Collaboration, Co-ordination, Connections and Complementarity

Local expertise is indispensable in designing effective economic policy at the regional and local level. Against a backdrop of exceptional fiscal constraint it is more important than ever that public investment is aligned across regional and local boundaries, and between national, regional, city and local levels, to drive sustainable growth and job creation, and push up productivity. Getting the right balance between central government, regions, cities and localities is crucial to this. The business-led RDAs remain central to driving growth.

The new focus set out in New Industry, New Jobs, to remove barriers to growth in markets which have high economic potential, will require a deeper strategic dialogue between the Government and its sub-national partners, including RDAs and local authorities, as well as between regions and within regions.

In addition, constraints on public spending make it more important than ever that public investment is effective and avoids wasteful duplication. This will require greater coordination between national, regional and local levels to maximise the economic impact of public investment. Shaping the conditions for growth and job creation and an active approach to investing in our capacities for growth are now central to national recovery.

This framework does not set new objectives for regional or local economic development. The new Regional Strategies will need to provide a vision for achieving sustainable economic growth, and set objectives which reflect both national and regional priorities. Future reviews of Local Area Agreements will also need to take account of this framework.

Britain’s success in achieving this will be measured not just in its aggregate performance as a country, but in ensuring that economic and jobs growth reaches into all of Britain’s regions and localities, with each place performing to its full economic potential. This Framework sets out how the Government expects English Regional Development Agencies (RDAs), local authorities and other public sector agencies to collaborate and align their resources to deliver these objectives.

But no matter who takes the lead, consultation is key so interventions complement each other in the national interest.

Regional and local strategies should consider key economic policies including:

- Skills, where RDAs will in future work with the local authority Leaders’ Boards, sub-regional partnerships and further education providers, to articulate business demand in a regional skills strategy;
- Innovation, where RDAs will help bring universities and businesses together to collaborate and will channel resources into support for pre-commercial technologies and local science and innovation working closely with bodies like the Technology Strategy Board;
- Employment, where regional, city and local action can boost job opportunities and provide the effective transport links, the accessible child care, and other support on the ground to help people get into, and progress, in work;
- Infrastructure, where clarity from regional, city, and local partners can provide the certainty businesses need to make the long-term investments in transport, utilities, broadband networks, and housing which underpin growth;
- Finance for growth, where RDAs will support the effective and coherent investment of public-private funds such as the Innovation Investment Fund; and
- Potential growth sectors, where regions, cities and localities should work to remove barriers to growth for key sectors in their areas.

Places should focus on their particular strengths, not try to replicate the full range of nationally important sectors in every area. Investment should reinforce clustering effects driven by local and regional geography, commercial and university strengths, not try to develop such clusters from scratch.  Evidence suggests that attempts by public authorities to create new clusters are almost invariably unsuccessful. Instead, any measures to promote clusters should support market developments.

The Government has an economic objective to raise the rate of sustainable economic growth6, with all nations, regions, localities and neighbourhoods performing to their full economic potential. The Government also has specific objectives to increase employment (including among disadvantaged groups and in the most deprived areas), and to increase the economic performance of all English regions and reduce the gap in growth rates between regions.

Industrial policy is devolved in Scotland, Wales and Northern Ireland. This framework only applies within England. However, the Government will work with the Devolved Administrations to co-ordinate its approach, particularly regarding investments of national strategic importance.

Industrial policy will need to be seen in a wider, strategic way at sub-regional and local levels. This means that local authorities need to consider the market impacts of local procurement, local authority regulatory roles, and the quality of public service delivery. For example, the quality of local services like schools, the availability of housing, or the quality of the local environment may influence where a business locates; business perception of how local authorities fulfil their regulatory functions such as planning, building regulations, or environmental health can be a factor in whether markets grow; and how public bodies use their roles as customers and employers can drive up innovation and skills in developing sectors. In future, the Government expects sub-regional and local economic development partners to consider how the actions of public sector bodies in all these respects are affecting economic growth and employment.

Chapter 5 sets out the roles of different spatial levels in providing support, where appropriate, for the Government’s current sectors targeted for intervention: digital economy; low carbon technologies; life sciences; advanced manufacturing; and the creative industries. In addition, the Government is taking forward work in a number of other sectors including tourism.

Business Link should prioritise the following services:

- helping business to take advantage of the opportunities available coming out of the recession;
- targeted intensive assistance;
- pre-start-up and start-up support;
- advice to help SMEs ensure prompt payment from their buyers through better credit management; and
- support for businesses facing difficulty accessing the finance they need: the financial intermediary service.

But the evidence base for the required trade-offs between economic and social and environmental objectives remains unclear and essentially political.

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