Whatever happened to economic development?

Budget day for the Centre for Local Economic Strategies (CLES) used to be one of intrigue and relative excitement. In the 2000s, the Budget was supplemented by a specific annex focused on economic development and regeneration. Indeed, the Budget was where we saw exciting new renewal initiatives announced; reviews of sub-national economic development formulated; and new duties and funding initiated.

For CLES, the Budget has lost its dynamism, has become rooted in fiscal conservatism, and has become just another vehicle through which Government flexes its austerity measures and supports anything which will enable economic growth. Any mention or focus on economic development including in its broadest sense local economic, social, cultural and environmental aspects has gone and the Budget of 2017 is no different.

The only real linkages to economic development are:

  • A broad assertion that a further 650,000 people are expected to be in employment by 2021;
  • Some resource for the businesses hardest hit by business rate increases;
  • Investment in higher education research and development;
  • Investment in congestion easing on roads in the North and Midlands;
  • Minimal funding for the devolved nations for infrastructure;
  • Funding for women returning to work after a career break.

All this begs the question of what happened to the function of economic development, particularly in local government? Over last 7 years, the function of economic development has declined in all local authorities whereby there are often only a couple of officers remaining and in many cases no function at all. This has been affected by cuts and the advent of Local Enterprise Partnerships and other special and sub-regional vehicles.

CLES would argue that there is a need to reinvigorate the function of economic development at the local level. It is and should be integral to debates around: devolution, economic growth, public service reform, addressing unemployment and poverty, planning, infrastructure development and much more. So what should the function of economic development look like locally?

Economic development would:

  • look to draw together and harness the potential of anchor institutions in place;
  • look to ensure that investment coming into a locality brought maximum benefit in economic, social and environmental terms;
  • evidence existing economic development challenges and coordinate solutions;
  • enable and facilitate the delivery of employment and skills programmes in coordination with others;
  • draw together other departments to ensure intervention not only delivers growth but also addresses social issues and poverty;
  • measure and evaluate the impact of economic intervention;
  • broker relationships across the business and social sectors;
  • And ultimately it would ensure that growth happens in a way that benefits not only the economy but also people and place.

Contemporary policy and the funding environment does not really enable any of the above, but we would argue it is up to local authorities to pick up the economic development mantle again and take on the role of economic and social stewards or curators of place. There is so much stuff going on around progressive economic development which the Budget misses out on – this includes CLES’ work with the New Economics Foundation on Creating Good City Economies in the UK and the recently launched report of the RSA Inclusive Growth Commission. The Budget is not commensurate with the findings of these pieces of work, nor with the challenges facing our places.

Matthew Jackson is Deputy Chief Executive of the Centre for Local Economic Strategies (CLES)