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Warning ability to deliver economic growth 'eroded' by cuts

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Councils’ ability to deliver economic development and growth are being “eroded” at a time of greatest need, the Institute of Economic Development (IED) has warned.

There are now concerns councils will not be able to help deliver the broad goals set out in the industrial strategy.

A survey of 60 senior managers working for upper and lower tier councils found 38% had had their budgets cuts by more than a quarter since 2012-13, with 37% saying they do not believe any extra funding will be made available. In fact, just under a third (30%) said more cuts are likely while just 10% were expecting an increase in economic development funding as a direct result of retaining a greater share of business rates.

IED executive director Nigel Wilcock said: “Members of the profession have seen dramatic cuts to resources and, despite generally believing the importance of economic development has increased, many remain incredibly anxious about their ability to deliver in the future.

“What is clear is that, in England in particular, structures for delivering economic development are being eroded – ironically at the very time when central government has signalled its greatest intent to deliver.”

Continuing to cut budgets for economic development will mean many of the industrial strategy’s aims will be “undeliverable” as under-funded departments “will be unable to turn the broad-brush strategy into tangible outputs”, said Mr Wilcock.

He added: “The IED recognises that resources are scarce, and also that the UK has a number of structures for delivering economic development functions, but the profession is in place to bring rigour and a structured approach to achieving the goals set out in the industrial strategy.

“The industrial strategy has been set out at a national level with an objective for the themes to be cascaded locally. This research shows, however, that the profession in place to deliver the plan has been denuded of resource and without action there is a risk that local delivery of national aspirations will become impossible.”

The survey also found 35% of respondents felt their functions could be better understood by members. While 48% said they had been able to show very clear and quantified benefits of their work, another 40% claimed there was a sense that projects have delivered value but evidence for these had not been gathered.

Despite these issues and challenges, 38% of respondents believe economic development will be central to their local authority meeting its economic and financial aims over the next five years. A further 28% said that economic development would increasingly help their authority meet its economic and financial aims. Only 5% thought that economic development would no longer exist as a function, but 20% felt it would be increasingly marginalised as other pressures consume their local authority.

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