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Chris Richards: The business case for unitary councils is undeniable

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Manufacturers want to see more economically empowered local government across England.

Such councils could deliver faster and forward-thinking decisions, strengthening local business environments, as well as providing a robust voice for industry on the national and international stage.

The classic success story is Rolls Royce, which in the early 1900s chose Derby as a base of operations. The forward-thinking council offered cheaper electricity, the new game-changing technology at the time.

It is historic decisions like these that help make UK manufacturing eighth in the world, generating wealth in the real economy through 44% of total UK exports.

Productivity growth is also running ahead of the whole economy average, helping to deliver on living standards through higher wages than the rest of the economy.

But there is fragmentation in local government structures which limits the art of the possible. And the impact of that is felt by industry – most of which is based in two-tier areas. These companies report disjointed decision making, an over-focus on short-term tax generation, and weak capacity and capability to deliver on economic development.

Devolution offers a chance for local government to deliver what manufacturers want. But the majority of those taking up the opportunity are in single-tier areas – reinforcing the views of manufacturers that fragmentation doesn’t deliver.

Local government reform is an opportunity to put the authority back in local authority by giving areas the heft they need to deliver for communities and businesses.

The housing and communities secretary, through recent announcements, makes clear he will entertain proposals for reorganisation. And the evidence for such a move is clear.

EY analysis shows the benefits of large unitary councils from a cost point of view, reporting that creating a single unitary authority in each county council area in England could result in a net saving of up to £2.9bn over five years.

LGC’s own survey of local government officials in 2016 showed every single council type had a majority of officials in support of reorganisation, with 64% of district officials agreeing “there are too many councils in my area”.

The now forgotten No Stone Unturned report, which was authored by Lord Heseltine and which championed localism, also set out the need: “The costs of the two-tier system are simply unsustainable. The advantages in increasing effectiveness and freeing resource for the benefit of communities will outweigh the pain.”

But there is a wider unquantifiable benefit that manufacturers see as a gain – the opportunity to have proactive local authorities working hand in hand with businesses to deliver productivity growth, and with it higher living standards, making local government once again the master of place.

Chris Richards, head of business environment policy, EEF








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Readers' comments (1)

  • What exactly is 'the art of the possible'? I keep hearing this buzz-phrase everywhere.

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