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Adam Lent: Councils are the drivers of economic growth

Adam Lent
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York Central is one of the largest brownfield site developments in Western Europe.

Its goal: to add £1.6bn to the economy of York, build 2,500 new homes, 100,000 square metres of commercial space and, most importantly, create 6,500 jobs.

At the heart of the project is City of York Council. Its role, however, is not the traditional one of overseeing planning and regulatory compliance but as a proactive catalyst for the project, convening key players such as Network Rail, the Homes and Communities Agency and private developers; in effect, being the visionary drive behind the whole thing.

York is far from alone in seizing the initiative on local growth in this way. Across the country, councils seem to be focusing as much on driving local growth as on service delivery. This makes sense. A vibrant local economy offers the prospect of a more secure and bigger tax base at a time of straitened finances. It offers the best and most humane route to reducing the demand on services that is driven by deprivation and unemployment. Maybe most significantly, being a growth agent is all part of the new place-shaping, change-making role that an increasing number of councils are keen to adopt.

Given the rather fearsome economic headwinds facing the country, central government should be doing a great deal more to use this energy to drive growth and ramp up productivity. A more vigorous and unequivocal pursuit of business rates retention should be a first step. A white paper that places councils’ unique convening and place-making power at the heart of developing and delivering local industrial strategies would be another. And, of course, giving local government the powers it needs, such as more control over key labour market policies, to create growth plans that can address local weaknesses and exploit local strengths.

These steps would add even greater drive and energy to the vital embrace of the growth mission being displayed by local government. They would negate the need to introduce a statutory duty for economic development: a recent call on the pages of LGC. Unless such a duty were to come with a very significant slug of public money (an unlikely event given current fiscal realities), it would only add to the enormous financial pressures on councils. Such a duty would in all likelihood mean stretched budgets being stretched ever thinner leaving existing statutory responsibilities, notably adult and children’s social care, in an even more fragile state.

Far better to work with the grain of existing thinking and strategy in local government by developing a policy programme that incentivises and deepens councils’ commitment to economic development without imposing yet another duty from on high.

Adam Lent, director, New Local Government Network

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