Grant Thornton Blog – What role should Counties play in implementing the industrial strategy?

For some time now, Grant Thornton has been engaged in a dialogue with communities and business, local authority and third sector leaders from across the country, to share aspirations, ideas and insight focused on building a vibrant economy for the UK. The emergence of the government’s Industrial Strategy – green paper earlier this year and white paper expected imminently – has been central to these discussions.

Our sense is that local leaders cautiously welcome the prospect of a more interventionist approach in local economies, but rather than debating the more esoteric points such as how many “pillars” there should be, they are far more interested in finding new practical opportunities to drive better place-based outcomes such as improving skills, raising productivity and attracting investment. The same key questions keep coming up:

• How do we balance multiple place-based agendas to make the link between the industrial strategy, and local prosperity within places – i.e. better quality of life and improved outcomes for people and communities?
• What is the role of local leaders and institutions in generating and successfully delivering the opportunities from the industrial strategy?

Each of these questions merits a blog in its own right, but in summary, it is clear that place matters to the industrial strategy, and the industrial strategy matters to place. No two localities has the same blend of strengths, assets and challenges. Place-based responses to the industrial strategy should therefore reflect the rich diversity of local government and the places it serves, and local leaders must propagate confidence and stories of success.

Counties matter to our economy. As CCN recognises, county areas contain 44% of the total jobs in England and produce 41% of the GVA. They are often homes to long-standing communities and SMEs which form our economic heartland. We feel strongly that County areas have an equally important role to play in shaping the industrial strategy as City regions. For central government to prioritise investment in city regions alone would be a missed opportunity.

However, for shire areas the place-based leadership challenge is a bit different in three key ways.

Firstly, it can be harder to instil confidence in the private sector. Developers, local businesses and prospective investors want to look local leaders in the eye and be reassured that their investment will be supported. In particular, they need to know that a skilled workforce can comfortably live nearby and easily travel to work. We have heard concerns from the private sector around navigating complex webs of relationships in two-tier areas in order to get this assurance, and sometimes friction across tiers has been all too obvious. County leaders need to collaborate with their peers in districts and other sectors to present a unified front and offer to investors.

Secondly, devolution may be less of an incentive for two-tier areas to get their ducks in a row. There are hints of revived discussions in areas such as the South West, but DCLG has called these “a different type of discussion” and it seems clear that that the deals on offer will be less compelling than those provided to the metropolitan combined authorities. If shire devolution is back on the cards, it is all the more important to use formal and informal vehicles for collaboration to make a strong, unified pitch to government. In particular, it will be very difficult to resolve critical issues around skills without additional freedoms and flexibilities in this area.

Finally, the levers for growth in County areas are in different hands, with approaches to spatial planning and housing delivery often fragmented and disconnected from transport and infrastructure plans. Again, collaboration and mature approaches to place-based leadership are key. New governance structures are not necessarily the answer, but in some places they might be the next step. We are playing an active role in some of the governance debates playing out across the country and would continue to stress that consensus and commonality of purpose are key.

If, as the Government promises, the Industrial Strategy is to build on our strengths, extend excellence into the future; close the gap between the UK’s most productive companies, industries, places and people and the rest; and make the UK one of the most competitive places in the world to start or grow a business, Counties must be at the heart of it.

Martin Ellender, Director, Local Government Advisory, Grant Thornton