Leadership Spotlight: Nigel Wilcock of the Institute of Economic Development

Nigel Wilcock is the executive director of the Institute of Economic Development (IED), a professional body representing economic development and regeneration practitioners. He spoke to Thomas Barrett about creating a balanced economy and the north-south divide.

What is top of the agenda at the IED?

Obviously, Brexit is top of everybody’s agenda. How will it shake up in the end?

We thought the economic risks far outweighed any potential upside, but none of that matters anymore. The economy hasn’t completely ground to a halt, which may have taken some people by surprise, but we’re now growing more slowly than the EU and there is no clear view on how about anybody is going to export.

Decisions on location by international businesses will be coloured by it.

If it’s problematic and costly, then companies might make some reinvestment decisions, and over time, we could see significant businesses slowly drifting away.

I don’t want to be too gloomy but there will be some sectors that will increase. Businesses with relatively small margins that are currently importing things that we absolutely need will end up locating here. We’re a big market and companies can’t afford for tariffs and exchange rates to destroy their margins, so they might think they’ll be better off inside the UK.

We’ve seen increased food investment and some of the not very sexy investments like paper and packaging.

Shouldn’t we welcome an economy that is less reliant on financial services?

That’s true. But I don’t think we’d want to lose anything. In terms of growth, the economy must grow in a more balanced way outside of London. We need to invest in public infrastructure across the country, so it’s far better and more efficient in an equal measures across the country.

If you said to me what’s been the failure of economic development over the last 20 years, it’s that we haven’t created an economy that’s even for all. If you leave behind portions of the economy or society, then you’re going to cause a problem further down the line, and that’s what we’re seeing.

We’re seeing that all is not well in financial services. That’s clearly not great for the economy of London overall.

A lot of your work is concentrated on the north-south divide. How can post-industrial towns in the north improve?

They can turn it around. That’s not to say they will recapture the glory they once had, or they will sustain a population of scale that they once had. There is too much social capital invested in these towns to walk away.

Public investment in infrastructure is a starting point. Better connectivity between them is essential to create a sense of a single economy rather than individual towns.

There needs to be more devolution so more local decisions are made closer to those locations and not in London. We’ve talked about the Northern Powerhouse, devolution etc., but there haven’t been many policies that do anything about it.

I’m always struck by how desperately we need broadband across the UK. There’s an argument that says public money should be spent on improving it.

We need to be focused on that, and obviously transport. It seems ridiculous to me that if I want to meet somebody from Sheffield, the fastest way to meet them is for us to both to go to London. That can’t be right

There are great parts of the country that you cant get to for a 9 o’clock meeting. Getting to Bristol or Newcastle from the north-west is pretty much impossible.

Has the privatisation of British Rail been a failure?

It seems a bit peculiar that in something that is essentially a natural monopoly, we need to carve out dividends to satisfy shareholders in addition to the cost of investment and everything else. The reality is we just found government was bad at running them though.

Will there be more devolution over the next few years?

I think there’s a lot of people in central government who have a vested interest in stopping it happen, there’s a lot of civil servants who don’t want to give up power and are fearful about giving up budgets. The cabinet is very south-east focused.

I’m encouraged by the level of drive and sheer hard work that is being done in Liverpool. They have a very clear vision around low carbon and super fast connectivity. That’s great. Their mantra boils down to these two things. I like that.

What does regeneration mean to you?

It means everything for everybody depending on who you are. Regeneration in the old days was more about derelict industrial sites or brownfield sites and bringing forward schemes that brought them back into life. Now, we use it more generally to talk about building communities or creating thriving economies. Every scheme seems to be a regeneration scheme! In the profession, I don’t take it that seriously, it’s just a phrase. It’s the next sentence that gives you the detail.

We’ve focused too much of physical schemes. They do create new employment spaces, but that in itself doesn’t build a community or help disadvantaged communities. We’ve been proud to pat ourselves on the back because our town centres have bright shiny buildings, but – so what? They look nice but in the end, the same old problems remain. In the most deprived parts of the UK, those bright shiny buildings have been built by and for the public sector.

If I was speaking to a minister,  I would say that the momentum that’s behind London and the SE is so phenomenal, that without far more interventionalist radical policies and changes in government structure we’re never going to see balanced regional growth.

London is accelerating away and has been for as long as I’ve been working.