Devolve Industrial Strategy powers and funding, councils say

Hopes to rebalance the economy through the government’s Industrial Strategy risk failing without an urgent move to devolve funding and responsibility to local areas to enable councils and business to work together to boost housebuilding, creating jobs, close the growing skills gap, and improve transport and broadband.

Ahead of the autumn Budget, the Local Government Association (LGA) said the government needs to recognise that councils are crucial to economic growth but are being hindered by centralisation and scores of different nationally controlled funding pots.

The LGA says that more than £23 billion spent on growth, regeneration and skills is spread across 70 different national funding streams and managed by 22 government departments and agencies.

This, the LGA says, is confusing, wastes public money and creates unnecessary delays in getting projects off the ground. Additionally, it holds back the local and national economy, and impacts on people’s opportunities for prosperity.

The LGA says the autumn Budget is an ideal opportunity to devolve powers to councils who are best placed to understand the needs of their local economies.

It is also urging government the reform the inefficiency of separate funding pots for local growth and instead devolve money to local areas through a single, streamlined investment fund.

The LGA says devolution of growth funding must be used to deliver the Government’s Industrial Strategy as it will benefit local economies in several key areas, including: resulting in 8,500 people off out of work benefits and 6,000 people attaining better skills; introducing a simplified, ambitious and longer term approach to funding for local transport; and creating a fast and reliable digital connectivity.

Mark Hawthorne, chairman of LGA’s people and places board, said: “The UK is one of the most centralised economies in the western world, and as a result, has poor levels of productivity.

“Councils are best placed to understand the needs of local economies, but are currently having to spend too much time trying to access growth funding for essential projects to improve their local areas. This is frustrating the efforts of councils to build homes, create jobs and invest in infrastructure, such as transport, to boost our economy.

“Despite improvements, the current system for growth and regeneration funding is still unnecessarily bureaucratic and hindering progress in our towns and cities, as well as creating uncertainty for businesses and investors. Simpler, fewer funding streams would help kick-start more projects more quickly.

“It is clear top down approaches don’t work. Giving local government more freedoms would improve productivity and also help to boost place-based inclusive growth. We need to upskill young people and adults now to make them relevant for the jobs of today and tomorrow. We have a plan in place and are ready and willing to help the Government deliver a skills system that makes sense for local people and places.

“The autumn Budget provides an ideal opportunity for the Government to formalise the role of local government in delivering the Industrial Strategy. By placing local leadership at the heart of investment decisions to bolster inclusive economic growth, councils can help create sustainable, cohesive and successful communities in all parts of the country.

“The Industrial Strategy should use this place-based approach to drive up skills levels and productivity across the country to ensure that all parts of the country are able to create the conditions for inclusive growth.”