The industrial strategy has been widely welcomed, but there is much to be resolved about its delivery. Claire Read reports on an LGC roundtable sponsored by Grant Thornton
When Martin Tett read the 10 pillars detailed in the government’s industrial strategy green paper, he found very little with which to disagree.
“Put the word ‘don’t’ in front of any of these. How would you say: ‘Don’t invest in research and innovation’? ‘Don’t develop skills.’ ‘Don’t upgrade infrastructure.’
“We’re all going to say: ‘Let’s do this stuff.’ The real test is where’s the resource? Where’s the competency to actually deliver it? How well will we utilise whatever money or resource we actually get? How successful will it be?”
Cllr Tett, leader of Buckinghamshire CC and chair of the environment, economy, housing and transport board at the Local Government Association, was speaking at an LGC roundtable debate held last month in association with Grant Thornton. His words served as a neat summary of the issues he and his fellow panellists had come together to debate: how helpful is the industrial strategy to local government, and how can councils get the most from it?
Guy Clifton, head of local government advisory, Grant Thornton
Paul Dossett, head of local government, Grant Thornton
Simon Edwards, director, County Councils Network
Nick Golding, editor, LGC (roundtable chair)
Gavin Jones, chief executive, Essex CC
Mike Palin, chief executive, St Helens MBC
Kathryn Rees, assistant director for transformation, Wigan MBC
David Smith, director of economic development, Kent CC
Martin Tett, leader, Buckinghamshire CC and chair, environment, economy, housing and transport board, Local Government Association
For Gavin Jones, the strategy had already proved valuable by provoking debate locally. “We really welcome in the industrial strategy,” said Mr Jones, chief executive of Essex CC. “Not least because it’s helped us to create some useful narratives in Essex, and engaged people in a conversation. For us it was very timely because we have an economic commission. So this strategy, alongside that commission, has really helped us.”
Guy Clifton, head of local government advisory at Grant Thornton, was similarly welcoming of the national strategy. “As a nation, for decades, regardless of who’s been in national government, we have been decidedly unimpressive in terms of long-term strategic planning [on industry]. So it’s very positive that this is something that is being looked at and that the green paper has been published.”
It was a point with which Simon Edwards was in firm agreement. “The biggest fundamental barrier to improving industrial strategy and economic growth in the country is a lack of any national strategy for as far back as any of us can possibly remember,” argued Mr Edwards, director of the County Councils Network.
“Other countries have a clear national industrial and economic strategy. We don’t really have one, we’ve never really had one. The industrial strategy offers us an opportunity to actually help develop a national strategy from the bottom up.”
That would, the panellists suggested, require input and intelligence from councils across Britain. “[Central] government is not a very good judge of what’s good for individual, different parts of a country,” said Cllr Tett.
“It tends to have a fairly broad, vanilla approach to things. You need to get the right balance between the macro picture but locally you’ve got to have the right competencies and skills to take the overall picture and fine tune it for your area.”
Mike Palin, chief executive of St Helens MBC, added: “Our economic policy, like it or not, has a macroeconomic framework at the national level. There are things at the macroeconomic level that need to change to be able to support growth in local areas. That needs to be recognised or the green paper risks being a list of initiatives without actually recognising some of the fundamentals. It has 38 questions, 10 sections, and each section’s got at least five or six things that have been done. It really did feel as if it was a bit of a brain dump rather than actually saying, ‘What do you need to change at the national level to make ourselves more competitive?’”
Mr Clifton echoed the point. “It’s critical that local government sees this as an opportunity to put back to central government what the sector can do at a local and subregional level, and what sits with national government to then take forward.”
This is not to say the panellists were planning to abdicate total responsibility for economic growth to Whitehall; quite the opposite. “I fear some of the very big issues only central government, and only legislation, can manage,” said David Smith, director of economic development at Kent CC.
“[But] we need, collectively [as councils], to have a better voice. We [need to] produce a programme which says: ‘We can do a lot locally and subregionally. We can take some of these responsibilities. Empower us; help us finance it.”
Mr Palin spoke of the need to recognise evolving markets: “If I take St Helens, we had 20,000 people employed by [glass firm] Pilkington alone in the early 1980s. It is now Japanese-owned and employs 460 in the town. That is a huge change, on top of changes in coal mining. Before St Helens was a glass and coal town, it was a pharmaceuticals town; Beecham’s is a St Helens brand. So places like St Helens need to know what their new opportunity is, what their new market is now.”
The answer, he said, does not necessarily lie in non-traditional industries, despite what many local economic strategies might suggest. “In St Helens, our opportunity is in logistics and the supply chains around the country,” Mr Palin said, citing its proximity to major motorways, rail links and the Port of Liverpool.
“We’ve got to respond to the market. Too many places don’t recognise that. In every single digital strategy around the country, you’ll see digital and life sciences references. But lots of places have no good future in those industries and shouldn’t be referencing them.”
He felt responding to the market required councils to be fleet of foot, and said he was not producing a traditional economic strategy precisely because of that. “It’s not sufficiently responsive to the market. The strategy is actually understanding the market opportunity and facilitating it as best we can, not the production of a document, because it would be out of date as quickly as we produce it. It’s a very different way of thinking.
“We have an [economic] board at local level. That board is not made up of any councillors, but it is made up of a senior representative of the Port of Liverpool, and a local businessman who became chief executive of HSBC Hong Kong & Asia, who doesn’t live in the borough any more. They are there to give the place a bit of a kick up the backside, to say: ‘There’s a market opportunity, go and grab it,’ rather than ‘let’s do an action plan that says we’re going to do this, we’re going to do this’.”
In Kathryn Rees, the discussion had another representative from a traditional coal town. The assistant director for transformation at Wigan MBC revealed she had recently visited a local school and found pictures on the wall of the area’s coal mining days. But she felt strongly it was important to also engage young people in discussions about what future industries might be and to equip them to realise the opportunities on offer.
“Getting the right skills to support economic growth is a challenge,” Ms Rees said. “There needs to be some kind of work to think about an integrated education and skills approach at a local level.”
Paul Dossett, head of local government at Grant Thornton, also emphasised the importance of this area. “Clearly we need to have a highly skilled workforce to deliver what the industrial strategy is aiming to bring to the country.”
“We’ve got to get skills right,” agreed Cllr Tett. “It’s far too centralised in this country; the way in which skills are funded and the way in which they’re directed. We really need to get the skills budget devolved down to a more local level but that has an onus then on a local level to really understand what needs to be done.
“Simply passing it from government departments that don’t understand what needs to be done to local areas, that themselves think they know what needs to be done but don’t really, won’t actually solve the problem.”
Mr Edwards said the skills agenda represented “a national scandal”. “Two thousand seven hundred hairdressers trained in Essex in 2014 for 270 jobs,” he said. “That goes on year after year after year and that’s not beauticians, that’s just hairdressers. That is happening across the country because the further education colleges are paid for bums on seats.
“We cannot do this anymore. It cannot be allowed to happen. We need a national, regional and local economic skills strategy in which we work with our businesses to predict what our opportunities are to make sure that we’re commissioning [the right skills provision].”
LGC editor Nick Golding, chairing the debate, asked what new skills within councils would be necessary to delivery economic growth. Might authorities also need to consider bringing in new people and new mindsets if they are to drive growth and truly capitalise on the industrial strategy?
For Mr Palin, it was a case of understanding which aptitudes were and weren’t likely to be found within a council. “There are not a huge number of good capital project investment structure people in the north-west of England, and I don’t actually need them in my authority 100% of the time. So my approach would be to have a contract with a consortium.”
The key, suggested Mr Jones, was to ensure all staff have a common understanding of their council’s aims. “There’s no point in bringing in great skills into an organisation that is not collectively aligned against a common goal,” he argued. “All you’ll do is have really bright people that are hitting a brick wall in their own organisation, and then you’ll lose them.”
Aligning towards a common aim when it came to economic growth might mean acknowledging different measures of success, said Mr Smith. “I don’t think we should be thinking in terms of success as being jobs. Young people who are joining the economy, do they see themselves when they make money as having a job? Or just earning money, or spending it?”
He continued: “If we look to the future – I don’t mean tomorrow, but a few years into the future – if we just measure ourselves against jobs we’ll all fail because we’re hanging ourselves on a 19th century model of industrial strategy. I don’t know what the future model looks like.”
Can the government’s industrial strategy be the foundation for growing prosperity well into the future? Mr Edwards said: “The strategy is fine. The richer question to ask, though, is how are we going to make it happen together? No-one is really arguing about the detail of it.
“So where is the conversation with the local delivery partners that gives a shared sense of how you bring it to life? What does it take to make it a reality as opposed to a statute?”
Many of the answers were suggested during this roundtable. But turning those suggestions into reality will be a challenge for local and central government alike.
Expert comment: A blueprint for a vibrant economy
Grant Thornton welcomes the plans put forward for an industrial strategy, which will be vital in helping shape a vibrant UK economy.
From our work advising public and third sector organisations, and businesses large and small, we recognise that:
- the UK economy has long standing strengths such as innovative services, creative industries and advanced manufacturing, and deep‑seated challenges including productivity, growth finance, skills gaps and exports
- the economy is constantly evolving; technology is transforming sectors and the very nature of work for many people
- there is an increasing ‘trust deficit’ in our society
- Brexit brings additional challenges such as market access, customs and labour market impact, but also an opportunity for us to review how best to build a truly vibrant economy in the UK.
The government’s plans for an industrial strategy provide an opportunity to:
- develop the skills we need now and for the future through wider collaboration between employers and education and training providers
- integrate business into the education system and place a greater focus on vocational skills from a young age
- encourage and embed stakeholder engagement in the supply chain, and sectoral and productivity initiatives, and reinforce this through public procurement and by celebrating examples of best practice
- stimulate the development of new disruptive businesses and encourage innovation by supporting cross-sector collaboration
- develop new collaborative forms of finance that allow corporate balance sheets to be put to work to invest in smaller businesses and enables more UK pensions and savings to be invested in dynamic businesses.
Local government can and should have a key part to play in this. By adopting a place-based approach it can help create the right environment locally for the private sector to seize opportunities. Given its powers as a convener, local government also needs to focus on better articulating how councils, NHS bodies, FE colleges, RSLs, universities and other institutions can best work together to progress.
Central government also needs to recognise where its focus should lie and readdress efforts in devolving powers and responsibilities. There is still a need for more widespread devolution, including in non‑core cities and shire areas. Without this, the framework provided by a national industrial strategy might be strangled at birth. If strategic decisions can’t be made at the right local, sub-regional or regional level, on issues such as transport and skills, and resources are not raised and prioritised effectively, then progress will be inhibited.
Our Blueprint for the UK can be accessed here.