It’s the sub-regional economies, stupid!

July 16, 2009

Nick Hope, Researcher,NLGN
Progress

Economic leadership on the world stage, national monetary policy and central financial initiatives alone will not be enough to take the nation out of recession. A more localised approach is vital in strengthening the nation’s economic resilience and building future prosperity.

We do not have a homogeneous economy in this country. We live in a series of highly varied economies with different assets, histories, busineses, industrial strengths, infrastructural weaknesses and employment and skills challenges. “Functional economic areas” as they are known – the places people live, work, travel and shop – tend to have a sub-regional footprint.

We need active government, taking decisions at this spatial level as well as nationally. The problem is that existing local and regional administrative boundaries are somewhat artificial and do not match this economic geography. Redesign of organisational structures can be time consuming, costly and disruptive, and so what is needed is a more organic process of individual councils coming together and collaborating sub-regionally. In the same way that public services should be far better tailored around the citizen, governance should much better reflect the economic footprint of areas.

Important progress is being made on this kind of partnership working, with new sub-regional governance arrangements emerging and strengthening across the country. A number of areas have signed Multi-Area Agreements (MAAs) with central government, where Ministers have granted flexibilities and powers to clusters of local authorities so that they can better deliver in policy areas such as housing, skills and transport.

Despite this progress, the sub-regional agenda needs to be driven forward at a far greater pace. Sub-regional partnerships are crying out for greater control over their own destinies. Whether you go to Tees Valley, Tyne and Wear, Leeds, Leicestershire, Manchester, Merseyside, Birmingham or Bristol the story is the same: they want more powers so that they can kick start their economies.

Too often Government departments are unwilling to give up their systems of top-down micro-management and local authorities are overly protectionist when it comes to pooling money and sovereignty with their neighbours. But, if Whitehall and local councils fail to prioritise economic needs over institutional self-interest they will fail future generations. It will take more than “business as usual” to deliver the infrastructure and inward investment needed to grow out of recession.

If the Government is to ‘build Britain’s future’ it must recognise that it cannot do so from SW1. Strong strategic leadership at the centre should not be confused with control from the centre. A one dimensional approach will fail to capture the complexities of spatial variation or be sufficiently responsive to the fast-changing circumstances of different areas.

In the 21st century a more sophisticated approach is needed in public policy. Just as citizens must be empowered to have a greater say over the services they receive, so too should partnerships of elected councils be empowered to deliver growth in their economic sub-regions.

Devolution of powers to local authorities will not capture the public imagination or turn around Labour’s polling figures. However, better skills opportunities, improved public transport, new homes, jobs and economic growth in the places people live just might. Government must wake-up now to the fact that to achieve this it must embark on a radical programme of devolution to enable a more citizen-centred and place-focused approach to public policy.


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