Are local authorities ready to manage their local economies?

The delivery of local infrastructure is changing.  The coalition government’s policy of localism is providing more autonomy to councils to set their own criteria for success, manage their own budgets and deliver infrastructure that better meets local needs.  Some of the changes are set out in:

  • The local government resource review: setting out how councils will be affected more directly by income raised locally through development via business property taxes;
  • The Prospectus: describing the Growing Places Fund, jointly funded by DfT and DCLG and paid to Local Enterprise Partnerships to support infrastructure funds targeted at promoting economic growth; and
  • Devolving local major transport schemes: setting out central government’s approach to devolving responsibility to local areas for local major transport schemes.

Alongside these major changes are smaller initiatives designed to increasingly incentivise local areas to support economic growth, for example through the New Homes Bonus or the Regional Growth Fund as well as the introduction of Local Enterprise Partnerships.  Together this package of measures amounts to a major change in how local areas plan and develop their economies.  And it may only be opening move in a much longer game.

Taken together, this policy agenda is a radical change for how local authorities think about transport, define their priorities and weigh these up against other demands on local expenditure.  Local areas can be more joined up when considering local plans for investment and economic growth, but need to act more strategically and with partners to develop a coherent local programme that delivers value for money

Some local authorities are well advanced towards this integrated local policymaking goal in support of economic growth.  Greater Manchester, for example, pioneered a Transport Fund amongst the ten local authorities that make up the City Region as a first step towards this vision.  Now, GM is broadening this vision into an infrastructure fund for the region where transport and other spatial development initiatives vie for the same local funding.  For these authorities, more local freedom and accountability will be eagerly awaited.

Other places are much less well adapted to the coming changes.  The capacity and culture for strategic infrastructure planning has withered in many places as central government has monopolised key decisions for decades.  Technical and analytical capacity in particular will be a struggle for many, particularly where local priorities need a new cross-disciplinary approach covering transport, housing and regeneration.  Another great challenge in some areas will be a need for a culture of collaboration.  New found freedoms over local budgets should be a fine opportunity for local rivals to replace old feuds and competition for central government favours with a new incentive to work together where there is a community of interest.  Even within local authorities there is work to do to break down boundaries and start closer working between teams.

The tide of localism and devolution are a real opportunity for local authorities to rediscover their voice in planning our communities, but it would be a shame if some places couldn’t develop the skills or make the leap to grasp it.