Introduction
Glenn Athey and Mike Spicer write about some of the fundamental policy changes that may be required from a new government after the UK General Election, and what Local Authorities and Partnerships can do now to prepare, advocate and lobby ahead of that.
There’s a general election on the way in the UK in 6-12 months’ time. This could see a change in government. With multiple long- and short-term challenges facing the UK, there could be some fundamental shifts in policies and underlying systems to address these.
If we were running economic development or corporate policy at a local authority today, we’d be sharpening our pencils and exploring what these changes might be (for example – see here), and how we can influence them.
This short article sets out why you should engage, and how you can prepare and take advantage.
What’s up for change?
There could be some major changes ahead. Highlights include the following:
Levelling up
Or as we prefer to call it, local and regional economic development. It’s a concern for all parties. But in recent years it has been characterised by cycles of expectation-raising followed by…no government reform or action. An aspiration of the Levelling Up White Paper in February 2022 was to end the damaging reliance on competitions for even basic funding requirements. This was not matched by deeds. Just a few months later a set of new competitive grants was launched by DLUHC with awards for local regeneration projects decided in Whitehall.
To this day – most months now see the launch of new funding competitions for local economic development. In the last few we’ve seen new competitions for capacity funding for planning departments; for small-scale renewable energy projects; and even one for chess tables in public parks.
Who gets the money?… is the critical question. For a new Labour government, they could fundamentally revert to socioeconomic need, and look at those localities so far behind the national average on labour market participation, skills and qualifications, wages, and skilled job creation. Matching their political heartlands, this would tend to focus on former industrial areas, and metropolitan areas in the North and Midlands. Perhaps London would also be included, due to its high levels of worklessness and poverty.
Bye-bye Towns Fund and High Streets money? The current UK government (2010- present) focused a lot on towns and high streets and eschewed the previous government’s (1997-2010) focus on former industrial areas, deprived inner-city neighbourhoods and lagging rural areas. Funding for R&D has also favoured existing clusters of research institutes and firms in places like Oxfordshire, Cambridge, and London. We could see some sweeping changes here in terms of the places that get prioritised for resources.
Fiscal frameworks
To do anything significantly different beyond geographic redistribution, any new government will need to reform the way HMT approaches local growth. The annual process to adjust overall spending to meet arbitrary medium-term aspirations for debt dynamics has throttled public investment. It has created uncertainty around almost every major infrastructure scheme in the UK with taxpayer funding. Most recently this has reached HS2, the fate of which (at the time of writing) now hangs in the balance.
The Shadow Chancellor has committed to keep the broad outlines of the present fiscal framework if Labour were to form the next government: current spending fully funded, debt-GDP ratio falling by the end of the next Parliament. But today’s fiscal strategy (Charter for Budget Responsibility) is more detailed than that, containing caps on welfare spending and targets for year-to-year borrowing. Across both main parties, there is a lot of space to develop new targets and frameworks – especially around the treatment of borrowing to invest in public assets, such as infrastructure.
This is important for the following reasons:
- Infrastructure investment needs to be increased significantly and achieve greater confidence among private-sector co-investors. All the evidence points to infrastructure in the UK, especially for energy, water, and transport networks outside Greater London, being below first-world standards. Realistically, addressing these deficits will require a big increase in capital spending and major reform of local government finance, including fiscal devolution.
- Fiscal devolution and reform of local government finance. Michael Gove’s three-stage roadmap for reform of local government finance – published after the Levelling Up White Paper, in July 2023, restated the government’s commitment to centrally-run funding competitions, noting their ‘valuable contribution…to driving value for money and identifying the best projects for certain programmes’. Though in a nod to the White Paper, the government also committed to exploring ‘allocative approaches where they can best achieve specific outcomes while minimising demands on local authorities.’ In other words – funding by formula, rather than by competition, remains a live, if distant, prospect for all but the most advanced devolution deal areas.
The Labour Party has expressed its intention to reduce the scope of competitive funding for local economic development, presumably in favour of more formula-based allocations. A ‘Take Back Control’ Bill is promised to increase delivery responsibilities to local areas across a range of public spending categories. Glenn Athey and Pete Tyler have written about the long history of regional and urban funding fragmentation and then consolidation here.
But the Shadow Chancellor is silent on fiscal devolution – i.e. the transfer of financial power and resources from the UK government to other tiers of administration. If a Labour government were to move away from locally-collected business rates towards a nationally-collected online sales tax, as the party is committed to, then confronting fiscal devolution will be unavoidable.
Land use planning and development control
To judge by the volume of column inches devoted to it, and statements from leading politicians on it, there is now strong momentum behind reform of the planning system.
Across the political spectrum, there is broad agreement that it takes far too long, and costs way too much, to build anything of scale in the UK. The country faces an acute shortage of housing – especially social housing. Grade A industrial and R&D premises tend to be fully occupied. Progressing major energy or transport schemes is painfully slow: according to the campaign group Britain Remade, nearly 10 of the 12 years it currently takes on average to build an offshore wind farm is accounted for by planning and regulatory processes.
Change comes hard in the world of planning – in Westminster, as in local planning disputes. But if some change is inevitable, what form could it take? As a devolved competence, government energy would be directed at England’s frameworks, but this could still influence policy elsewhere in the UK.
An incoming government seeking reform would likely start from the basic objectives of:
- Injecting more certainty and reducing risk in the system for developers
- Releasing more land for development
There are several paths available to progressing each goal, from the incremental to the radical. Small but useful improvements to the current system could include investment in planning capacity, extending the use of permitted development rights and some targeted release of Green Belt, such as land of low environmental quality close to railway stations.
The more radical options would change the very basis of land-use planning in England – such as through the introduction of flexible zoning and a rules-based approach to consents. The UK is an outlier among developed countries in not having predictable, rules-based systems for decision-making on land use – instead favouring long, adversarial, politicised processes that are highly uncertain for larger developments.
Moving to a rules-based system for consents would reduce local political control over new developments – at least after a local plan is adopted. Carrying it through would surely risk a major loss of political capital for a governing party because of how this agenda intersects with real-world controversial developments. This would also be true for the ‘street votes’ proposal now doing the rounds: any transfer of power away from planning committees could be easily weaponised against the UK government.
Many local authorities are more ambitious about climate change than the national government
But in any case, delivery does not match aspiration. For example, the UK’s only (semi) advanced proposal for a new mass transit system serving a major urban area is the West Yorkshire metro. The Mayor talks of getting spades in the ground – by 2028. We’ve also seen Labour’s spending pledge of £28bn on Green Infrastructure watered down already – a result of them applying their own fiscal rules ahead of time.
As Glenn has written here, seriously addressing climate change requires some fundamental changes in market structures, financial vehicles, incentives, demand and supply. If the climate change transition were a marathon, here in the UK we’ve only just about got past the first couple of miles. The government’s role is critical – not just in leading and funding, but in structural change to markets, economics, and finance.
Why engage?
Serious economic developers are serious about advocacy and investment promotion
Fundamentally, there is a window of opportunity to increase the profile of your local area and input into the policy-making and prioritisation process. If you want to get some debate between the public and local parliamentary candidates – perhaps you need to set out some well-reasoned local challenges and opportunities.
If you think the prospective policies might be retrogressive or harmful to your locality – being able to articulate this, and perhaps how policy could be improved is critical.
So – we’re talking about shaping the devolution and levelling up agendas from the bottom up. Also, there’s a tendency for new governments to junk old ideas, even if they work. You need to articulate what’s worked for your locality that you would like to see continue.
“Here are my locality’s priorities, they are well founded with good support across local leaders and stakeholders – how will your new policies and approaches support this?”
The idea that a new government comes in with a fully formed delivery programme is fanciful, to say the least.
For a start, the ministers and cabinet members will be appointed within the first week of a new government. Secondly, there needs to be a strategic decision by the PM and cabinet about which challenges and legislation to tackle first. Thirdly, the capacity of the civil service and public sector to deliver massive change, or even a big new investment programme has been weakened over the past decade. So – there’s going to be quite a bit of time and scope to influence policy and delivery.
Most of all: the current policy environment, toolkit, priorities, and frameworks – they will most likely change in some quite radical and new ways. Don’t assume things will continue as with the last 13 years. To get an early understanding of this – you need to engage with the policy propositions, the personalities, and the key decision-makers. To engage with these people and agendas – you need to be clear about your local story, and what your needs and priorities are. A key initial question would be – “here are my locality’s priorities, they are well founded with good support across local leaders and stakeholders – how will your new policies and approaches support this?”
Advocacy is a significant part of the local economic development toolkit – this means being able to articulate and explain how your economy works and performs, its challenges, opportunities and an agenda for investment and action.
This advocacy is not necessarily very political in a partisan sense – if it is rooted in evidence, agreed by a wide range of stakeholders and backed by a broad spectrum of business and community organisations.
If you are not doing advocacy, you are not doing local economic development properly. Funding for local economic development and regeneration can be a bit of a beauty parade, to put it quite bluntly – and it has been, with stories of ‘star chambers’ and marginal constituencies being favoured with grants for local regeneration. Whilst we don’t advocate this, it still suggests that you need to have your advocacy and campaigning messages ready.
How should places engage Whitehall after a general election?
Whitehall is more likely to engage if you have a constructive agenda. You might have significant needs, but you require a plan to achieve these which matches the policy objectives of the new government.
Objectives can be shared, but opinions can differ over the means of achieving them. It’s up to you to convince Whitehall that your means and methods are going to be more cost-effective and more rapid.
You can be asked at any time – why should the government fund you or your locality? Even if you think the money is in the bag, Whitehall can halt processes. Perhaps the latest HMT budget has shaved a few billion of the department’s budget and they need to cut back programme commitments. You need to be ready for this and to lobby and argue for your locality.
Even if you are a non-partisan stakeholder at the local level, such as a Chamber of Commerce or community group, pulling together a policy manifesto can be a positive exercise even if you don’t achieve influence with it, as Mike’s written elsewhere (https://www.policydepartment.com/post/business-policy-manifesto-tips)
How should place leaders prepare for the general election?
Build profile and awareness of your locality:
- Ensure clear messaging about priorities and opportunities
- Have clear differentiation from other localities
- What’s important – firms, industries, locations, assets
- What are the opportunities?
Build on your track record
- If you have exciting pilot projects that map onto Labour’s priorities it’s well worth trying to publicise them in policymaking circles
- Reach out to its friends in Think Tank land or public intellectuals with a big following on social media
Ensure you have a clear devolution ask / policy ask:
- Explain if/how current policies do not work for your locality and why
- Suggest alternative policies, vehicles and mechanisms
- Have a clear idea of how a new devolution arrangement could benefit you; or which may present risks that will need to be managed or mitigated against
Have a ‘top 3’ projects and programmes:
- These are the actions or projects that would make the most positive difference to your local economy
- You should have some firm plans for delivery
- And you should have a wide coalition of stakeholders, leaders and partners on-board
‘Lobby the lobbyists’
- Realistically, those outside political circles with the most access to the next government are national lobby groups like the LGA and CCN for local government; national business networks for the private sector
- If you can influence their agendas – that’s a good place to start.
In sum – in the North East of England we have a saying “shy bairns get nowt” – which means that shy kids get nothing. If you don’t ask, there’s no chance of you getting what you want. You can’t afford to be shy, now can you?
Need help positioning your local area or city to influence policies and decisions ahead of the next General Election? get in touch with Mike and Glenn
About Mike
Mike runs PolicyDepartment – an economic development consultancy. PolicyDepartment helps places and industries figure out how to succeed in the changing world of business. We conduct research, develop plans, and help them to access government funding. We design, appraise, and evaluate enterprise programmes.
Get in touch via LinkedIn messaging or the contact form on our website.
About Glenn
Glenn runs his own consultancy, Mylocaleconomy. We help local leaders translate their economic ambitions into winning advocacy and solutions that get funded. We work all over the UK – from the Highlands of Scotland to Wales, Bristol, Teeside, North East England, Gloucestershire, London, Cambridgeshire and Sussex.
We love challenging assignments, complex opportunities, and intractable problems. Our vocation is to help city, region and local economies succeed and for prosperity to be sustainable and shared.
Get in touch via LinkedIn messaging or the contact form on our website.