Delivering place based growth: setting the foundations for economic success
13 July 2018
Delivering local growth is a priority for all councils, however they face significant barriers as well as uncertainty around the economic impact of Brexit.
In collaboration with a range of partners across a place, particularly Local Enterprise Partnerships (LEPs), many councils have developed ambitious plans for growth, built around areas such as skills, infrastructure, housing and inward investment.
Leading councils are making explicit links between their plans and the numerous other cost and demand pressures they face. Securing economic success in an area can help to address a range of broader problems, enabling individuals and communities to become more independent and more capable of supporting themselves, and therefore reducing demand on public services.
At the same time, growth can help councils generate additional income – either through fees and charges or more innovative commercial arrangements with the private sector and other partner organisations.
Respondents to our 2018 Local State We’re In survey of local government leadership identified a number of significant barriers to economic growth, particularly lack of investment in infrastructure, lack of influence over skills and a lack of affordable or suitable housing.
Barriers to economic growth
Collaboration is central to successful place based approaches to growth. Local Enterprise Partnerships and public sector agencies were identified as key partners by just over three quarters of survey respondents. Indeed, for the first time LEPs were regarded as being marginally the most important, perhaps reflecting their central role in formulating Local Industrial Strategies in non-mayoral areas.
Key partners for growth
Addressing local growth challenges raises significant questions for local authorities:
- Understanding the economic potential of your place. All councils have access to valuable data about the strengths, weaknesses, opportunities and threats in their areas. However, in many places not enough is being done to generate real insight from this information. Leading councils are beginning to invest more in modelling the impact of interventions on their local economies to help identify investment priorities, but much more could be done to address this.
- Building alignment around a clear vision and strategy. Local Industrial Strategies offer the potential for localities to take a long term view, establish a compelling ‘brand’ for their place and identify clear growth priorities. The most successful strategies will take account of the dramatic rate at which certain sectors are transforming, as well as the way in which new technologies are disrupting our understanding of how economies develop over time.
- Engaging with the private sector. Leading councils understand the importance of constructive engagement with the private sector. Councils have a clear role to play in helping to create a supportive environment for business. In some instances, this may entail the provision of financial backing. In others, establishing a more supportive regulatory environment can be equally important. Simplifying and standardising the routes through which the private sector can engage with local government is critical to building productive and trusting relationships.
- Building international partnerships. Some councils have begun to consider how regional investment and regeneration funds will be reshaped beyond Brexit, as well as its impact on foreign direct investment and trade. Proactively developing international city-to-city relationships and promoting export and trading links will be a key differentiator in securing future economic success.
The savings all local authorities have had to make over the last decade have had a significant impact on their capacity. However, councils cannot afford to overlook the growth agenda. It is clear that taking a place based approach to delivering inclusive growth is key to ensuring the success and sustainability of local authorities and the wellbeing of the communities and people they serve.