Incentives for Local Growth at the Conservative Fringe

As control of economic development is increasingly devolved, local authorities are grappling with two key questions. How do we effectively link public policy and private business enterprise? And how do we ensure widespread access to any wealth that is generated?

LGiU and Westminster City Council teamed up at the Conservative Party Conference to discuss how local authorities can use their assets and resources to drive economic growth.

Investment in the public realm is vital to local business development, argued Cllr Philippa Roe, leader of Westminster City Council. Inadequate transport systems will inevitably hamper business development and enterprises based in Westminster have voiced concerns about the pressures exerted upon local infrastructure by demographic changes. Over the next few years, for example, the London Underground will see a 60% rise in demand.

Cllr Roe also expressed the value of formulating education policy in relation to the skills in demand within the locality. She argued that the current system, by which pupils’ interests direct education provision, does not maximise productivity. Cllr Roe’s argument is certainly logical, but we mustn’t forget that young people may well aspire to pursue careers away from home. Nor must we deny young people this opportunity.

Linking public sector reforms and economic growth strategy does indeed make perfect sense. In practice, though, the matter is complex. What exactly do we mean by the term ‘local’? Economic development does not obey administrative boundaries. While many of those who generate wealth in Westminster live beyond the council borders, much of the money created by Lambeth Council’s population leaks out of the area. How best to ensure that citizens benefit from the enterprise in which they engage? How best to ensure that employment opportunities are easily accessible?

Such issues have long caused a political headache. Labour’s Regional Plans received a damning evaluation from Mike Spicer, Director of Research at the British Chambers of Commerce. Spicer pointed to endless disputes between central government, councils and the public. If growth incentives are to work, local leaders must ensure that strategies align the concerns of regional partnerships.

Cllr Sean Anstee, Leader of Trafford Metropolitan Borough Council, believes he has found a solution. He cited the valuable role of the Greater Manchester Combined Authority and its Local Enterprise Partnership. Resultant investment in the Metrolink, for example, has ensured that jobs created in the city are available to citizens from across the region.

So, do LEPs hold the key to overcoming administrative boundaries when formulating incentives to drive local economic growth? Or do we also require elected mayors for cities such as Manchester and Birmingham? While the local growth headache continues, co-operation amongst councils and private enterprises in the formulation of public and economic policy is producing some useful initiatives.