The Institute of Economic Development (IED) is stepping up its work for councils to be given statutory powers over economic development. Here, IED Chair Tom Stannard outlines their new manifesto for change
With the recent party conferences, it is easy to become distracted by headlines and distant policy pledges which may impact economic development and the organisations, teams and individuals tasked with implementation.
Unsurprisingly, the Government and opposition parties have made growing the economy a key focus for the 2024 general election. Economic growth is, as it should be, the number one priority for this country. Without growth, the brakes are applied to community wellbeing, local wealth building suffers, educational attainment stagnates, and health outcomes worsen – and we are not currently well placed as a nation on this.
As one of the worst-performing economies in the world during 2023, with inflation at its highest for four decades, serious questions are being asked about current approaches to growth and addressing inequalities.
Economic growth policy
The nationally-led approach to stimulating growth has been under-delivered for decades, and the National Audit Office recently found that since 1975, successive governments have introduced more than 55 separate policies targeting economic growth in England, with £18 billion being spent between 2011 and 2020 alone. Put simply, this is not working, and it is time to enable effective action to drive economic growth that is locally led.
Local authorities and economic development
With the Government confirming its intention to transfer LEPs to local government from April 2023, the pivotal economic role of councils in realising the country’s growth ambitions, as brokers and leaders of broad-based local economic development partnerships, must now be more powerfully articulated.
The Institute of Economic Development (IED) is, and always has been, a professional body focused on developing workable solutions to the issues and challenges we face. This is why, in 2023, we launched a joint call with Solace for councils to be given statutory powers over economic development so they can more effectively help create high-quality jobs, attract investment into local areas, and boost UK plc.
Giving local authorities a legal duty over economic development would create a clear accountability structure, which, in turn, would make it simpler and more attractive to UK and international firms and financial institutions to invest in places. It would also enable the development of local strategic economic development plans that respond to the views of local businesses and the wider community.
So, building on this call, we have launched our own manifesto for change, Grow Local, Grow National: Why we should give councils statutory powers over economic development, which presents a radical agenda for change in the run-up to the 2024 general election.
The importance of economic development
Economic development’s role in understanding the drivers of growth and the needs of communities is clear. Still, the detailed work required to create positive change requires local leadership, patience, and imaginative local partnership work.
Without recognition as a statutory function, the importance of economic development remains neglected, under-prioritised, and under-resourced. Strong local economic development accountability also ensures government priorities in areas such as levelling up are delivered more effectively locally.
The IED believes it is only through this approach that national policies can be consistently implemented at a local level – and that economic development can make a difference to residents of local areas. We welcome the additional scrutiny and accountability this would bring. With our call for statutory power over economic development, we make a series of recommendations and policy asks, sitting within six pillars which are critical for success: Devolution; Funding and Pipeline Stability; Net Zero; Business Development, Trade and Inward Investment; Labour Market and Skills Activation; and Workforce and CPD.
Six pillars and six vast areas of work and opportunity for the IED – and, we hope, for the next Government. As part of that clarion call, we are here to put the economic development profession – the mechanism that will drive the growth of UK plc – back at the beating heart of Government priorities over the next decade.
In short, under our Grow Local, Grow National manifesto, councils and their local partners could deliver so much more if they are given statutory powers, backed by a unique understanding of local economies, to ensure better policies are adapted to local conditions and make the most of the strengths of local places.
We, therefore, welcome and encourage a dialogue with the Government on establishing the economic development duty early in the next Parliament.
