Neil McInroy
All posts tagged: growth
The way forward for LEPs
Local Economic Development is as much about setting the conditions for future success as immediate short term gains. Local Enterprise Partnerships (LEPs), have to look beyond the immediate national and global economic concerns, build up power and ignite a process toward a longer term shift in the economic destiny and resilience of local areas.
Of course, all the LEPs differ in size and history, and the challenge for each Local Enterprise Partnership (LEPs) is very different. In some areas, LEPs have emerged from pre-existing economic partnerships and groupings, with staff, some existing resources through Local government, and well established plans of action. However some LEPs are new, have no heritage, cover new economic geographies, and have limited experience of joint working.
In some areas, LEPs are building on existing growth, as they cover areas which have some economic success and a diverse range of successful businesses. However, in many locations, due to decades of de-industrialisation and the failure to tackle systemic local economic problems, there is no short term fix. Their journey will be harder and longer.
Nevertheless, they all share the possibility of doing good, through the ‘traditional’ standard fare open to them as set out in the Local Growth White Paper.
The 22 new ‘enterprise zones’, include incentives via tax breaks and simplified planning. There is also stimulus funding via Regional Growth Fund (RGF) and Capacity Fund, and greater connections with national priorities around digital and transport infrastructure. I am confident that some Local Enterprise Partnerships will be make a difference. However, even in relatively successful areas, these policies still need to avoid the pitfalls and be used effectively.
In other areas, these policies will struggle for traction and impact. This potential struggle for all LEPs is of course framed by national and global economic turbulence. However this is beyond their influence. Therefore, they must grab real influence on the key pistons of local growth- capital, labour and have a focus on local economic inputs such as innovation which are often ermbedded within local culture, place and society.
Many areas are starved of capital investment. The funds through the RGF are welcome, but for some areas, offer up a meagre appetiser, to the hearty meal which is needed. That is why LEPs’ working with Local Authorities and private finance must also strive to establish their own investment funds. Furthermore, the idea of an ‘area growth budget’, devolving Whitehall budgets to areas (as outlined in the city finance commission report), would be an excellent means by which LEPs, working with Local Authorities, could potentially achieve greater weight around investing for growth
Many parts of the England, in their industrial heyday, prided themselves on having a uniquely skilled, inventive and productive labour force. This is clearly no longer the case in many areas. The RDA’s made little impact into skills; and nationally we have reorganised and tinkered with the ‘skills game’ with little success. LEPs must not make the mistakes of the past. They must prioritise skills, forging significant links and influence over the Skills Funding Agency ensuring that employers lead on skills.
Finally, whilst mindful of mission creep, LEPs need influence over the life of place and place-based factors which nurture creativity and innovation energy. This includes relationships with the community and voluntary sector, and factors including social capital, investment in public realm, quality of life, culture and the arts.
These aspects, may be seen as irrelevant and a distraction by some. They are also clearly the kind of things which are most likely to be forgotten or ignored by LEPs.
However, the ways in which businesses identify and have connections with the ‘life of place’ are well established inputs and conditions for growth. These need to be seen as powerful and are exactly the type of things which can create real penetrative and enduring depth to economic development work. Place policy is economic policy.
LEPs must move one step beyond the opportunities afforded by the standard policy fare. Whilst short-term growth is sought, they must consider the deeper underlying economic conditions and be mindful of economic resilience in the long term.
Local economies in peril?
Good local economic policies are never enough on their own, we also need plans and strategies. This is not a new problem, local economic strategy and planning has been limping for a long time.Some places lost their economic and industrial raison d’etre 30 years or more ago, and despite lots of regeneration and economic effort, are still trying to find a new economic destiny. Furthermore, with the advent of economic recession, and with ongoing threats of peak oil and climate change our planning and strategy is woefully inadequate.
Some recent local economic policies are welcome. However, Local Enterprise Partnerships (LEPs) are not proven as a punchy economic planning vehicle and in many instances, are mired in capacity issues. The Regional Growth Fund is fine, but is dwarfed by the deep and rooted economic structural problems some localities face. Recent consideration of a return to some form of 80’s enterprise zones, smacks of a lack of ideas and is old thinking for very different times.
Furthermore,even if these policies, were sufficient, we are also seeing a thinning of local economic knowledge and capacity, via the loss of personnel and resources.Local authority economic development departments and associated activity are reducing, as money is being diverted away from them, to protect frontline and statutory services. This loss of capacity is also reducing the ability to make the vital networks and strategic links at various scales between economic, social, cultural services and policies.
How do we get a big (productive) society, if it is merely left to the understaffed LEP to forge the strategic connections between the social economy and large commercial investment? Or as a director of economic development said to me ‘where are the LEPs in matching large work programme contractors with a local understanding of demand?’
Let’s not be mistaken, there is an emerging crisis in local economic thinking, policy and strategy.
Some may believe that local economic development is insignificant to the UK Plc economic policy as a whole, or unnecessary state meddling. Strategies and plans may also be perceived as old hat and part of a public sector bureaucracy which has got out of control.It is folly, dangerous and wrong to think this.
To compete as a country, the constituent local parts play a vital role, and we need to do what every other country and successful locality does and strategically plan our local economies. Even in the more economically vibrant parts of England, we need to maintain an edge and restlessly assist economic success in perpetuity, through forward thinking strategy and plans. Our international competitors are.
Of course, the absence of strategy and some scattergun policy may give some economic success and growth, but lessons from countless localities at home and abroad, tell us that it will tend to be more spatially uneven, make existing social and economic divides worse and will be transient and footloose, moving on, come the advent of cheaper labour or costs elsewhere.
Sound economic strategies and plans and linked up development policy are not a predicated on large amounts of public resources. For instance CLES’s work on economic resilience majors on creating new place based economic strategies which focus on the conditions for success, reducing the need for heavy interventions in the future. This work highlights how place policy is economic policy. Who wants to invest, live or create wealth in a bad place?
Local and Central government needs to urgently start taking local economic development a lot more seriously and start thinking about new ways of delivering on it. Disconnected policies and thin narrow strategies will not do the job.
LEPS: Be bold, but we need to focus on what they are going to do
When I first read/heard about Local Enterprise Partnerships (LEPs), I thought yippee! Here we go - a cultural shift in local economic thinking, a special purpose body, like I have seen in the US or Japan, designed to ‘turbo-charge’ enterprise and serve as a means of rebalancing local economies.
A bit less about form, less about process and more about the fundamental economic conditions. However, as the weeks have passed, I’ve grown uncertain, the old culture of partnership is slipping in. LGC and Allister Hayman have been taking the lead in documenting this debate around structure, form, geographies and which area is joining with whom.
Some LEP thinking would appear to be less about challenging the fundamental conditions to success and rebalancing economies, and more about being all things to all people.
There is a danger, that they become wish lists and we end up with another nebulous economic development partnership and ‘talking shop’ - however, this time with less money!
Fair play to Eric Pickles though! He has thrown down a challenge, and is quite clear in saying to local government that LEPs are ‘…up to you. Be as ambitious as you can. Be as radical as you like. Be as bold as you want’.
This challenge is energising.
However, as I have previously argued we are in danger of getting carried away with being bold about form without truly considering function.
It is great to be energised, but boldness is not about doing whatever you want and just claiming power for powers sake, we need boldness which is grounded in local need and context and is new power with purpose.
Radical is not about ripping up the past and filling it with some dreamy economic future, it is about creative and focussed action. Ambition is not about statements, its about achieving realistic goals. We need to be bold, however, LEPS need to make a fundamental difference.
There has to be many different types of LEPs. Local economies are not the same. The LEPs in core cities and city regions, and in areas where we have Multi Area Agreements, have some of their own resources and capacity.
They can create LEPs which are successors to existing LSP economic partnerships. They should gain RDA power and be enabled and emboldened to join up all the sectors and be the integrated body, covering the multifarious streams of ‘the economy’. However, this cannot and perhaps should not be the model for all.Many locations will have very little economic resources or capacity.
In these locations, there is a crying need to go back to first principles, unpick the problems through good evidence, focus on the key barriers and impediments to growth and rebalancing economies and create LEPs with tight remits.
How to do we create LEPs that make a difference? The Centre for Local Economic Strategies (CLES) ‘resilient economies’ work, tells us, that we need to look at the basic relational elements within the economy which lead to growth conditions and economic rebalancing.
LEPs could be akin to best practice in public/business alliances, which are common in many parts of the world. They would both challenge the practice of economic development in local government and confront private business and chambers of commerce to rethink how they operate, whilst at the same time allowing them to nurture innovation and a new context to doing business.
This means honing in on rebalancing the relationship between the social, commercial and public economies.
In practical terms, this means a relationship which forges a new way to harness wealth creation locally and adopts new ways of funding and de-risking investment. It is about obvious things like procurement, local buyer networks and supply chains.
We also need a new culture between commerce and the social economy. This is not just about simple corporate social responsibility, instead it is about new forms of philanthro-capitalism, and a build-up of innovative capital, accelerating social entrepreneurship and developing social businesses.
As a profession, economic development does not lack ambition. We know what the ultimate goal is. Speak to any economic development professional anywhere in the world and the holy grail is a successful economy(not necessarily growing!) which is integrated and connected up to high levels of well-being, inclusive social outcomes and the nurtures and protects the environment.
This is the radical and ambitious goal. However let’s be honest, many places are starting with deep seated conditions - structural economic and social problems which have been around in some instances for over 30 years.
LEPs need to recognise this, get down to the basic foundations, look at the relationships and start to make the changes which will reap rewards in the long term.
Local Government needs flexible geographies
Recently CLES have been working with Localis and RegenWM on localism in the West Midlands. We have had some stirring debate about local government, power and the regions. When I discuss economic governance with CLES members and local government, the abiding message, is that we need flexibility. In this, I believe we need to be very wary of placing too much of a focus on new forms and institutions, and avoid assumptions that there is an easy made spatial fix.
The recent report and commentary by Paul Carter, Leader,Kent County Council,is a welcome addition to this debate. Though the idea contained within an LGC article that there should be formal sub regions is problematic. In economic terms we need flexibility which allows local authority areas to work together and do different things at various geographic scales. We need collaboration which is labile, majors on effectiveness not just raw efficiency and is capable of economic and environmental change and dealing swiftly with this change. We need arrangements which major on local function (thepurpose) not form (institutions). For this to happen, we cannot get so hung up about fixed institutions at specific scales.
Take the tortuous opposition party political policy proposals on RDA’s. Firstly the Conservatives and the Liberal Democrats said they would scrap the RDAs, then when they start thinking about function - which should have been their starting point in the first place - they now see the need for some regional function and rush to suggest a new form. John Thurso, the Liberal Democrat spokesperson has now said they would introduce ‘Regional Enterprise Boards’, whilst Caroline Spelman, the Shadow Local Government Secretary now says that the RDAS will ‘therefore evolve into ‘local enterprise partnerships’.
From a starting position of getting rid of the form, they now have jumped into another form without really appreciating that we need flexibility and variation depending on location and functional need. In short, as Paul Carter rightly states ‘building blocks’ of groupings are required. However, these need to be linked to specific function.
In economic terms, the need for flexible institutions and a greater focus on purpose is vital for 3 key reasons.
We have polycentric sub regions and counties.
We do not have fixed geographies or single coherent entities. Our Urban Mets of Dudley and Bury and our towns of Bury St Edmunds, Tonbridge or Burnley have strong economic identities forged through centuries and need nurturing not squashing under overly clunky singular sub regional economic visions. Our counties, sub regions and cities are not ordered neatly. They do not always have a central county town or a comparatively even growth and economic identity based around the CBD (see previous blog).
Societal and environmental trends are moving us to localisation.
Societal trends, environmental concerns and cultural moods are telling us that we should we thinking about localising, reducing economic footprints andmaking economic decisions which are closer to people and communities, not just aggregating them up. As its stands we are in danger of hollowing out our appreciation of district shopping areas and local economic activity - delocalising our economy.
Economic themes have a variable spatial fit.
The correct scale for delivering on skills is not the same for transport, or for the benefit system. The best and most efficient scale at which to deliver onpolicy and services is not the same scale for all topic areas or the same by geographical location.
We therefore need forms, which are more able to be temporal, differentiated and nuanced by place. Assumed blanket solutions such as sub regions or Statutory City Regions will not be the way we need to progress in all locations, and I suspect many urban local authorities who are part of emergent cityregions have significant doubts.
To progress to a greater flexibility, we need to build on the existing power shift toward local government, allowing local government to drive county,regional and sub regional agendas, moving power over economic decisions away from Whitehall. This required variable and flexible geometry cannotcome with fixed institutional strings attached. A flexible form must follow function and power must be transferred to collaborating local authorities in this.
So can we now please start having more of a debate which at its core majors on flexibility and appreciates that form must follow function – creatinginstitutions if need be, but as an end point of a process which local government gets the power to shape.
Neil McInroy is chief executive of the Centre for Local Economic Strategies
Snuggle Cities
“We are the north”, “we are the south”, “we are the east” and “we are the west”, rang around the Etihad stadium in the regenerated Melbourne docklands two weekends ago as Melbourne Victory thrashed the visitors from the Gold Coast 4-0. The spatial references were based on the compass points of the old Melbourne victory stadium.
Whilst not a patch on our own football chants, it stimulated myself and my host colleague who directs urban revitalization at VicUrban (the Victoria state development agency), into another conversation about how cities are a melting pot of different places. We laughed, as we had already been having this conversation intermittently all the previous week. CLES work on place resilience had brought me here to Melbourne, and this soccer game was meant to be an opportunity to have some time away from the subject!
Like our own major core cities, Melbourne is characterised by renewal and managing change. Victoria State Government, the city and VicUrban are having a ongoing conversation about the changing function and role of the various places which make up this rapidly growing pacific rim city of 3 million people, made up of 31 local Authorities.
Their plans are to create a multi centred city, which aims to retain the recent renaissance and effervescence of the Central Business Disrict(CBD), whilst developing the various secondary centres.
Take one secondary centre - Dandenong. This is potentially the cultural jewel of Greater Melbourne, with waves of immigration having organically made this an underdeveloped microcosm of Australia’s multiculturalism. Like Bury in Manchester City Region or Bradford in Leeds city region, Dandenong is in bed with and part of Greater Melbourne and to some extent plays second fiddle to the CBD of the greater city region. However, it also has its own Local authority, and its own vibrant identity and economic functionality. Like our own ‘secondary places’, the trick is to create economic development activity in these places, which does not erode the success of the CBD. They can’t collide. They are forever joined and are in bed together and they need to cosily ‘snuggle’ together.
However, there may be a problem in the UK. In much thinking, economic success is often conflated to mean the CBD or the peripheral business parks. In the ongoing Multi Area Agreement process as well as with the new local economic assessment duty (where applied at a pan city regional basis), there is too little thought given to the 'secondary' centres.
City regions are as much about Bury, or Bradford as they are about the city centre. These places should never become economic dwarves and/or dormitories which merely serve the CBD. We cannot let CBD’s suck the economic identity out of our local places, or let economic development of the CBD weaken local economic regeneration. They need to snuggle with the dominant partner which contains the CBD.
If we are to forge new city renaissance, our enhanced city region thinking should create true polycentricity, allowing local place identity to shine through and support the forging of new economic futures in these localities.
In espousing this view, colleagues have said I am either on a nostalgic heritage trip, and/or running against the logic of economic success. Maybe, but the geography of economic growth of recent times has not really been all that successful. Spatial trickle down is exactly that and our city regions are more spatially unequal.
I believe a place based economic function which snuggles places together, makes future sense. It is in these ‘local’ centres where place distinctiveness is most evident. These places are the guarantors of a richer more meaningful aspect of a cities economic landscape.
We also need to nurture local economic activity. Local centres within cities are where the most vibrant manifestations of ‘localisation’ takes place, as regard land ownership, non chain and independent local economic activity. Bury market, like the Afghan Bazaar or Little India in Dandenong, are not some relic or weird novelty, but a demonstrable and important part of the cities economic identity.
The success of Bury and Dandenong and the wider city regions to which they belong are intrinsically related to all the places within a city region. The challenge is getting all places within a wider city region to economically snuggle.
