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“I do wonder if we are going to see economic development and the structures of local government funded appropriately again”

 

I was delighted to Chair our recent webinar, “What are the most appropriate mechanisms for economic recovery, and what is the role of local government within that?”, and I wanted to capture some of my perspectives in follow up.

By way of introduction, clearly we all know there is really significant work ahead now that we are in a second lockdown in England and there is much to think about on the structures which will put us back into good shape. We have got devolution, local government funding, local government reorganisation, combined authorities, governance, shared prosperity, all of these issues we discussed at length on the webinar.

I am a really big fan of genuinely devolved decision-making, but I think what we currently have where we have devolved some of this activity is that we have devolved responsibility for delivery, yet have not devolved the decision-making around the structures of the funding. I do not know where we are going to end up post-Covid with combined authorities – it may well be that they will be slightly less popular in Westminster than they have been of late – but I do ultimately wonder if we are ever going to see economic development and the structures of local government funded appropriately again.

I am always struck by how many government departments generally stand up for the organisations that they are responsible for. You do not see the Ministry of Defence trying to argue for defence cuts, but in actual fact with MHCLG’s role in terms of supporting local government you would hope to see more of a position of standing up for organisations. Economic development is too important just to be left to economic development professionals, we need everybody to be involved. Economic development needs to be a strategic function within local government with definite funding.

We later explored three key areas in our Q&A.

How do we see the distinction between LEPs, local authorities and combined authorities, and the whole of role of LEPs generally?

My view is that even across LEPs it is not particularly clear the role they play with their various constituency bodies, and I think that has been one of the problems. We had one comment from a member listening in saying that whilst there is an understanding that you have got to be in a certain LEP area, if you are right on the boundary you have at least got to have good relationships with the LEP next door. As soon as you draw a ‘red line’ on a map you have these issues with boundaries. One area I think is particularly important, post-Covid, and is often overlooked when you get into these structural debates, is how we can best bring the needs of business and community into these strategies when actually we seem to be spending time talking about structures and competitions.

How do we best make sure that economic development serves its communities?

In this immediate period, I have seen some examples where local authorities have been completely swamped in trying to support businesses and administer local business grants, which in some ways is dealing at community level. My challenge would be are local authorities supposed to be doing that, or have we reached a level where we have got to think about future structures and future strategies and find an easier way for businesses to get support? In the longer term, I fear that many of the strategic plans local authorities have from an economic development perspective have been inevitably delayed whilst we deal with the here and now, and that has happened in national government too.

Do we feel that the stakeholders we deal with are well enough informed about what can be achieved and that they can contribute fully?

Firstly, I think that whole perspective of local people knowing what needs to be done at a local level (including economic development, regeneration and place management) is fundamental. What is striking is the people who have got the most skin in the game are the people who are residents, who know the place, and from this perspective they are absolutely central to it. It is difficult to not see the logic in that. I think we have seen some emergence of local government being trusted with all sorts of things during Covid, but we have also seen some centralisation of some key services which is a slight concern. There is also the wider issue of local stakeholders (including businesses) competing for money. The UK Shared Prosperity Fund ‘mirage’: are we ever going to see what it is?

Nigel Wilcock is Executive Director of the Institute of Economic Development

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