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The Institute of Economic Development (IED) has responded to a Labour Party National Policy Forum Consultation on Local Economic Development.

The consultation was led by the Housing, Local Government and Transport Policy Commission, which develops Labour policy concerning local government and devolution, house building and the housing sector, and Britain’s transport infrastructure and services. 

The Local Economic Development consultation invited “views on what policy levers Labour should use in government to support local economic development, what institutions should pull those levers and whether they need reforming, as well as what Labour councils can do now to start laying the ground for the road to rebuilding Britain’s economy”. The consultation closed on 30th June 2019. In response, the IED wrote:

• Local Enterprise Partnerships are not perfect and are under-resourced. We suggest that resourcing and governance reforms are required but there have been too many reorganisations of structures in this area so should be retained to ensure continuity.

• In too many cases devolution is actually shifting funding administration to local bodies but funding rules remain set by Whitehall. This is not really devolution at all.

• Local government needs a certain funding settlement and this should be in addition to business rate retention. If councils do receive their business rates, the business rate-setting process should be removed from central government. Additionally, economic development should be a statutory function.

• Public procurement can require greater levels of social value – and the contribution promised in tenders should be contractually-embedded and performance-evaluated.

• Where affordable technology exists low carbon measures can be introduced more quickly – a complete ban on new gas-fired domestic boilers in three years would create a whole industry in currently known and tested technologies.

• Enterprise Zones without accelerated capital allowances are a nonsense – their actual differentiated offer can be provided under existing legislation.

• Broadband should be prioritised in rural areas with better models of delivery (see B4RN – Broadband for the Rural North – as a community-based broadband provider).

• Regional rail is a priority – faster rail and improved frequency and punctuality is essential. This is more important than HS2 although the IED fully accepts the need to increase West/East Coast mainline capacity.

• State aid does not necessarily need reforming but we do need intervention schemes that make use of the exemptions available. At present the UK has an assisted area map agreed at a national level but no national regional aid scheme (this is needed).

• The easiest method for reorganising Structural Funds would be through a devolution of the funding for economic development purposes. This can start to dismantle some of the huge machinery and bureaucracy of the Ministry of Housing, Communities and Local Government.

• Old economic interventions schemes of any political party can be revisited – some good schemes have been thrown aside in the recent past (e.g. Manufacturing Advisory Service, Regional Selective Assistance, High-Growth Business programmes).

• Much more should be done to relocate the decision-making parts of publicly-run organisations and government. There is no case for these businesses to stay in London – it is expensive and sucking investment out of the regions to be at a single centre of decision-making. The UK is the most polarised economy in Europe and this is starting to mean that national economic policy-setting is difficult and creating political and social dislocation as well as an under-utilisation of public assets in some locations and an under-capacity in others. The rare examples of relocation are great successes – the BBC in Manchester being a key example.

• Everything possible should be done to ensure more ‘tier one’ or prime decision-making investment takes place in the regions. These are the organisations that drive knowledge and supply chain investment.

• The provision of support for larger businesses can be undertaken in a way that harnesses their activity to help meet the economic strategies of an area. Large businesses are crucial to support great swathes of employment in UK regions. 

-ENDS-

Nigel Wilcock is available for interview via Phil Smith, Institute of Economic Development PR consultant, 01778 218180 / 07866 436159 / phil@philsmithcommunications.co.uk.

Notes to editors:

The Institute of Economic Development (IED) is the UK’s leading independent professional body representing economic development and regeneration practitioners. Established over 30 years ago, the IED's key objective is to represent the interests of economic development practitioners and ensure their views are widely expressed and noted. The IED is committed to demonstrating the value of economic development work for local and regional communities; the pursuit of best practice in economic development and the attainment of the highest standards of professional conduct and competence.