New ideas can solve an old problem
Author: Steven Howell, in the MJ |
While the debate continues endlessly in Whitehall about who’s responsible for the state of the economy, and which levers of power should be pulled, pushed ? or just caressed ? the fact remains that, out in the real world, most people just want to have a job.
Local government, to me, is similarly divorced from this. It matters not whether they believe in Keynes or Friedman, they just want to do their bit for the economy ? and not just to help it improve now, but to see the benefits in future years as well.
And despite the various sightings of the tiniest of greenshoots, few commentators would deny that any emerging economic recovery is fragile and that for local authorities and their partners ? such as local enterprise partnerships ? jobs and growth
remain at the top of the agenda.
While many in the economic development world would rightly point out that it’s not the statutory role of local agencies to deliver economic growth, councils have a major role to play in creating the conditions for growth: getting the right infrastructure in place; making sure that both young people and adults have the right skills to succeed; and where possible busting the barriers (real or perceived), such as regulations and red tape, that hold back entrepreneurs.
Given the importance of this role, Localis undertook a major piece of research into how local authorities could help to catalyse and promote economic growth. We also looked in more detail at the economy of the South East and its particular challenges and potential.
Through an extensive interview process with local leaders and growth partners, we uncovered a number of barriers which, if removed, could help local areas to put rocket boosters under the national economic recovery.
For the fact is that most councils still believe that they don’t have all the tools necessary to kickstart local growth ? at least not in all areas. They expressed disappointment at the size and makeup of the Lord Heseltine-inspired Single Local Growth Fund, for example, while those from non-city authorities felt somewhat disenfranchised by the perceived levels of devolution on offer.
The report therefore calls for a significant expansion of the fund after 2016 and for all areas to be given access to the freedoms and flexibilities necessary to meet their growth potential.
This quest for freedom extends to creative financing too ? local authorities have been questing for the holy grail of complete fiscal autonomy since the move away from the golden age of pre-war local government. In an age of austerity, alternatives to direct grant financing have become evermore attractive and the Government could still do more to support local authorities to make use of these ? for example: underwriting loans, which would allow local authorities to leverage in funding from capital markets and help maximise the impact of surplus public sector assets; or supporting local government’s attempt to establish a collective bond agency to reduce the costs of borrowing.
Many of the report’s recommendations are targeted at freeing local authorities to invest in supporting growth ? predominantly through infrastructure. This included planning, housing, and transport issues, but many interviewees were also quick to point out the impact broadband infrastructure has on business viability; both now and, perhaps increasingly so, in the future.
Many of those interviewed were frustrated at what they saw as barriers throughout the current superfast broadband roll out by bureaucracy and EU procurement/state aid rules, suggesting there is a need to assess what the medium and long term plan for broadband is
In the long-term, we have recommended a technology-blind approach to future broadband programmes (i.e., whichever technology works best should be used), which could help stimulate a growth in local infrastructure markets and provide revenue streams for local businesses and community organisations.
More urgently, we suggested that in its 2013 review, Ofcom should investigate whether the current regulatory framework is holding back local areas from developing their own superfast broadband solutions, and thus, local growth potential.
Local authorities will always want to support the local economy, being an essential part of what keeps a community happy, healthy and cohesive. But, without a further localist shift, they will continue to feel restricted.
As the report suggests, with just a few policy tweaks, local authorities might be able to do a little bit more to ensure that when an economic lever is pulled in the Treasury, the result is more positive out here in the real world.
Steven Howell is a senior policy officer at Localis, the localism and local government think-tank