A Derby-Nottingham metro area would boost growth

By Ben Lucas

This article originally appeared in the Local Government Chronicle

In the last couple of weeks both the president of the Confederation of British Industry and the Industrial Strategy Commission have noted that the East Midlands is one of the most significant areas of the country not to have its own clear voice on industrial strategy.

The success of the Midlands Engine and the imminence of the white paper on industrial strategy brings this into even starker focus.

It’s a large region that comprises several overlapping types of economy including urban/metro, former coalfields, market towns and rural areas. Each of these has distinctive as well as interconnected challenges and opportunities. They are represented by every tier of local government, from districts, through cities to counties.

Recently Metro Dynamics has had the opportunity to look at one aspect of this: the metro economy of Derby and Nottingham. Readers of the LGC will have read Jon Collins (Lab), leader of Nottingham City Council, talking about working with his counterparts in Derby City Council to build a “coalition of the willing” around metro strategy. The two councils have started by developing some reciprocal citizen services, where local people who live in one city but work in the other can use their library and leisure cards in both cities.

Building on this, we were asked to scope the economic opportunity that metro collaboration could present, the fruits of which can be read here. As someone who grew up in Beeston on the outskirts of Nottingham, and still an avid Forest fan, this has been a fascinating piece of work from a personal perspective.

Of course, I’m well aware of the rivalry between my home city and its near neighbour. But it’s also impossible to get away from their interdependence, which becomes more apparent the closer you look. An old friend of mine summed it up as we walked away from a Forest game once: “Everyone in Nottingham hates Derby. Mind you, half my mates work there!”

Derby’s strengths in advanced manufacturing are complemented by Nottingham’s specialisms in finance, business services and emerging digital and bioscience sectors. So much so that 40,000 people commute between the two cities daily, while over 80% of the residents of the wider metro area, covering neighbouring districts of Nottinghamshire and Derbyshire such as Broxtowe and Erewash, with a population of 1.4 million, also work there. The data confirms that these areas already function as a metro area economically.

Our conclusion is that if the area started to collaborate more like a metro then the scale of the economic prize would be significant. For instance, we believe it’s realistic for the metro area to raise its productivity to match the English average by 2030, providing an additional £11bn of gross value-added.

But to get there, some serious challenges need to be confronted. Local leaders are only too aware that there are pockets of severe deprivation in both cities, low school attainment and skills levels and a high proportion of low-wage jobs. In short, there’s a need for truly inclusive growth that spreads opportunity and prosperity. That’s hampered, in part, by the fact that currently the areas covered by the metro receive £800 less in public funding per head than Greater Manchester, a problem of underfunding that characterises the East Midlands as a whole.

Moreover, the big opportunities we identify lie in sectoral and locational intersections between Derby and Nottingham, for example bringing together advanced manufacturing specialisms with digital skills and capability, and realising the full potential of HS2 at Toton, midway between the two cities. Seizing these will require collaboration between all of the partners that have a stake in these developments.

The challenge in the complicated local government geography of the area is to create new shared economic priorities and the structures that can drive these. This cannot be about the creation of a super-council, or the domination of one place by another, and its focus should be economic, not on local services. It will have to be a voluntary process and all tiers of local government will need to be in the mix.

That’s why we have suggested a partnership approach to driving the metro industrial strategy in the shape of a metro growth board. Bringing together local politicians, businesses and anchor institutions such as universities, with an independent chair, this would be a modern equivalent of the 19th century municipal corporations that drove the growth of our great Victorian towns and cities. It could provide an effective voice for the area, as well as being tasked with developing joint approaches to inclusive growth, skills, and infrastructure investment.

Our local government structure is one of the oldest and most varied in the world. Getting industrial strategy and governance right for each place requires creativity, compromise and collaboration. We believe that operating as an economic metro area is the right way forward for the Derby-Nottingham area. To paraphrase the late local hero Brian Clough, we are not saying it’s the best idea for driving growth across the area, but it’s in the top one.