Business leaders call for new approach to devolution

Business leaders have called for a new approach to devolution across England with local enterprise partnerships (Leps) taking a lead role.

A report published by the manufacturer’s organisation EEF says Leps should be given the responsibility of bringing councils and businesses together to decide what kind of devolution deal is best ‘for their area’.

According to the report, almost two thirds of manufacturers believe local authorities are not working together enough to boost economic growth, while 38% think Leps have an ‘important role to play’ in bringing businesses and decision makers together.

It also claims the government’s rhetoric on devolution has not been matched by action, with the new administration yet to sign a new deal.

‘This is for a mixture of reasons, including the plethora of local authorities in England and lack of clarity from government on devolution policy priorities,’ the report states.

In addition, it notes central government plans to allow councils to keep more income money from business rates have also been ‘abandoned’.

‘The lack of action on fiscal devolution also undermines the principle that local areas should get payback for their actions, weakening the incentive for locally-driven investment,’ the report adds.

In order to get the devolution process back on track, the report recommends the government develop a framework, which would outline ‘what is on the table’ for local areas and what would be ‘needed to unlock the different levels of powers devolved’.

The EEF report also argues the government should also appoint a ‘lead actor’ to responsibility for getting each devolution deal ‘over the line’ and that Leps are ‘uniquely placed to do this’.

‘Since 2010, they have been crucial in acting as a clearing house, bringing together local authorities and businesses across functional economic geographies to focus strategically on growth, including developing strategic economic plans.’

It adds 62% of manufacturers want devolution to focus on improvements to local roads, while 51% want them to focus on public transport.

Although surprisingly, given numerous calls from business groups to improve skills and training, 68% of manufacturers say the allocation of further education funding should not be devolved now.

‘Devolution deals are a good framework and the government should double down and finish the job in getting deals rolled out to all areas,’ said the EEF’s head of business environment policy, Chris Richards.

‘Given local government in England is significantly fragmented, they should also put Leps in charge as the trusted local agent to get devolution deals over the line in areas that don’t yet have them.’

The head of research at think tank Localis, Jack Airey, said the ‘tortuously slow pace of devolutionary process’ in the UK has been a barrier to economic growth.

‘There is now little reason and less capacity or attention in Whitehall for agreeing bespoke devolution deals, as the terms of Brexit are negotiated,’ said Mr Airey.

‘So it makes sense to shift to this threshold approach across strategic authority areas – whether local enterprise partnership or combined authority area footprints – otherwise devolution risks stalling over the course of the current Parliament.

‘In order to compete globally, these strategic authorities deserve to secure an “industrial compact” from ministers, allowing them to take full ownership of a full suite of economic and fiscal powers,’ he added.

The County Councils’ Network (CCN) spokesman for devolution, Martin Hill, said it ‘believes county authorities are best placed to act as strategic authorities to lead devolution deals and take on devolved powers, offering the size necessary to do business with government mixed with local expertise, working in strong partnership with LEPs and other local bodies’.

  • Read the full report here


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