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Proactive places and big cities to benefit from industrial strategy

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At first glance the long-awaited industrial strategy offers little to excite local government but there are potential opportunities for areas to exploit, according to experts.

The fact the government is backing local enterprise partnerships to take a leading role in developing and implementing local industrial strategies instead of councils grabbed many of the headlines in the sector.

The first local industrial strategies are due to be agreed in March 2019 – the same month Britain is due to leave the European Union.

What exactly they will entail is not yet completely clear but the white paper says they will ultimately seek to improve skills, increase innovation, enhance infrastructure and grow business. They must also be “aligned” to the national industrial strategy and “agreed with the government”, indicating Whitehall has not quite managed to let go of the reins completely.

Ben Lucas, managing director of Metro Dynamics, said while the industrial strategy contains “no great surprises” it outlines “a direction of travel that has got to be grabbed by places”.

“It will be up to places to be as ambitious as they can be, whether that be councils, LEPs, or combined authorities,” he said.

He said the fact that there is “some degree of a localist approach is to be welcomed”, said Mr Lucas.

Urban versus rural

However, Centre for Cities’ head of policy and research Paul Swinney said in a blog that the industrial strategy is “far from ‘place-based’” and “has not clearly set out how it will address the productivity underperformance of places outside of the” south-east.

“The onus now falls on to the cities themselves to set out how they are going to use the tools at their disposal to address the productivity challenges they face,” said Mr Swinney.

The white paper said the government “will prioritise areas with the potential to drive wider regional growth”. While the paper in general does reference rural as well as urban areas, it also pointed to the fact that large cities across Europe “tend to be motors of growth” and that “most English cities outside London” have not yet reached their full potential, suggesting the government’s focus might largely remain on urban areas.

The County Councils Network has warned the strategy appears to have an “over-emphasis on cities”.

Skills

The white paper does reference the fact it will hand control of adult education budgets to mayoral combined authority areas in 2019 but adds “devolution is only a part of the solution” with “productive partnership working and meaningful local influence” cited as “equally important”.

Under the plans set out in the white paper, LEP’s skills advisory panels are to be given a “key” role and “have real, meaningful influence over” 16+ education and training. Exactly what influence they will have, and how they will be given it, is not yet clear.

Skills advisory panels are not new – they already exist within LEPs as sub-groups although their remit and size of membership varies from area to area. As with LEPs in general, there are no public elections in relation to who sits on a skills advisory panel.

Role of LEPs

After a couple of years in which most of the country’s councils have been unable to agree devolution deals with the government, in part due to objections over adopting an elected mayor, it is perhaps little surprise the government has sought other solutions to oversee regional economic growth and LEPs do operate at scale.

Nigel Wilcock, executive director of the Institute of Economic Development, said the process for developing local industrial strategies is “not without local authorities” as is the case with drawing up strategic economic plans now. Those, he said, had recently been updated by many LEPs and he questioned whether they would need to be rewritten to fit in with the government’s agenda.

After three industrial strategies in a decade, Mr Wilcock hoped this is “the last strategy we have for a while” so the private and public sector can better plan for the future.

Neil McInroy, chief executive of Centre for Local Economic Strategies, said the country’s “messy governance” structures “could’ve been made worse by giving more powers to LEPs”.

He said the “technocratic” white paper had largely ignored public sector reform and the “human” side to increasing productivity. He said “LEPs aren’t into that space” whereas councils are.

Much of the consternation over handing responsibility for local industrial strategies to LEPs stems from concerns over their accountability. Communities secretary Sajid Javid called LEPs’ governance structures into question earlier this year, while the chair of the Commons public accounts committee Meg Hillier (Lab) this week branded the government’s decision to put LEPs in charge of local industrial strategies “incomprehensible”.

A set of “more clearly defined… activities and objectives” for LEPs will be outlined early next year, the document said. These “will be driven by influential local leaders, acting as figureheads for their area’s economic success”, it added. The ‘modern alderman’ role proposed in the green paper earlier this year did not though get a mention in this week’s document.

The government is also to make “additional financial resources” available to LEPs, especially those which “demonstrate ambitious levels of reform”.

Speaking on behalf of the LEP Network Christine Gaskell, chair of Cheshire and Warrington LEP, and LEP review panel member, said LEPs “are entering a new phase of their development” and added “the government’s focus on strengthening their future role is vital to that”.

She said it is “incumbent” on all LEPs to ensure they have “a culture of openness and transparency” underpinned by “robust policies and procedures”.

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