Devolution to towns, small cities and suburban areas across England could generate an £8.7bn boost to the economy, according to a report released this week. Our feature writer Suzanne Danon finds out more.
According to The Independent Commission on Economic Growth and the Future of Public Services in Non-Metropolitan England, devolution to England’s non-metropolitan areas (NMAs) is ‘essential’ for economic growth and for ‘tackling skills shortages holding back UK businesses’.
Sir John Peace, chair of the Commission, explained in a foreword to the report that NMAs account for roughly half of England’s economy and population, meaning their economic contribution and growth potential is ‘as significant for the nation as that of big cities’.
The report argues that if decision-making over skills and training was devolved to England's NMAs, almost a million people could be found work or helped into better jobs, generating an £8.7 billion annual boost to the economy.
Too much focus remains on London and other major cities, including Manchester, when it comes to debate over devolution. The report has called for NMAs to be given the same growth opportunities as their urban neighbours.
The report recognises that NMAs have attracted investment from multi-national companies and are home to heavy manufacturing and the car industry alongside new industries such as life sciences and tech start-ups. The Commission has called for serious capital investment in housing infrastructure, transport, skills, broadband and public services, or the ‘building blocks of a local economy’, and wants the responsibility for instating them handed to local authorities.
The report states: “Local authorities are best placed to judge the needs of their local economies, so it makes sense to devolve responsibility for these policies to grassroots level.”
It adds that this change will require a shift change from councils. “More powers demand more accountability. Local authorities will need to transform themselves from organisations that spend central money and provide services directly, to ones that manage and grow their budgets through new revenue streams as well as delivering services in the most cost effective way whether through private, not for profit, or public sector.”
Sir John Peace said: “Further growth requires serious capital investment in housing, infrastructure and communications. It is clear that devolution represents the best way to deliver that investment.
“Local government has responded to 40 per cent budget reductions with valiant efforts to cut costs and increase efficiencies. With billions of pounds more in cuts still to come, this is the time for bold solutions.
“The status quo is no longer an option. We risk falling behind other countries where devolved economic powers have given areas outside the big cities a competitive advantage.
“Greater devolution requires stronger collaboration and stronger governance. We want to see a transformation of local authorities from dependents on a finite pot of central government funding into entrepreneurial economic zones.”
The report has set out a number of recommendations including:
· Devolving skills funding to a grass roots level
· Encouraging locally-led promotion of Foreign Direct investment in NMAs
· Spatial and transport planning decisions to be taken at the level of the economic area through the groupings of boroughs. All capital and revenue funding will need to be transported into a single pot
· Establish council-led local development corporations to own land, fund and provide infrastructure, plan and commission the construction of significant housing developments
· Adopt a viable future digital infrastructure which overhauls the current existing limited broadband infrastructure in certain areas of England, particularly rural England
· Conduct an urgent review of the decision making process and funding for capital projects with the aim of revitalising investment in local infrastructure. The review should identify the infrastructure investment that is best delivered centrally and that which should be delivered locally to achieve a better central/local balance
· Strengthen future governance arrangements in non-metropolitan areas to reduce duplication, strip out any bureaucratic waste and length in decision making which can hold back growth and public service reform.
The Commission was established by the LGA’s People and Places Board last year. Read the full report and the recommendations in more detail here.
What do you think of the Commission’s recommendations? Are NMAs being ignored in favour of London and other major cities?
