The Government published its White Paper today outlining the policy for economic growth entitled “Local Growth: Realising Every Place’s Potential”. To save you the trouble I have spent the afternoon reading it. Nick Clegg’s introduction says that the Coalition Government is “determined to do something different” (p.3) so I was interested in reviewing the paper to see just how much is really new and what it is likely to mean for some places.
First of all, the Government is planning to stop prioritising investment on the basis of region or sector. In relation to region, this absolves the Government of its previous responsibility to “narrow the growth rates between different regions”(p.11). In the main, this relied on public funding but the White Paper states that the UK economy has become “unbalanced and too reliant on public spending”.
There is a 1.4 billion Regional Growth Fund, which areas that “depend too heavily on the public sector for jobs” can bid for, to create more private sector employment. But this is only available for three years. Is it really possible to create a private-sector led local recovery in our most deprived areas in just 3 years?
The Resilience Ranking compiled by Experian anked Middlesbrough, Mansfield and Stoke-on-Trent as the most at risk from public spending cuts. I know these three areas very well, and even if they all got 1.4 billion pounds, it wouldn’t turn round decades of decline in three years. Middlesbrough has had a £1.5 billion investment programme but it still has an unemployment rate of 6%, with some wards having rates as high as 17% (source: Tees Valley Unlimited). The Public Sector provides much needed employment in these areas, I don’t see this as a ‘weakness’. What’s wrong with having a few more teachers, doctors, police officers, park wardens etc. in places that need them?
As for abandoning the prioritisation of certain sectors, that’s good news for those sectors that have been discriminated against, like the independent retail sector. Whitehall has always looked down its nose at retail, as it doesn’t create wealth…it just moves it around. Nevertheless, like the Public Sector, it provides a lot of employment and enterprise ‘training’.
I presume the new Local Economic Partnerships (LEPs) will be free to invest in whatever sectors are locally important, rather than being told what to do by Central Government (and let’s face it, there are many more entrepreneurs that want to set up retail and service businesses than high-tech/bio-tech ones). In principle, local decision making is a good thing, but it doesn’t always work.
The local Training and Enterprise Councils (TECs) only lasted 10 years. Like the LEPs, TECs were employer-led, with two-thirds of the members of each TEC board having to be chairs or chief executives of private sector employers. But they were disbanded because, overall, they were not effective at local labour force development, many were accused of “creaming off” government funds for initiatives not relevant to local employment needs and rather than being entrepreneurial and efficient many were “out of control” and overly bureaucratic.
So what else is not new? 12 directly elected mayors for the 12 largest English cities. As my friend Choco from Stoke said on my Facebook today “We had it in stoke, party politics comes into it too much and there’s too much power in one persons hands it’s been ditched here amid allegations of corruption, wasting public funds and overpaid non local executives so beware!”.
This reminded me of the country’s highest paid monkey (see picture above), the mayor of Hartlepool, who was elected on his manifesto of free bananas for schoolchildren. Hartlepool is now one of the country’s best performing local authorities and many credit Stuart Hammond (the man in the monkey suit) for providing strong and honest leadership. So it can work, but maybe it is because he is not a career politician that means he has done things differently. I can’t image us electing Moonchester here in Manchester.
Are you still awake? Only a couple more things to go now. Tax Increment Financing. This is when local authorities can borrow money in anticipation of increased future revenue from business rates that result from their investment. I think I’ve got that right. It’s nothing new in the US, who have thousands of TIF districts. But we have already seen what private-sector led investment has done to many of our towns and cities, identical-looking blocks of flats, carbon-copy shopping centres and yawn, not-another-glass-office-building.
Finally, the Government proposes to reform the planning system so that local communities can make their own decisions “changing the culture of planning so that the default position is in favour of development” (p.28). Usually the only reason local people get involved in the planning process is to stop development – so I think this is going to be the hardest change to deliver.
So, on the whole the proposed changes to the planning system have the potential to have the most radical impact on local areas…..but I am not sure if it will be positive or negative. The cutbacks in public spending in the country’s most deprived areas will set them back even further….increasing the gap between the South East and the rest of the country. On the positive side, this White Paper does promote place management (although it doesn’t refer to the multi-stakeholder partnership approach to place improvement in such terms). So, in areas where strong partnerships already exist the reduction in top-down management from London should ‘free them up’ to achieve their potential. It takes time to establish these partnerships though, especially ones that are truly representative of all local stakeholders.