How can Government and places get the best out of Local Growth Plans?

1. Good Local Growth Plans should be treated as a locally-owned commitment to driving growth, rather than a regional variant of national priorities.

The UK government’s regional, industrial and vocational policies have seen the highest rate of chop-and-change of any policy area for the past generation.

But that’s not true at a local or sub-regional level. Nationally mandated, locally driven plans have a habit of sticking around. From our experience, in several places, Local Industrial Strategies have far outlived the former National Industrial Strategy (2017-2021). Some places even take their Coalition-era Strategic Economic Plans (updated, but ultimately grounded in a proposal to access capital funding a decade ago) as a starting point.

The reason these plans stick around is less because of the strength of their theoretical underpinnings, but because in those places, they represented the culmination of a process that helped drive prioritisation, delivered new funding opportunities, and secured enduring buy-in from local partners.

Local Growth Plans as a process represent an opportunity to bring together local stakeholders (including local government, business, public sector partners, civil society) around a mutually recognised evidence base, and to co-develop long-term strategic priorities, with agreement on how and when those priorities will be implemented.

In practical terms this means that the structures of Local Growth Plans should make room for the flexibility needed to secure strong, lasting local buy-in. That local flexibility – such as “local missions” that may deviate slightly from the national missions – should be welcomed by government if it can unblock tricky local politics or coordinate some big local investments.

2. Clusters and sectors are important – but Local Growth Plans will have to tackle place-wide barriers to growth, plus economic and social inclusion, if they’re going to endure as local documents.

Places are already talking in terms of their contribution to the government’s growth mission. They’re right to do so. But at the same time, the government is starting to signal that its growth mission will consist of many different parts. From the Plan to Make Work Pay, Skills England, the National Wealth Fund, and the national Industrial Strategy, their early signals are that there is no single overarching growth lever. Instead, places can and should think about the range of government plans as a package, when designing their Plans.

We think that means considering three different types of intervention in a Local Growth Plan:

• Bringing clusters to scale: The steps a place can take to support its local economic clusters. This is the bread and butter of a local industrial strategy: a hard-nosed assessment of where comparative advantages and growth industries are, detailed engagement with investors or incumbents to understand the barriers to even greater success, and a path to mobilising partners to clear those barriers away.

• Identifying binding constraints in place-based “horizontals”: Local Growth Plans are an opportunity to identify and broker local consensus about priorities, and how to make progress in delivering them in practice. On transport, for instance, places may need to make hard trade-offs on road versus rail investment; or capital spending for buses versus active travel. Good Local Growth Plans should provide clear steers for the best use of the marginal pound in addressing binding economic constraints, and base them in strong chains of evidence (i.e. by using price signals where possible).

• Going beyond conventional “economic development” levers to meet the local need for inclusive economic policy: Local leaders have increasingly become aware of the fact that the old toolkit of economic tools – transport infrastructure, land assembly and regeneration, business support and skills programming – isn't enough to shift the trajectory of a place. Chronic, complex problems like health, crime, or social immobility hold places and the people within them back too. In other words, Local Growth Plans should think about how the government’s four other missions can support, or gain from, the growth mission. Government, in turn, should be open to devolving other domestic policy levers outside of “hard economics” where local leaders make a convincing case based on binding local constraints.

Good Local Growth Plans will link all three of these themes into their interventions. They will get concrete and ask what it is in the transport or skills system that’s holding back growth in a specific cluster; and in turn they will challenge businesses that are set to benefit to rethink how they can support inclusion or health in their area.

Many local and combined authorities have already been leading the way on that sort of joined-up thinking, through interventions like Good Work Charters or “Working Win”/”Working Well” style link-ups between employment support and health systems. Government should clarify what tools could be available to take this work forward, including through the further rollout of the Single Settlement, and should expect local leaders to be ambitious in the scope and scale of their plans for their places.

Good Local Growth Plans will also think about opportunities to spread growth within their region. It is unwise to put all of our eggs in the central business district basket; nor it is politically feasible. Better strategies will be able to offer both something for central business districts and the more geographically-spread growth opportunities offered by manufacturing in their area.

The challenge for leaders is to pick a few such interventions that the local system can mobilise behind. Imaginative, coordinated responses are hard to design, and harder still to deliver, but the cumulative benefits of building consensus behind them make it worthwhile to invest time and effort getting this right up front.

3. Plans should be designed with specific projects in mind, and with thought to how a project pipeline can form the basis of a deeper partnership between places and government.

Once your priorities are set, they can inform the pipeline of projects which must form a core output of the delivery element of a plan. Unfortunately, many places have a shortfall of projects, with local government facing capacity challenges and shrinking investment budgets, and private capital facing daunting barriers including planning that has stymied project development and delivery.

A Local Growth Plan that actually functions as a Plan (as opposed to a strategy) should include a meaningful commitment from local partners to developing projects, and an honest assessment of where their pipeline currently faces gaps.

Part of this is setting out an understanding what places have to offer to support the national Growth Mission. The Industrial Strategy Green Paper contains some hints on what Government might be looking for out of places to support the national Growth Mission, highlighting the potential for direct intervention in strategic industrial sites of national importance, or aligning the New Towns programme with the places housing might be holding back cluster growth.

Being clear-eyed about which projects are of the scale for national significance and national intervention – and which priorities can and should be taken forward either through local funding or in partnership with the private sector – will help to sharpen the Local Growth Plans. It will also strengthen the offer of partnership with Government that should sit at the heart of any Local Growth Plan (mediated in some cases through pan-regional bodies like the Northern Powerhouse or Midlands Engine).

In return, Government should understand that project development is hard and shovel-ready projects are thin on the ground, and that the hard yards of generating, evidencing and prioritising new interventions will take time and capacity.

Whitehall should be ready and prepared to put the work needed for project development alongside places, not just in the short-term, but over the ten-year lifespans and inevitable refreshes Local Growth Plans will operate under. That should include a programme of secondments and capacity building in local and sub-regional government, where required.

Making the most of the opportunity ahead

We will look back on the past month as defining the path for the parliament to come. The opportunity ahead offered by the government’s plans is huge – if we can grasp it.

We know by now how many places across the UK (in particular our city-regions) are underperforming economically relative to their counterparts in Europe or the US. Local growth can help the UK to meet our national policy goals around decarbonisation, supply chain resilience, and inclusive growth. And the new Government has the chance to partner with an ever-more-mature set of regional partners, as devolution continues to deepen.

But the biggest risk is that Local Growth Plans fail to meet the moment, sitting as an awkward statutory interface between national and local priorities, with little impact on day-to-day decision-making in either sphere.

For Government, avoiding that risk means letting places take the lead in brokering consensus, navigating hard trade-offs around growth priorities and building coalitions, with the flexibility required to do so.

For places, that means thinking hard about delivery when designing plans, and about how they can pull the wider levers at their disposal (crowding in investment, building partnerships and laying the ground for further devolution) to support their growth priorities.

If we get both elements right, then Local Growth Plans can be the ambitious, forward-facing documents we meet the government’s mission for growth in all communities.