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Adam Lent: Industrial strategy shows government blind to councils’ growth agenda

Adam Lent
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It must be so boring to live in Germany. They’ve had the same industrial strategy for seven decades.

We get three in under ten years. Each of ours has said pretty much the same thing so the novelty is admittedly starting to wear off. Extra support for research and development, backing for a handful of sectors that everyone knows to be the future of everything, and renewed commitment to extra skills and training.

The difference has been in the circumstances. The first, launched by Peter Mandelson was a response to the frightening prospect of long-term weak productivity and growth in the wake of the 2007-08 financial crisis. The second, Vince Cable’s baby, had to deal with the reality of that long-term sluggishness as well as the economic risks of austerity. The latest offering from Greg Clarke scored the hat-trick of challenges adding Brexit to a struggling economy and seemingly endless austerity. If we get a fourth industrial strategy in the next three years, it may be time to panic.

This rather doleful history does raise the inevitable question about what these serial strategies actually achieve, given none has managed to resolve the initial problem that inspired their launch. The truth is, as the German experience shows, industrial strategies have an impact over decades, not months or years. The constant relaunching, dropping and relaunching is a much bigger issue than the content of the strategies themselves. It seems extremely unlikely, however, that this white paper will change that given the political volatility currently afflicting the country.

This is one reason why the devolutionary zeal of the coalition was so welcome. Passing responsibility for economic health down to local authorities would not just ensure more tailored policy programmes; it also promised much greater consistency and longevity freed from the vicissitudes of the national political scene with economic policy consensus and political stability in far greater (if not total) supply at the local level.

There was much hope that this white paper might relaunch that devolution agenda. That seems not to be the case. There is much talk of local industrial strategies but little explanation of what they are for. Beyond one line about them acting as a “guide” for local and national spending, there is nothing about how they will be supported, resourced or implemented.

Despite this, the government seems to have chosen local enterprise partnerships as its favoured institution for the development and administration of these local strategies (outside of the combined authorities). With admirable honesty, the white paper admits that LEPs might not be quite up to such a role and so commits the government to a rapid programme of reform and capacity-building, which we are told will include the identification of “influential local leaders, acting as figureheads for their area’s economic success”.

Councils may well be left scratching their heads (or more likely tearing their hair out) about the government’s blindness to the capacity, democratic leadership and burning appetite they have to deliver local growth. This feels like a huge missed opportunity generated by central government’s abiding mistrust of local councils, not to mention its unwillingness to acknowledge its own failures to deliver economic change over the last decade. Of course, economic geographies matter and individual councils might not always be perfectly placed for that but when the energy and drive for innovation, investment and growth exist in a particular institution it seems crazy to overlook that when the headwinds are blowing as strongly as they are.

This feels like a white paper written by a government struggling to find its way. It’s hard to blame ministers for that. Distracted by Brexit, hemmed in by weak public finances and stunned by a stalling economy, the government has limited options. It is just a shame that in its time of trouble, the government has failed to recognise it has an energetic ally in local government. Maybe it will in the next industrial strategy.

Adam Lent, director, New Local Government Network

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