Devolution is just the start when it comes to growth

We’ve moved quickly in this Parliament to a position of ‘when, not if’ regarding the transfer of powers away from Whitehall, writes CBI North East chair Alison Thain.

26/08/2015, news




We’ve moved quickly in this Parliament to a position of ‘when, not if’ regarding the transfer of powers away from Whitehall with many areas including the North East Combined Authority (NECA) currently negotiating deals with Treasury prior to the Comprehensive Spending Review.

Critical to all these negotiations is an understanding of how the changes will drive economic growth and support businesses to grow, invest locally and create more and better jobs.

To support this approach the CBI has identified three tests for ‘growth-friendly’ devolution – all tailored towards boosting economic activity in the north east. 

The first is a clear assessment of the effect a new power may have. For example, we need to make sure it doesn’t undermine the unity of the UK’s internal single market, where businesses benefit from a common business tax system, shared financial services regulation, a common energy market and employment law framework.

Secondly, are existing local bodies sufficiently equipped to manage any new powers that maybe devolved? Perhaps more specifically, has business got a seat at the table?  Certainly the NELEP has long enjoyed representation from key local businesses firmly committed to delivering more and better jobs as set out in the Strategic Economic Plan. 

Collaboration will be crucial to the future success of city deals and other devolutionary steps announced so far.

Elected representatives in the NECA will need to work hand-in-glove with the business community to harness what’s on offer from Whitehall to ensure devolution is truly transformational, and not an end in itself. 

Businesses know what will drive investment to their region and they want to get involved. Currently, the performance of the existing 39 Local Enterprise Partnerships (LEP), comprising local authorities and businesses, varies widely across the country, so more must be done to make them a prominent and representative voice. 

We need to get national, regional and local levers moving in the same direction. Local action must be complemented by national action – local devolution of powers must be seen within long term national plans on issues such as infrastructure, skills, exports and tax and all the other important policy levers that contribute to helping make growth work for everyone. 

And following on from this is the related challenge of ensuring that further devolution measures remain free from complexity and bureaucracy. The Government has made good on its pledge to plough ahead with further devolution with the swift introduction of the Cities and Local Government Bill.

But it’s worth bearing in mind that enhanced powers will not shelter councils from needing to make further savings, particularly with the Comprehensive Spending Review looming large. The Department for Communities and Local Government is among those which are unprotected, meaning it will face further cuts.

What we now need to see is a balanced focus on delivery as well as powers. The people and elected representatives of NECA are working with the NELEP and local business as we stand ready and waiting to help make the most of the opportunities presented by the unprecedented flow of power from the centre of government to the regions. Ultimately all focus needs to be on the prize of economic growth for all. 

Source: www.news.cbi.org.uk, 2015

Tags: Devolution