Building the foundations

From late 2012 to early 2015, the Coalition Government released a series of Industrial Strategies covering 11 sectors. Whilst they contained some important analysis and some sensible proposals, they felt decidedly low-key – as though the Government at the time were still a little afraid of the stigma of being seen to ‘pick winners’. They were also very much national strategies. Places were mainly acknowledged insofar as they were the site for existing assets or future investments.

The publication of the Industrial Strategy yesterday was very different. The message was that Government - and local governments and LEPs – have a key role to play in supporting the development and growth of new industries and addressing the challenges the UK faces in the 21st Century. In concentrating on five ‘foundations’, the Industrial Strategy has articulated the key elements needed to drive economic growth and has set out to address each of these.

Yesterday’s Budget comes at a challenging time for the Government, local government, LEPs and the UK economy. The Office for Budget Responsibility (OBR) has reduced its forecast of GDP growth for 2017 by 0.5%, with growth expected to weaken further through to 2020. In large part this reflects poor growth in productivity since the recession. And, of course, all of this is before we factor in the possible impacts of Brexit.

Their football teams may both have been managed by the legendary Brian Clough, but until recently the idea that Derby and Nottingham had much in common would have been anathema to many of their citizens.

But a detailed study prepared for Derby and Nottingham’s City Councils hails progress by the two cities to develop joint services and recommends extending this into a combined industrial strategy that will enable them to operate as a ‘metro’ unit economically.

By Mike Emmerich

What’s good for London is good for the UK, right? Well yes, but that’s not the whole story.

Advocates for further devolution and public investment for London can point to myriad statistics which show how reliant the rest of the country has become on the capital. The latest ONS figures show that London produced a £26.6bn fiscal surplus (just over £3,000 per head) which is redistributed to fund public services in struggling regions. And if by ‘struggling’ we mean anywhere receiving more in public spending than it raises in tax, we can include every single region outside London and the wider South East.

And with London’s GVA running at about 170% of the UK average, it’s easy to make the argument that investment in London delivers a bigger bang for the buck.

By Mike Emmerich, Director

To paraphrase a certain politician, is no deal better than a bad deal?

That’s the question many in South Yorkshire will be scratching their heads over following the apparent demise of the Sheffield City Region’s push for devolution. For many, the decision by Barnsley and Doncaster to walk away represents a huge lost opportunity. But some may be feeling a certain sense of relief, coupled with a ‘told-you-so’ satisfaction.

I’m writing this having been drawn into a debate with academics Martin Jones and David Etherington concerning a recent blog post based on their report, Devolution and Disadvantage in the Sheffield City Region. The original paper is good and makes many valid points. But my concern was, and is, that in some circumstances analysis of a kind found in the subsequent blog can overcomplicate matters and play into the politics of the issue in a way I fear we might live to regret if followed to its logical conclusion.

By Mike Emmerich, Director

Britain loves nothing more than to build up people and institutions in public life and then to participate in the spectacle of their destruction.

Not even three months since the election of a crop of new metro mayors for Combined Authorities across England, we’re already seeing the process start. The National Audit Office (NAO) report in early July said little more than that it is early days for Combined Authorities and much remains to be done to make a success of them. Yet some of the reporting of their findings seemed gleefully to anticipate their failure.

By Patrick White, Director

This week’s Queen’s Speech was notable for its absences. Many of the least popular election pledges – widely blamed for the Conservatives’ disaster at the polls – were summarily junked.

Denounced by Labour as “threadbare”, Theresa May’s programme for the next two years certainly seemed to come from a government with few new policy clothes. Coming the same week as the start of the fractious Brexit negotiations, it’s becoming clear that serious structural reform for local government will now be put firmly on the backburner. Any legislation that might attract even a murmur from backbench dissenters is unlikely to be contemplated.

Civil Servants, just like nearly everyone else in the country, was expecting a Conservative government to be returned to power following last week’s General Election.  Few, if any, were expecting a change in Prime Minister.  Some may have been pondering the pros and cons of a reshuffle, but staff in most Departments were working on the basis that most, if not all, their Ministerial team would remain unchanged.

By Ben Walters

This was the last spring budget (by current plans), and it was fairly muted in tone. That was expected: with all the uncertainty surrounding the UK economy, the Chancellor had no desire to add even more moving parts. But despite the lack of major announcements, there was something of interest for cities and LEPs.

We have also seen one of the fastest and most significant u-turns of a recent Budget. The reversal on self-employment NIC taxation after one week has been damaging to the Chancellor’s standing and will undermine the ability to reform self-employment and terms & conditions in the medium term. It creates a shortfall of £2 billion which will force the government to have to find these savings elsewhere. For Philip Hammond’s first budget as Chancellor this could have an effect in changing the balance of power in the Cabinet, and risks making the Government look weak and vulnerable to back bench pressure for policy change.

BY Mike Emmerich

The much awaited Industrial Strategy Green Paper has arrived. The Metro Dynamics team have run the rule over it, looking at what’s in it and what it means. Two cheers rather than three is our view. It’s a start and not a bad one at all, but it’s what happens next that matters most.  And that needs local places as much as central government to be bold with their ideas and proposals.

It’s hard to argue that the Green Paper is, in essence, wrong. But it’s equally hard to argue that the Government or indeed places have yet to rise as fully as we need to the challenges facing post-Brexit Britain.  On the one hand this is fair enough, those implications are not yet clear.  But the nation is hungry for a new approach to business and growth. The Government has fed us a little, and yet as we digest the voluminous Green Paper sandwich it has offered, we’re left wondering: where’s the meat? The Green Paper is very necessary indeed. But is it sufficient?

By Ben Walters

On the 23rd January, the government released a green paper on its new Industrial Strategy, as a public consultation. This is the first major strategy since the new government, and further clarifies the changing economic approach that will be taken over the coming years. It continues an increase in interventionist policies (such as the 2016 Autumn Statement), as well as a focus on regional inequality and productivity. While the main influences of these policies (Theresa May, Greg Clark and Phillip Hammond for the Autumn Statement) of the strategy were not ‘Leavers’, they are all seen as governments response to the referendum, and how to adapt the economy to best meet the challenges and opportunities this presents. 

By Ben Walters

On Tuesday, Philip Hammond delivered his first Autumn Statement as Chancellor, and gave the Treasury a chance to react to both Brexit and new fiscal forecasts. Below, we have discussed some of the changes which may impact on cities.

‘showing the Treasury’s reaction to both Brexit …’

By Ben Lucas

At the Core Cities Summit last week, city leaders were understandably frustrated by the suggestion that inclusive growth is on the agenda because of the EU referendum.They didn’t need Brexit to tell them that the economy is not delivering for their residents. But, as chief market strategist for Britain and Europe at JP Morgan Asset Management, Stephanie Flanders, said to those leaders, Brexit has created a unique opportunity to change our economic model

Prime minister Theresa May has said her number one priority is to develop an ‘economy that works for everyone’. In her speech on becoming prime minister she asked to be judged on the extent to which she succeeds in this.