Posted by Peter O’Brien, 12 February 2014

Sparked by the ongoing debate led by the Core Cities Group and others, as well as recent and ongoing independent commissions established to consider devolution, local funding and finance, the House of Commons Communities and Local Government Select Committee has launched an Inquiry into whether and how fiscal and financial powers could be devolved to London and cities in England http://www.parliament.uk/business/committees/committees-a-z/commons-select/communities-and-local-government-committee/inquiries/parliament-2010/cities/

The Select Committee is seeking evidence on the concept of fiscal devolution as well as attempting to gather specific examples of the tools that cities and city regions would need to embrace greater financial autonomy from UK Government. The themes under consideration reflect research that CURDS has begun recently – as part of the national i-BUILD project – into the business models, and governance and regulatory arrangements of city and urban infrastructure.

In written evidence to the Inquiry, which proceeded oral evidence given to the Select Committee, by the Director of CURDS, Professor Andy Pike, on Monday 4 February 2014, researchers from CURDS set out a number of issues that the Committee might wish to consider:

• The UK has a highly centralised system of taxation and expenditure, in an international context. Consequently, the UK needs to consider appropriate forms of fiscal decentralisation and public policy reform as a set of tools to help cities and city regions build sustainable and successful places, businesses, jobs and communities.

• Places are more likely to be successful if they possess effective, sound and high quality institutions and leadership driving forward effective visions and evidence-based strategies.

• Central-local government relationships in England would be stronger if they were underpinned by more formal (and perhaps even constitutional) arrangements.

• International evidence suggests that decentralisation alone may not generate an automatic economic dividend. However, overt centralisation of activity and governance is likely to stifle local and regional innovation, decision-making, governance and development. Decentralisation should be seen within the context of the continued importance of national-local government relationships.

• If the geography of fiscal decentralisation is fixed at too small a scale there are risks of inequalities in resource and policy outcomes. Cities and city regions need to consider carefully the geography of areas seeking greater fiscal autonomy – and if necessary improve and build effective collaboration.

• Property taxes are most likely to be decentralised by Central Government, and in line with developments in Scotland and Wales. Yet, the experience to date suggests that any further fiscal decentralisation in England is likely to be incremental.

• The UK Government is best placed to borrow at the most competitive rates from the international capital markets. However, if the policy is for local institutions to be encouraged to show innovation in their financing arrangements their endeavour should be supported by appropriate decentralised autonomy and support.

• There are a range of initiatives that cities and city regions can introduce to raise new finance. As the municipal bond market has been relatively inactive in the UK, councils will need expert advice on how to engage with what is a costly and complex model.

• Decentralisation should build on the inherent strengths of all cities and regions to the benefit of the national economy and not exacerbate spatial disparities.

Devolution in the UK context has been – and will continue to be – a process, and not an event, and any future fiscal devolution to cities and city regions is likely to come in different shapes and sizes.

Through i-BUILD and other current CURDS’ research projects exploring cities, local government, decentralisation and growth, a wide range of empirically-led analyses will examine what sort of fiscal capacity places have, and whether they have a vision and strategy, and the means to manage and assess risk properly and to borrow prudentially. This should help us to arrive at a set of evidenced-based and informed conclusions on the precise merits of fiscal devolution and what kind of powers could be devolved to what places and when.

Posted by Mike Coombes, 19th December 2013

This month sees the end of a consultation about the possibility of replacing Britain’s Population Census with an unproven alternative based on linking administrative data and sample surveys. It is well known that such a change would severely harm our ability to study neighbourhoods, but it is not so widely recognised that it would mean there will no data on the patterns of commuting and migration flows. This will not only prevent academic studies of places as ‘spaces of flows’ but prevent any definitions of the meaningful areas that have proved vital for:
• accurate targeting of local policy, plus the evaluation of labour market programmes
• research into uneven growth, and the delivery of appropriate housing and economic development
• providing a statistically consistent geography for the whole country and
• informing inward investment.

Research into the patterns of commuting and migration – ‘flows’ – depends entirely on data from a Census, because only a Census in the traditional form is able to provide robust flow data covering all small areas. One consequence of any decision to curtail the Census would be that it would mean the end of over 30 years of policy use of Travel-to-Work Areas (TTWAs). TTWAs have since the 1970s been defined for the government by analysing the fine-grain commuting data from each new Census. So why is this important?

Many policy decisions rely on comparing statistics on areas, so using appropriately-defined areas makes for better policy decisions: an area can miss out on large sums of public funds if the boundary around that area is not drawn appropriately. In the absence of TTWAs local data analyses rely on administrative areas, but their idiosyncratic boundaries distort the comparison of areas. TTWA boundaries are widely used by the UK government and others because they accurately map economic geography, and so allow comparisons of areas to be valid. Many recent urban or regional policies called for delivery by ‘functional economic area’ and the accepted definitions of such local economies is the TTWA.

The following points illustrate just some policy-related current uses of TTWAs.
• Several series of Official Statistics are reported by TTWAs, some on a monthly basis, and these are widely used for labour market policy or analysis (as shown by ONS’s Nomis database supporting many thousand TTWA-based downloads each year).
• Government policy use of TTWAs includes guidance in the Treasury Green Book on how to assess the case for government intervention: TTWAs are cited in explaining how analyses should use areas that approximate local labour markets, and worked examples are given for one application, the assessment of proposed transport investments in Scotland (Transport Scotland 2008).
• The major policies that have for a decade focussed on cities was evidenced by the State of the English Cities research which relied on TTWAs (Parkinson et al 2006); recent key developments include the announcement of City Deals that based its choice of cities on TTWAs, even though the policy is explicitly aimed at local authorities (HM Government 2011).
• Local Enterprise Partnerships were created to represent functional economic areas and the relevant policy documents repeatedly reference TTWAs as template for such areas (HM Government 2010).

A parallel development has been the need for housing market area (HMA) definitions so that housing policy is implemented across appropriate sub-regions (which potentially cut across administrative boundaries). Research for the National Housing and Planning Advice Unit has identified consistently-defined HMAs following analyses using small area data on migration as well as commuting. Even though the coalition government has shifted the scale of housing policy, it recognises that “[t]hese areas will help local planning” (Department of Communities and Local Government 2010).

There are no effective alternatives to the Census providing data on local flows of commuting or migration. Experiments by ONS to see whether APS could provide the data on commuting needed to update TTWAs found that reliable results were unobtainable. Alternative sources based on surveys are limited by their sample size that precludes data on small geographical areas – and especially impacts on flow matrices – as was confirmed explicitly by Skinner et al (2013: section 5.2.4) in their report for ONS.

Thus the availability of the Population Census small area data on commuting and migration flows remains an absolute pre-requisite so meaningful areas can be defined, making it possible to target local policy accurately, and deliver appropriate economic development, and study uneven growth.

Department of Communities and Local Government (2010) Geography of Housing Market Areas: Final Report and Summary www.gov.uk/government/publications/housing-market-areas

HM Government (2011) Unlocking Growth in Cities Cabinet Office, London www.gov.uk/government/uploads/system/uploads/attachment_data/file/7523/CO_Unlocking_20GrowthCities_acc.pdf

HM Government (2010) Local Enterprise Partnerships Letter from Secretaries of State BIS & CLG to local authority and business leaders www.gov.uk/government/uploads/system/uploads/attachment_data/file/5649/1626854.pdf

Parkinson M, Champion T, Evans R, Simmie J, Turok I, Cookston M, Katz B, Park A, Berube A, Coombes M, Dorling D, Glass N, Hutchins M, Kearns A, Martin R and Wood P (2006) State of the English Cities ODPM, London webarchive.nationalarchives.gov.uk/+/http://www.communities.gov.uk/publications/citiesandregions/state4

Skinner C, Hollis J and Murphy M (2013) Beyond 2011: independent review of methodology” Report to ONS www.ons.gov.uk/ons/about-ons/who-ons-are/programmes-and-projects/beyond-2011/reports-and-publications/methods-and-policies-reports/beyond-2011–independent-review-of-methodology.pdf

Transport Scotland (2008) Developing a Case by Case Approach The Scottish Government, Edinburgh www.transportscotland.gov.uk/stag/td/Part2/Economy/9.4.4.1

Posted by Stuart Dawley, 16th December 2013

The recent launch of the Future of Manufacturing report by the Government Office for Science marked the culmination of a 2-year project seeking to take a strategic look at manufacturing up to 2050. As part of the project, CURDS were commissioned to submit an evidence paper on the contribution of the manufacturing sector to UK resilience. Our work was one of thirty-seven evidence papers commissioned and hosted on the Foresight webpage, providing a uniquely rich and varied repository for anyone interested in the manufacturing sector. Indeed, given the ambition and depth of the analysis undertaken within the Future of Manufacturing project, I would urge strongly that keen followers of this agenda find time to head straight to the overall Project Report, rather than just the Summary Report: The future of manufacturing – project report (PDF, 5.5 MB) & The future of manufacturing – summary report (PDF, 2.4 MB)

Having attended the launch of the report, which included a speech by the Secretary of State for Business, Innovation and Skills, several key findings struck me in particular:

• Manufacturing (still) matters to the UK economy. Whilst the manufacturing share of GDP has declined more rapidly than other developed economies (Figure 1), its contribution is still significant (£139 billion). But crucially, manufacturing provides proportionately more R&D, innovation, productivity growth and export activity than other sectors of the economy.

• We are entering a new era for manufacturing, where the value chain is being extended beyond the production and sales of products. For example, 39% of UK manufacturers employing over 100 people derived value from service provision in 2011. Through notions such as the servitization of products and the rise of manu-services (Sissons 2011), a reappraisal of the place of manufacturing within the economy is overdue. This will require new metrics on measuring and defining manufacturing and also raises questions over the geographical distribution (nationally and globally) of different elements of the extended value chain.

• As well as being increasingly adaptive and responsive to rapidly changing markets and technologies, it is also striking how pressures based on environmental regulation and energy pricing are reshaping the organisation and development of manufacturing. As part of the extended value chain, increasing attention is being paid to the reuse, remanufacturing, recycling and recovery of products as part of the service and role of the manufacturers (e.g. JCD are pioneers in remanufacturing products returned at the end of their lifespan). Drawing on the notion of the ‘circular economy’ (Figure 2), it’s clear that regulatory practices that increasingly ‘price the environment’ have the potential to stimulate innovation , competition and enhanced productivity within the sector.

• There is widespread consensus that Government policy will be a vital ingredient in enabling the UK manufacturing sector to respond effectively to the new challenges and opportunities. In addition to the recent developments around UK Industrial Policy, with the establishment of 11 sector strategies and the Catapult Centres (including the High Value Manufacturing Catapult) – the report recognises that policy makers will need to develop new approaches to ensure success. Emerging from a swathe of areas identified for policy intervention, I was drawn to three overarching themes:

o Rather than thinking about horizontal (e.g. competition policy) and selective policies (e.g. sector support etc), more holistic systems level approaches are needed.
o To help bring together a more integrated policy approach, the report advocated that the UK follow the US model and develop a central Office for Manufacturing to coordinate policy. Interestingly, however, the initial response from the Secretary for State appeared reticent to the development of another layer/institutional body.
o The Secretary for State argued the need for a long-term approach to supporting manufacturing which goes beyond government cycles. Quite how this would play out in reality is less clear, although it is possible the institutional architectures of Catapult Centres, MAS etc , together with the 11 sectors of industrial policy, may offer some foundations.

Whilst the report focused on the manufacturing sector at the national scale, it nevertheless raises some critical issues for local and regional development.

• The Future of Manufacturing said relatively little about the opportunities and challenges for the sector across UK cities and regions. Crucially, the role of manufacturing in re-balancing the economy (sectorally and spatially) received little attention. Nevertheless, the report does recognise the role of historical and place based assets in the evolution and branching of new manufacturing activities, linking to notions of evolutionary economic geography and the rise of ‘phoenix industries’ (Christopherson 2009). Yet it remains less clear as to what policy support measures exist at the regional and sub-regional level to identify and catalyse the conversion of historical assets into new technological fields and markets.

• Whilst the drivers of ‘pricing the environment’ may spur innovation and productivity gains in some sectors, they raise critical challenges for many carbon intensive activities and businesses. Certain regions and localities are increasingly prone to the threats of ‘carbon leakage’ with firms choosing to move to lower cost localities.

• The recent development of the offshore wind sector, in particular in the North East, illustrates the significant challenges for integrating policy within a long-term systems level approach (see Dawley and Mackinnon 2013). On the one hand, August 2013 saw the belated development of an Offshore Wind Industrial Strategy for the UK. But on the other hand, and in contrast to the perceived secure future for renewable energy up until the late 2000s, we have since seen the delayed Energy Bill, uncertainty over longer-term CO2 targets and a renewed commitment to nuclear energy. In the words of Deputy Prime Minister recently, “The environment is being written off by campaign chiefs on both left and right: too expensive in hard times….On no other issue has the political establishment proved more fickle” (cited in The Times, 7/11/13 p. 11). Such shifts and delays could prove critical in the development of industrial capacity in the offshore wind sector in the UK, despite hosting the world’s largest offshore wind market.

Posted by Sophie Yarker, 13th November, 2013

Last month, The Institute for Public Policy Research (IPPR) and British Futures hosted a ‘Festival of Englishness’ in London. In explaining the rationale for the event, Tim Finch (IPPR) pointed to data from the census and IPPR’s own Future of England Surveys as showing a marked rise in those choosing to prioritise their English identity over a British one. In 2012 nearly a third of people living in England felt more English than British versus 17 per cent who felt more British than English, nearly 3 in 4 of those in England believe St George’s day should be a national holiday while 62 per cent express pride when seeing St George’s cross fly. The English, Finch concluded, are stirring.

However amongst such stirrings there continues to be a nagging sense of unease surrounding discussions of English identity; a sense which was addressed head-on in reference to the St George’s Cross bunting strung around the room. “It reminds me of rough Luton pubs where I grew up” one panellist said. “To me that just brings back memories of the National Front” commented another. This quickly brought the festival to the nub of the issue; the question of whether there could be an English nationalism that was inclusive and progressive and one which ultimately could reclaim the St Georges flag from its appropriation by some on the far political Right.

The sense of confusion and awkwardness around the concept of Englishness was apparent throughout.  Panellists and audience members alike slipped between talking about Britain and England; Britishness and Englishness, maybe a sign of the interrelatedness of these identities but maybe also a sign of the unfamiliarity of talking explicitly about the latter. The organisers PowerPoint was bordered with red, white and blue and a question raised of whether London was the appropriate location for such a discussion at all. Some appeared ambivalent toward expressing an identity of either English or British, insisting it didn’t matter.  Others asserted the relational nature of identity; in Scotland you may feel more English for example whereas in the US you are very definitely European.

What was most intriguing was the way both place and class infused conversation. The influence of class was demonstrated clearly during the panel on ‘humour and the English’ which opened with a poll from the IRRP Future of England survey of which TV comedy characters respondents felt best represented Englishness. Top choice was Only Fools and Horses’ Del Boy, with Hyacinth Bucket and Basil Fawlty also polling highly. The following discussion addressed the prominence of class within British TV comedy and its dealing with the contradictions and complexities of the English (or British?) class system.

The classed nature of cultural references of English identity was also evident in the artefacts panellists brought with them to summed up how they felt about Englishness. There was a fair amount of eye roiling when John Redwood MP produced a cricket ball and spoke of the significance of fair play, and a ‘spirit of cricket’, as well as a gentle mocking when Vanessa Whitburn, demonstrated Englishness with a ‘Marmalade clip’ from the Archers.  True, these artefacts may speak to a very particular, classed understanding of Englishness, but couldn’t that very need to differentiate on class terms be seen as part of Englishness itself? The need to differentiate oneself from the ‘other’ though cultural tastes could equally be added to a list of common English traits and a middle class need to distinguish between ‘other middle class people’ is no exception. 

The role of place; the regions and regional and local identity also came to the fore. At first, John Redwood MP dismissed the prevalence of any sense of regional identity in England; “I never go to bed at night thinking, goodness, I am proud to be from the Thames Valley”. This caused controversy on Twitter as well as in room itself.  Many commentators were quick to point to the proud traditions of regional identity outside the M25 corridor leading to Mike Kenny, in the closing panel, to state that such questions of national, regional and local identity in England look very different when you step outside of London.

Some in the room introduced themselves as not being from England, but from Yorkshire or Liverpool or some other named region or locality highlighting a sense that any notion of English identity needed to compass a sense of local identity as well. John Denham too made the case that English nationalism needed to draw on the tradition of pride in place and in localities before it looked to Westminster for structural answers to this.

Understanding the English question therefore requires an understanding of both the local and of class in how we form, maintain and express a sense of national identity and with similar events taking place in Newcastle, Manchester and Bristol it was interesting to note the different shape such discussions took when moved outside of London.  If any consensus was reached by the end of the day it could be summed up by Mike Kenny’s statement that we really are at “the nursery slopes” of discussions on Englishness and that such debates “need to be given time to breath”.

Posted by Louise Kempton, 6th November, 2013

It is interesting to note how the word ‘local’ has been quietly dropped from the title of the Witty review of ‘Universities and Growth’ which was released in October.  The original terms of reference published in April was entitled ‘Universities in their Local Communities: Enabling Economic Growth’ and talked about exploring “the range of ways that universities contribute to their local economies including as agents of research and innovation, as providers of skills, employers, purchasers of goods and services, and as facilitators bringing people together” and “how to create an integrated strategy between the local and national players”. 

However in the six months between the terms of reference being written and the publication of the final report there would appear to have been some influence brought to bear to remove any hint of a ‘place’ agenda in describing the (potential) role universities can play in driving growth.  In fact the final document has executed a superlative volte-face, and instead is now urging that funding should be structured “by technology/industry opportunity – not by postcode.”  It also tells us to “embrace the country’s density of population and institutions”, all of which will be music to the ears of those institutions that happen to be located in areas that are ‘thick’ with potential collaborators in both the public and private sectors.

Likewise there will be sighs of relief to be heard in research intensive universities located in parts of the country that are struggling economically, as any  fears of being forced, or even just expected to help build the capacity of their local economies in return for access to public funding has been once again been overlooked.  They now have carte blanche to work with the ‘best’ collaborators wherever they might be, as it is now all about benefitting UK plc. Unfortunately the ‘best’ tend to be concentrated in the parts of the country that are most economically vibrant, and herein lies the paradox.  Places with the greatest need for investment in innovation will often not have the existing industrial capacity required to assimilate and capitalise on new knowledge or applications stemming from research in their local universities. Thus universities located in these places of low absorptive capacity that do generate research with industrial applications are more likely to seek commercialisation opportunities further afield with suitable national or international firms.  So the ‘rich’ (places) get richer and the ‘poor’ (places) get poorer.

Witty also offers an extremely narrow definition of the role universities can play in contributing to economic growth.  The underlying assumption seems to be that the only (economic) value that can be derived from universities is in scientific and technological fields.  Bodies such as the European Commission and OECD take a very different line, and they have given increasing prominence to the importance of the research strengths of universities in  the arts, humanities and social sciences – for example contributions to the creative industries, business processes, service (including public service) design and policy and practice in the field of urban and regional development.

Furthermore, the OECD in its highly esteemed reviews of higher education and territorial development  in 47 regions across member countries emphasises not only the potential contribution universities can make to the economies of their cities and regions, but also the important roles they can play in social and cultural development. 

For its part the European Commission through its new approach to regional development known as ‘smart specialisation’ (which will be an underpinning concept of structural funding post 2013) explicitly acknowledges  the role of universities not only as generators of research and knowledge, but also in helping to build absorptive, leadership and collaborative capacity locally.  It states that “Smart specialisation ascribes a key role to universities as actors in their local innovation eco-systems, connecting global and local knowledge domains, and arguably gives them far more prominence than has been the case in previous structural funding programmes. There is a compelling case therefore for universities to play …. a much more broadly defined role than just generators of technological research and other ‘upstream’ activities.”

In contrast the Witty review presents us with a view of the world in which the contribution of universities to economic development is necessarily linear and in one direction – this is even reflected in the language used to present the report’s big idea of “arrow” projects.  This kind of terminology (and likewise ‘Catapults’) is in danger of presenting an oversimplified view of how economic development and innovation happens.  If we must rely on simplistic  terms such as ‘arrows’  maybe ‘boomerangs’ would be more appropriate?  At least they usually return to the place from where they were launched!

The idea that pouring money into university research will release a plethora of inventions that the private sector can just pick up and successfully commercialise is one that has been extensively critiqued in the academic literature.   The ‘valley of death’ syndrome is well evidenced by the number of patent family applications resulting from research heavily funded by the UK public purse.  A recent study  by the Intellectual Property Office shows the highest ranked UK applicant for portfolios of patents relating to graphene (Manchester University) is in joint 163rd place worldwide, in a ‘league table’ dominated by Korean and Chinese corporations and universities.

While it is certainly the case that UK universities are highly ranked and regarded worldwide for their quality research, the challenge of how to translate  this ‘excellence’ into innovation for the benefit of the national economy seems to beyond the grasp of policy makers.  There would appear to be resistance to any move that could be interpreted as ‘telling universities what to do’ in return for their public funding, based on the argument that this might curtail their ability to seek and attain global ‘excellence’.  But is academic excellence being pursued at the cost of the public good?

There needs to be more proactive support for the growing links between universities and their Local Enterprise Partnerships, particularly in terms of designing plans for the allocation and use of EU structural and investment funds and look at good practice examples.  Policy makers should be seeking guidance on how to actively promote and incentivise these kinds of local partnerships rather than continue to rely on mutual goodwill and trust between local leaders.  To support these endeavours the parts of government concerned with economic growth should revisit the recommendations of the Heseltine Review and devolve some of the centrally managed budgets targeted at promoting innovation if they want to  ensure all parts of the UK places can absorb and retain the potential benefits of universities in their areas.

[i] Higher education in regional and city development

[ii] Graphene – The worldwide patent landscape in 2013 (PDF, 4,413KB)

Posted by Andy Pike, 7th October, 2013

EU cohesion policy and catching-up regions

Against a backdrop of budgetary wrangling, difficult economic conditions  and the aspirations of the EU’s Europe 2020 strategy, reinforcing and sharpening the potential and effectiveness of regional policy in the EU has become a critical issue. While the tensions between people- or place-based approaches to policy endure vox article, fresh thinking about what the new framework means for the ‘less favoured’ or ‘lagging’ regions has begun to emerge.

Under the auspices of the first Polish presidency of the EU Council, CURDS contributed to a conference focused upon drawing out the key issues for policy learning in the renamed ‘catching-up’ regions. Building on existing research in this area, the main messages included: 

• Growth beyond the cores – Regions outside the main growth centres within their national economies were recognised as contributing significantly to national growth and development. Mobilising their potential through policy instruments was interpreted as critical rather than somehow compensating them for their lower than average economic performance.

• Recognising and mobilising potential in every region – While different, each region has assets and resources capable of development and the challenge is to identify, stimulate and find appropriate kinds of development for particular regions to enhance their contribution to aggregate growth. The new regional innovation strategies focused upon the ideas of ‘Smart Specialisation’ are attempting to achieve exactly this task.
• Integrated, sustainable and long-term development strategies – The experiences of catching-up regions across Europe emphasised the critical importance of designing, developing and pursuing development strategies that were co-ordinated, sustainable and focused on the long term.

• Anticipation and preparedness – Successful adaptation and evolution within regions was underpinned by the development of a strong regional research and knowledge base capable of monitoring, scanning and interpreting the relevance of macro-trends for example in demographics, organisations and technologies. Exploitation of emergent currents and ability to withstand and react positively to disruptive change – increasingly seen in terms of regional resilience SERC Discussion Paper No53 – were enhanced by well-connected and well informed regions.

• Common responsibilities for regional actors – Development strategies were seen as most effective in their design, development and implementation when their governance arrangements bound the relevant actors in the public, private and civic spheres into shared commitments, co-operation and mutually agreed goals.

• Focused, co-ordinated and complementary interventions – Regional experiences highlighted the importance of avoiding isolated, fragmented and disconnected measures which prove ineffective in delivering development outcomes and are capable of generating unforeseen negative effects. 

• Tailoring support mechanisms to regional contexts – Regions across the EU underlined the vital importance of customising interventions to address the particular context in which they sought to generate positive outcomes. 

• Balancing top-down and bottom-up approaches – Reconciling the complexities of the multi-level and multi-actor character of EU policy was acknowledged as a challenge for regions across Europe. While co-operation was seen as a pre-condition, getting the top-down and bottom-up aspects of development policy was seen as important to its effective integration and co-ordination. 

The full report is now available EU 2012 Cohesion Policy and Catching Up Regions – Lublin

Posted by Dr Peter O’Brien, 11th July 2013

Now the dust has settled following the Comprehensive Spending Review (CSR 2013) and the publication of Investing in Britain, where exactly are we with Local Growth policy in England? And where might it be heading next?

In its 2010 Local Growth White Paper, the Coalition Government’s approach to Local Growth was based on three principles: shifting power to local communities and businesses; increasing confidence to invest; and focused investment. Subsequently, the Government has, to a large degree, simply stopped doing certain things whilst centralising innovation, skills, science, and trade and investment, which were in the toolkits of the now defunct Regional Development Agencies (RDAs).

The abolition of RDAs and Regional Spatial Strategies formed part of a concerted move away from regional governance and a shift towards ‘functional economic areas’. Since 2010, the Government has promoted the creation of 39 Local Enterprise Partnerships (LEPs) – between Local Authorities and the Private Sector – launched the Regional Growth Fund and Growing Places Fund, agreed 8 City Deals, 24 Enterprise Zones and removed £7bn of ring-fenced Local Authority funding. However, when set against cuts to total local government expenditure, which amount to 43 per cent, Local Authorities are understandably struggling to help drive sustainable Local Growth.

In an attempt to boost the supply side, the Coalition Government has also introduced a series of changes to the planning system so that it “works proactively to support economic growth” by speeding up the planning process, particularly in relation to major infrastructure projects.

On infrastructure, the Government faced criticism for cutting public sector capital budgets in 2010 (e.g. in the Business and Local Government Departments). CSR 2013 represented a belated attempt to ‘(re)invest for growth’, although planned capital spending in 2014/15 will be £10bn less than that earmarked by the previous Labour Government.

CSR 2013 also provided the latest chapter in the Government’s narrative on how LEPs will promote Local Growth in practice.

There are 39 LEPs in England, and although each is different, there are similarities between certain LEPs, which will shape their success or failure. In particular, some LEPs to date have had minimal resources and capacity at their disposal to boost Local Growth. Findings from a recent survey of all 39 LEPs, conducted by CURDS and University College London, suggest that two challenges confront LEPs. First, the growing expectations that face LEPs may crowd-out and distort their organic growth as private sector-led, locally-owned/valued and sustainable institutions. Second, the variability of and competitiveness between LEPs, stoked in part by Government, could be their ‘Achilles heel’, as the whole LEP family – judged by the failure of some LEPs to deliver Local Growth within a flat-lining national economy – either becomes discredited and or the collective moves at the pace of the slowest.

CSR 2013 saw the announcement of the new Single Local Growth Fund (SLGF). In his report, No Stone Unturned, Lord Heseltine called for a “major rebalancing of responsibilities for economic development between Central and Local Government”, and proposed a Growth Fund of £12bn per annum over four years. George Osborne’s creation of a £2bn annual ‘Single Pot’ (equivalent to total RDA Budgets in 2009/10 or 4 per cent of the HS2 Budget) has left many disappointed.

The SLGF is clearly not a panacea, but it could make some difference, and its impact will multiply when aligned with EU Structural Funding, other funds and if it levers in additional private investment. The sense of frustration with the SLGF lies in the fact that the reality has failed to match the Government’s rhetoric on devolution/decentralisation. CSR 2013 provides more evidence of local areas having to ‘earn autonomy’ and to gain the trust of Whitehall.

There is also unease at the ‘hoops’ local actors have had to jump through to ‘demonstrate’ their ability to manage Government resources, as well as the cumbersome competitive bidding framework the Government will use to allocate £2bn to 39 LEPs. LEPs will get on with preparing their Local Growth Strategies, EU Structural and Investment Fund Strategies and bids to SLGF. However, the gap between Heseltine’s vision and CSR 2013 could halt the momentum in certain local areas.

With LEPs, City Deals, Combined Authorities, City Regions, Core Cities, Key Cities, Enterprise Zones, etc all part of the growing lexicon of Local Growth the landscape risks becoming cluttered.

There is likely to be rationalisation amongst some LEPs, and a streamlining of the relationships between different players. Reaching consensus amongst the main political parties would help to cement a more permanent place (post 2015) for LEPs and other sub-regional arrangements. The initial signs are positive. A period of relative stability, genuine devolution and a mature relationship between Central Government and localities would go some way to improving the next phase of the Local Growth agenda as we begin to emerge out of austerity.

Dr. Peter O’Brien is a Visiting Fellow at the Centre for Urban and Regional Development Studies (CURDS), Newcastle University. He was formerly the Director of Tyne and Wear City Region and Head of the North East LEP Interim Secretariat.

Posted by Mike Coombes and David Bradley, 4th July 2013

Government statisticians measuring “national well-being” recognise the importance of having a stronger sense of belonging to one’s local area: they have also found (as earlier work had) that the younger you are, the weaker your sense of belonging. [http://www.ons.gov.uk/ons/dcp171766_302966.pdf] Where does this leave children who, after all, are the most tied to their local areas?

The basic answer is that little is known about children’s sense of place. This is despite the Children’s Society finding that an important part of measuring children’s well-being is asking how much they like their local area.

[http://www.childrenssociety.org.uk/sites/default/files/tcs/research_docs/Developing%20an%20Index%20of%20Children%27s%20Subjective%20Well-being%20in%20England.pdf]

Research in CURDS has begun to reveal some of the factors which may make a difference to children’s sense of place.

The first study of children’s sense of place and their local environment contrasted the views of teenagers with those of adults as part of CURDS research for English Heritage which they summarised in the 2009 Heritage Counts Report. [http://hc.english-heritage.org.uk/Previous-Reports/HC-Sense-of-Place] A key innovation was designing a lesson plan for teachers that included a questionnaire on attitudes to the local area and its built environment. A later study included the further innovation of supplying GPS-enabled cameras and getting children aged 13-15 to photograph the buildings or places that are important to them. [http://www.english-heritage.org.uk/publications/historic-buildings-young-people] These studies have confirmed that the local built environment, and a teenager’s attitude to it, influences the strength of their sense of place.

Two key questions arose from this research: are these issues relevant to younger children too, and are there ways to make the research easily implemented across the country? If so then it may become possible to begin answering questions about children’s well-being nationally and the role of location in shaping this.

The latest relevant CURDS study was a pilot study for the Catherine Cookson Foundation worked with 2 primary schools in Newcastle to show that, with help, children as young as 5 could not only complete a simplified version of the questionnaire but also take photographs of buildings and places important to how they felt about their area. [can supply report link]  Now a new study[1] with a different Tyneside school is trialling a web-friendly version of the questionnaire with 50 8-9 year olds.

The key point of this research is to go beyond finding out what children think now by also actively engaging their interest in the local environment and so increase their pride in their local area and its assets. The aim is to create a web-based teaching framework and suggestions for activities that will successfully engage young people, actively increasing their appreciation and understanding of their local environment. In so doing it could take forward other initiatives – such as that developed in Manchester [http://www.manchester.gov.uk/download/downloads/id/1012/manchester_a_sense_of_place] – that seek to strengthen sense of place to help improve the well-being of communities.