Councils should be granted legal authority for managing economic growth and development
England is on the brink of a significant shift in local governance, as the English Devolution and Community Empowerment Bill advances through Parliament. This legislation aims to grant statutory powers over economic development to councils and Mayoral Strategic Authorities, transforming the way England's regions grow and develop.
The Bill sets out detailed powers and responsibilities for new Mayoral Strategic Authorities, including control over economic development, regeneration, housing, strategic planning, transport, local infrastructure, skills, and employment support. Established authorities like the Greater Manchester Combined Authority have already benefited from these powers, and the Bill aims to extend this model across more regions to enable local decision-making.
A tiered structure of strategic authorities—foundation, mayoral, and established mayoral authorities—is also introduced, with varying degrees of powers and funding. This structure is intended to speed up devolution and reduce bureaucracy. In cases where local leaders cannot agree, the Bill includes mechanisms to enforce the creation or extension of these authorities, ensuring statutory powers for economic development are implemented where feasible.
The benefits for local areas and the economy are promising. More locally controlled funding and decision-making would shift choices from central government in London to councils and Mayoral Authorities better attuned to regional needs. The ability to develop and implement comprehensive 10-year Local Growth Plans would focus on boosting regional productivity, targeting growth-driving sectors, and aligning local initiatives with national industrial and skills strategies.
Streamlined capital funding would merge pots like the Levelling Up Fund and Town Deals, reducing bureaucratic hurdles and enabling faster and more efficient investment in local projects. Enhanced strategic planning across boundaries would support larger-scale housing and infrastructure development essential for economic growth. The potential unlocking of significant untapped local economic potential—estimated at £276bn nationally—could be achieved through focused government support and devolved levers applied locally.
The Institute of Economic Development (IED), led by Executive Director Nigel Wilcock, has launched a manifesto calling for councils to be given statutory powers over economic development to stimulate growth and address financial inequalities. The IED believes that only through this approach can national policies be consistently implemented at a local level, and economic development make a difference to residents at the local level.
However, the financial health of many local authorities is a concern. In the past 12 months, four councils have declared themselves in effect bankrupt, while more have signalled drastic spending cuts to avoid potential insolvency. The Levelling Up, Housing and Communities Committee has recommended injecting £4 billion into English town hall budgets to prevent a financial crisis.
The IED calls on all parties to recognize the critically important role that economic development practitioners have in delivering levelling up and place-based economic transformation. As the Bill progresses through Parliament, it is crucial that the unique understanding of local economies that councils possess is harnessed to better ensure policies are adapted to local conditions and make the most of the strengths of local places.
The IED also supports the Blueprint Coalition's Manifesto for Local Climate Action and its place-based approach to tackle climate change and move towards net zero. A statutory economic development function would be involved in assessing local skills, providing skills intelligence for local skills providers, employers, and the workforce. This approach would enable the creation of clear pathways into work and make it simpler and more attractive for UK and international firms to invest in local areas.
In conclusion, the English Devolution and Community Empowerment Bill represents a significant step towards empowering local governance, fostering tailored economic growth strategies, reducing administrative complexity, and ultimately driving improved economic outcomes for regions across England. The IED's manifesto and advocacy efforts underscore the need for statutory powers over economic development to be underpinned by an experienced and stable workforce, ensuring the successful implementation of this strategic decentralization.
- The English Devolution and Community Empowerment Bill, with its focus on granting statutory powers over economic development to councils and Mayoral Strategic Authorities, aligns with the Institute of Economic Development's manifesto, which advocates for a similar approach to stimulate local growth and address financial inequalities.
- As part of the Bill's proposed powers, Mayoral Strategic Authorities will manage economic development, regeneration, housing, strategic planning, transport, local infrastructure, skills, and employment support, which could potentially unlock £276bn of untapped local economic potential across England.
- To ensure the successful implementation of the decentralized powers outlined in the Bill, the IED emphasizes the importance of a stable and experienced workforce, with a focus on enhancing the unique understanding of local economies that councils possess.
