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Can local economic strategies bridge the Brexit divide?

As far as Brexit is concerned, all eyes remain firmly on Westminster, but could local areas hold the keys to economic revival?

A new report, published yesterday by the think-tank Localis calls on government to have local industrial strategies in place for every part of England by the end of the Brexit transition period.

It also urges ministers to direct more resources to these local industrial strategies, instead of focussing the efforts of Whitehall on Greater Manchester, the West Midlands and the Oxford/Cambridge corridor.

In particular, the report highlights the role directly-elected mayors and combined authorities can play in promoting economic development in their respective areas.

Speaking at the report’s launch in London, Localis chief executive Liam Booth-Smith, said an industrial strategy is not just a way of ‘revitalising places’, it is also a way of ‘making the economy work more in the interests of the people’ who are part of it.

Mr Booth-Smith highlighted recent polling undertaken by YouGov for Localis, which shows two thirds of people feel they are not paid what they are worth.

‘A similar amount feel if the national economy grew of their employers did better, they would not benefit from it,’ he added.

The Conservative MP and former chair of the prime minister’s policy board, George Freeman told the report launch event he believes the 2016 Brexit vote was more than about ‘the sense among communities of a model of economic growth that was not working for them’, than a ‘finely-balanced judgement on the pros and cons of the European Union’.

‘If we are to deliver Brexit in a way that has a chance of working, it must tackle the underlying domestic and largely economic grievances that gave rise to it,’ said the Mid-Norfolk MP.

‘My constituency is 40 miles away from one of the exciting technology cities in the world (Cambridge) and it voted for Brexit,’ he added. ‘The signs were clear. It wasn’t that people had suddenly decided they had enough of regulations from Europe. They felt there was an economy being built around them, which offered them very little.

‘If people 40 miles from Cambridge are voting for a very different economics, which if it is pursued in the spirit of their anger, will damage the potential of Cambridge and Norwich to create the jobs and prosperity they need, we’re in real trouble.

‘If we are really going to build a deep economic revival, it will require a different type of politics,’ said Mr Freeman.

‘I think we need to profoundly recognise, particularly in the Treasury, that there might not be such a thing as the economy. It might be better to think of a series of local and regional economies, and build the national economic revival with one local economy at a time.’

The Conservative MP added he would like to see a much more compelling economic model, including a digital skills passport for every school leaver, which could provide tangible benefits.

‘If we are going to unleash local economies, it makes getting the balance right here in London between higher growth and controlled public spending,’ he added. ‘I would argue that in our first eight years, we focused rather more on controlling public spending than on unleashing higher growth.’

‘We will have to embrace new models and reward the behaviours we want to see,’ he said and called suggested financial incentives for local leaders who can reduce health costs.

‘I see locally a lack of accountable leadership, made worse by the silo model of funding. You could need to be a very brave person to get involved in local government leadership right now. Unless we change that and create a culture where good people can lead, innovate and be rewarded for success, I fear we will end up with the most talented people leaving our public services.’

Also speaking at the event was the political editor of the Economist, Adrian Woodridge, who said the current economic model in this country is broken.

‘I don’t see any sense of a compelling solution,’ he told the event. ‘We have the “burn-it-all-Corbynite” solution, which will make things even worse and we have a government, which is moving in the right direction but is paralysed.

‘We have an addiction to centralisation in this country,’ added Mr Woodridge. ‘We have talked about devolving powers and responsibilities for a long time, but always the central power reasserts itself. Now, we have the worst manifestation of this: retained central control over what really matters and localised spending cuts, which gives devolution a bad name.’

‘This country is also the wrong size,’ he added. ‘It’s too big to be Singapore and be well managed from the centre. And it’s too small to be America and have lots and lots devolution.’

But the editor of the local government magazine The MJ, Heather Jameson, responded by saying that local government ‘has never failed to amaze me on being handed powers and responsibilities’ and called on councils to ‘crack on’ and take the initiative.

‘There is a strong message that we still don’t have a plan, post-Brexit,’ said Ms Jameson. ‘People still feel uncomfortable and are not ready for the future. For me, local government has got to seize on that opportunity.

‘Looking at the way devolution has worked thus far, when you look at the metro mayors have been done by central government diktat. It’s not the right way to go. This should be about bottom up reform.’

  • To read the new Localis report, The Delivery of an Industrial Strategy, click here.

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