Time to learn from Wales

The greater flexibility that devolution has brought to Wales exposes the shortcomings of England’s approach to economic development, says Matthew Jackson

The last year has seen a frenetic period of policymaking in England around the role of local economic development.

We have seen the shift from regional development agencies (RDAs) to local enterprise partnerships (LEPs); the end of special initiatives such as Working Neighbourhoods Fund; the introduction of competitive bidding for the Work Programme and the Regional Growth Fund; and the removal of a target-driven culture.

In all of this the role of local authority economic development functions has moved towards a strategic enabler of local economic, social and environmental benefit; as opposed to a direct deliverer.

Part of the challenge for local economic development practitioners is that new policy from government in England has not come with the required flexibility in terms of devolved economic development powers. This is not the case in the devolved assemblies.

Since the formation of the Welsh Assembly in 1999 it has had secondary legislative powers for the function of economic development, meaning enhanced powers for both the Welsh Assembly Government and local authorities in Wales. Looking at Welsh local economic development policy on paper over the last five or six years and there is a close symmetry between it and that of England.

Local service boards, local delivery agreements, and improvement agreements are effectively Wales’ equivalents of local strategic partnerships, local area agreements and reward grant. The remit and projects of Communities First are also closely aligned to those of the National Strategy for Neighbourhood Renewal.

The Assembly has however done something very different in its approach. It has focused on function rather than form in local economic development and has in place what effectively constitutes a national economic development plan.

These are two things which are missing in England, where the focus has been on putting structures for economic development in place rather than delivering; and where there is no national blueprint for economic development.

‘LEPs… will be restrained by the centralisation of business support, inward investment and other key economic development activities from the RDAs.’ The document Economic Renewal: A New Direction sets out the Assembly’s national plan for economic development. It particularly recognises the importance devolution provides for innovation, for partnership working with the business sector, and in shaping the conditions for businesses to flourish. These are all economic growth-related aspirations for the LEPs in England but without the constituent powers.

The document has been put together by a partnership of departments across the Assembly Government, local authorities and businesses. Is this ever going to be achievable in England with, for example, the Department for Environment working with Communities and Local Government and working in turn with local government and the business sector? It is certainly very debatable.

While the five priorities of the Welsh economic development plan are relatively generic, centring around sustainable infrastructure, attracting business, broadening the skills base, encouraging innovation and targeting business support – the strategy and delivery mechanisms are less so.

Plans are afoot to develop a statutory Wales Strategic Infrastructure Plan; to promote the Wales ‘brand’ to inward investors; to implement Basic Skills in the Workplace projects; to commercialise the concept of research and development; and to provide specific sectoral business support.

These activities are all being put in place through partnerships between the Welsh Assembly Government, local authorities and business. While LEPs will have aspirations to undertake the above they will be restrained by the centralisation of business support, inward investment and other key economic development activities from the RDAs.

The proof of the value of devolution will come in the outcomes, but I would suggest that in order for LEPs to move away from structures to functionality, the coalition government will have to negotiate and relinquish some wider powers for economic development as has been the case in Wales.