EY Blog: How council policymakers can develop a growth-focused narrative for their localities
CCN Blogs | 16 March 2023
EY Point of View: Regional Economic Forecast
According to our latest Regional Economic Forecast (REF) report, cost-of-living pressures and weaker consumer spending are expected to deepen the economic divide between London and the rest of the UK.
London is forecast to experience a far smaller contraction in GVA than all other regions and nations in 2023 and outperforms everywhere else on an annualised growth metric through to 2026. This return to familiar trends risks is at odds with commitments to correct economic imbalances, so what are the prospective opportunities to turbocharge county growth prospects?
My reflections centre on four principle activities for council policy makers:
- Seek to aggressively promote productivity interventions: the report notes how, particularly in the foundational economy and in response to tightness in labour markets, council policy makers must unlock gains through productivity. Example interventions such as the provision of preferential or guaranteed finance for business, targeted workforce incentives from promoting digital through to employee wellbeing advice, and strategic plans to accelerate sector productivity should be prioritised.
- Create a private sector investment imperative: The capacity of the public sector as financier in driving growth is uncertain, influenced by the additional national funding burden accumulated in recent years. council leaders will recognise this shifts the onus toward unlocking private investment and innovation through creative policy design, attractive incentives garnered through devolution, augmented by efficient application of smaller catalytic funding. Examples exist where targeted public funds have been multiplied by private sector commitments, such as Freeports, the UK Shared Prosperity fund and the Stronger Towns Fund. However, a delivery focus must be adopted to capitalise on these commitments and sustain momentum. Additionally, policy makers in the South-East should also evaluate how further spill-over and regional benefits can be leveraged from the accelerated growth in London.
- Utilising market intelligence and data to deepen sectoral understanding: Even at the county level, policymakers should begin with a longitudinal analysis of megatrends, ensuring they fully understand the opportunities that AI, net zero and automation could present at a local level to business and employment. These ramifications must then be mapped to existing capacity and capability bases, with the findings integrated into high value add sector plans. For example, truly integrating the Net Zero Strategy into planning for coastal communities or manufacturing value chain, and designing local interventions to upskill workers in new energy capabilities that can benefit multiple elements of an economy.
- Matching local strategic plans with devolution powers to unlock growth: armed with the knowledge of their counties’ capabilities and competitive advantages, local policymakers should understand how constraints on growth can be liberated through devolution. Deepening powers, finance, and accountability in domains such as skills and employment support, land availability and R&D will facilitate the transition toward a cleaner, greener and more prosperous future for the regions.
Forecasts are not set in stone but provide insight on where councils’ planning, efforts, and investment should be targeted to reshape the future.
County-level interventions throughout recent, unpredictable times have been fundamental in securing jobs and regional prospects, and reliance will once again will be placed on CCN members to develop a growth-focused economic narrative that shifts the outcome dial for your localities.
Local Public Services Economics Lead, EY UK