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“Local government is fundamental for supporting sustainable long-term economic growth and meeting the ‘levelling up’ agenda”

 

Local government is absolutely fundamental if we are going to get anywhere in stimulating and supporting sustainable long-term economic growth, but also in meeting the Prime Minister’s whole ‘levelling up’ agenda in terms of addressing the disparities that are still clearly evident between the North and South of the country.

In terms of the exact role of local government, I think a lot of it depends on what type of issue you are focusing on. Are you looking at skills, for example, or town centre redevelopment? With town centre redevelopment, I would always argue that it should be the local authority’s responsibility to work with national government to secure any funding they can to facilitate development. In terms of skills, I think that has an impact at a far wider geographical scale so you are looking at a Local Enterprise Partnership or combined authority led approach.

Greater Manchester, where I am based, was the first combined authority and it had the first devolution deal, and historically over the last 10-15 years it has had a good relationship with national government. I think devolution, and having a combined authority, has enabled the area to access funding for initiatives and developments that would otherwise not have been available, so the critical mass argument is key here.

When you have a model for economic recovery, and it works, sometimes what is missed (but not always) is ‘let’s capture what has/hasn’t worked well’. The lessons learnt from initiatives that have not turned out as intended are just as important as those associated with successful programmes. Having an evaluation framework in place at the outset of a funding programme is an important consideration, as it helps local government highlight to national government that it has a plan in place to measure long-term outcomes.

When you are monitoring the impact of a programme/intervention, demonstrating its economic impact is key – for example, jobs created, businesses supported, private sector funding leveraged, new homes delivered, new commercial floorspace built etc. Also aligned to this is ensuring that you capture the social benefits or social value that different schemes bring to an area. This includes reducing unemployment, increasing people’s access to apprenticeships, supporting people to upskill and gain new qualifications, boosting visitor numbers to town centres, improving people’s mental health and wellbeing, and providing homes for an ageing population. These are all things that have not been given as much weight in the past, but I think now increasingly as we move forward towards a more social model or genuinely social-economic model of capturing and monitoring benefits, this is something that is going to become extremely important.

A lot of the issues I have talked about are geared towards the public sector but for the private sector, like Pegasus Group and our clients, I think that it is going to become important to them to show how they are supporting the social-economic agenda. For example, how are house builders helping to create social value or social impact in their respective areas, and are they communicating this to the public sector?

The more public and private sectors can work together to deliver long-term socio-economic benefits for local areas, the more this can help show national government that if local areas are able to get on with things and allocate funding based on local need, then local people on the ground are better placed to identify what is needed to grow the economy in the future.

The role of local government is absolutely critical as a mechanism for economic recovery. I would hope over the coming months that with everything that has happened with Covid-19, we emerge from lockdown and try to get some normality back (whatever that looks like). I would also hope we see an increased role for local government, not just in terms of delivering the actual funding agenda, but helping to shape it as well.

Richard Cook is Director, Economics at Pegasus Group and a member of the Institute of Economic Development. Richard was a panellist on the IED’s “What are the most appropriate mechanisms for economic recovery, and what is the role of local government within that?” webinar on 5th November.

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