionals arrived in these roles from diverse backgrounds and may not have had the opportunity to explore the principles of economic development in a structured way.

It was therefore a privilege for the iED to work with CLGU to deliver a bespoke training programme that connected economic development theory with the practical realities of policy-making, programme delivery and business case development. The enthusiasm and engagement shown by participants demonstrated a genuine appetite to better understand the factors that drive local economic performance and the rationale behind public intervention.

By providing a shared understanding of concepts such as place competitiveness, investment attraction, social value, appraisal and additionality, the programme helped equip staff with a stronger foundation for making informed decisions and engaging effectively with local partners. Ultimately, better understanding of economic development principles leads to better policy, better investment decisions and, most importantly, better outcomes for places and communities.

We are proud to have supported CLGU in strengthening this capability and contributing to a more informed and effective approach to local growth and devolution across England.”