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Forget the industrial strategy snub; the pressing problem is a lack of devolution

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LGC’s essential daily briefing.

The heart sinks the moment you open the government’s long-awaited industrial strategy – once it has finally opened, that is.

Running to 255 pages, the white paper takes a while to fully load online but, the length of it aside, it becomes almost immediately clear the industrial strategy is going to be far from a punchy blueprint for Britain’s future economic success.

The paper cites five foundations of productivity; mercifully, that’s half the number of pillars proposed in the green paper at the beginning of the year. Those are ideas, people, infrastructure, business environment and places, all of which strike a chord, but they hardly point to a radical response to what are becoming increasingly challenging economic circumstances.

Local government barely gets a meaningful mention while the most striking sections centre around proposals to get local enterprise partnerships to lead the development and implementation of ‘local industrial strategies’, not councils.

These are, of course, the very bodies that communities secretary Sajid Javid told earlier this year to “take a good look” at their corporate governance and accused of becoming closed clubs: just the organisations you want driving the country’s economic future.

Such a statement was not without foundation, as both the public accounts committee and National Audit Office had expressed concerns about LEPs’ governance and accountability structures last year.

On the face of it, this is nothing short of a snub to local authorities, especially as areas with combined authorities and elected mayors will get to have full control over the destiny of their local industrial strategies. Yet again, the government appears to be rewarding the early adopters of the mayoral model and perceivably punishing those left behind.

On the flipside, LEPs do operate at a scale that is constructive to taking strategic economic decisions. It will be important that the industrial strategy’s promise to “bring forward reforms” to address LEPs’ leadership, governance, accountability, and financial reporting issues are truly adhered.

However, who gets to lead on local industrial strategies – which are rather vaguely defined, by the way – is somewhat of a moot point.

With former communities secretary Greg Clark overseeing proceedings, hopes were high that his localist credentials would permeate right through the industrial strategy and kickstart the government’s stuttering devolution agenda.

While there are mentions of devolution in the industrial strategy, it is mostly in relation to historical actions or the devolved nations although the Northern Powerhouse and Midlands Engine are at least mentioned.

In Mr Clark’s foreword he wrote: “A serious strategy must also address the weaknesses that keep us from achieving our full potential.”

It could be argued that a major weakness, and one of the biggest barriers to economic success, is this country’s centralised system; even combined authority mayors are having trouble getting Whitehall to let go of key powers and responsibilities in relation to skills.

As Andrew Carter, chief executive of Centre for Cities, said: “Ultimately, local leaders already know what the most pressing challenges are in their places. Now the government must give them the powers and resources they need to deal with them.”

However, anyone looking to the industrial strategy to explicitly outline major plans to devolve more powers to places will be left largely disappointed.

Overall the industrial strategy is a big document containing little substance. But the fact it is quite vague could be a good thing for ambitious areas and proactive places as they might be able to further influence the future direction and implementation of this important policy.

But without the right tools and funding placed in the hands of those who know their areas best, no strategy – no matter who is in charge – will be able to deliver the improved economic outcomes each area so desperately needs.

David Paine, chief reporter

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