Councils should combine their borrowing powers and become “social venture capitalists” to counteract cuts in regional development funding, a thinktank has suggested.
A report from the New Local Government Network suggests projects stalled after a £4bn drop in funding could be kick started with the creation of ‘Revolving Investment Funds’ if councils were willing to take the initiative.
The thinktank also called on the government to extend the city deal process with a series of local enterprise partnership deals giving powers on skills and infrastructure and devolve 5% of the skills budget to councils.
Councils should also fund and create new Group Training Associations to help small and medium sized funds with staff training, according to the report entitled ‘Grow Your Own: Skills and Infrastructure for Local Economic Growth’.
The report also revealed government policies such as LEPs, tax increment financing, high-speed broadband and business rate retention have failed to impress. A survey by NLGN showed local government gave the coalition’s policies just 4.6 out of 10.
NLGN director Simon Parker said there needed to be further devolution of powers from central government.
“While central government is focused on deficit reduction, councils are increasingly taking on responsibility for delivering growth,” he said. “Opening up a new era of social venture capitalism requires local authorities to overcome historical boundaries and collaborate across cities and shires to unlock investment.”