Local authorities are stronger together than apart

With the local elections coming up, its worth remembering that co-operation is key to development.

Cities across the country have responded to the wanted ad issued in the Localism Act. Politics outside Westminster suddenly looks very interesting. The impending referendums on elected mayors have grabbed the imagination and the headlines, but there is a quiet revolution in local governance that has been less commented upon.

Developments in the Leeds City Region remind us that championing localities is about collaboration as well as leadership. Leeds and its neighbour’s intention to follow Greater Manchester in establishing a combined authority shows that collaboration across functional economic areas is a growing phenomenon. The future story of local government will be as much about newly combined authorities as newly elected mayors.

Local champions can drive local economic growth. The areas in and around cities such as Leeds or Manchester, have vibrant economies – and what they often need most is internal and international connectivity. This description would equally apply to areas like Tyne and Wear or the Birmingham conurbation. If England’s cities and shires are going to fulfill their potential then creative approaches to investment are required. Mayors alone will not be able to provide this.

A good example of local investment to support business is provided by Northamptonshire County Council. The council made a £10 million secured loan to protect the future of the British Grandprix at Silverstone Circuits. It also made a £1.5 million contribution to a new high-tech business park to develop automotive innovations. The new technology park is expected to create 2,400 jobs and the loan could help protect 22,000 jobs in Silverstone and across the rest of the country.

Analysis in NLGN’s latest report – Grow Your Own: Skills and infrastructure for local economic growth – found that this investment can be scaled if councils are willing to pool their capital funding and borrowing capacity. The ten Greater Manchester authorities recently agreed a £1.5 billion revolving investment fund for major transport infrastructure. A single economic strategy gave the councils the confidence to allocate their own money and borrow substantial amounts to invest in a wide ranging programme of which extensions to the Metrolink are a centre piece. Joint borrowing helped to mitigate the risks that the councils faced in underwriting new investment.

The Leeds City Region wants to develop its own model for investment and is working with government in order to achieve this through the City Deal process. Leeds hopes that Whitehall will match fund £200 million worth of pooled investment cash. The money would be spent on new infrastructure to connect the sub-region’s economy. One way to encourage others to take up this approach would be to extend city deals beyond the core cities through a series of LEP deals.

Policy innovation is particularly important given the £4.9 billion spending gap inherited by local government and Local Enterprise Partnerships following the abolition of the Regional Development Agencies. The ability to pool investment is also the reason that combined authorities could have more clout than mayors in single authorities.

City mayors are often presented as business-friendly "one-stop-shops", providing clear points of contact for prospective investors. This potential will be limited unless they operate through the kind of collaborative local governance that is envisaged for the Leeds city-region.

In Birmingham there is much excitement over the potential of a mayoral race between Siôn Simon, Gisela Stuart and Liam Byrne. But their capacity to drive change will be undermined unless the city and its surrounding area cooperate. Currently the Greater Birmingham and Solihull LEP is struggling to agree on shared economic priorities with the neighbouring Black Country LEP. This makes no sense to a major multinational company making a major capital investment, such as Jaguar Land Rover looking to build a new automotive factory.

The government ducked the opportunity to support metro-mayors. Admittedly, the local politics of such a role could have proved one step too far for local cooperation. However, if mayors make narrow investment decisions based on authority boundaries they will exacerbate existing problems.

Elected mayors can be important figureheads for communities. They can also champion major investment projects, such as Crossrail, and help to attract future business investment. But local growth is equally dependent on local government. Combined authorities investing smartly – in everything from skills to infrastructure – may hold the keys to unlocking local economies.

A woman walks past Manchester City Town Hall. Photograph: Getty

Joe is a senior researcher at the New Local Government Network

Photo: Getty
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Theresa May is paying the price for mismanaging Boris Johnson

The Foreign Secretary's bruised ego may end up destroying Theresa May. 

And to think that Theresa May scheduled her big speech for this Friday to make sure that Conservative party conference wouldn’t be dominated by the matter of Brexit. Now, thanks to Boris Johnson, it won’t just be her conference, but Labour’s, which is overshadowed by Brexit in general and Tory in-fighting in particular. (One imagines that the Labour leadership will find a way to cope somehow.)

May is paying the price for mismanaging Johnson during her period of political hegemony after she became leader. After he was betrayed by Michael Gove and lacking any particular faction in the parliamentary party, she brought him back from the brink of political death by making him Foreign Secretary, but also used her strength and his weakness to shrink his empire.

The Foreign Office had its responsibility for negotiating Brexit hived off to the newly-created Department for Exiting the European Union (Dexeu) and for navigating post-Brexit trade deals to the Department of International Trade. Johnson was given control of one of the great offices of state, but with no responsibility at all for the greatest foreign policy challenge since the Second World War.

Adding to his discomfort, the new Foreign Secretary was regularly the subject of jokes from the Prime Minister and cabinet colleagues. May likened him to a dog that had to be put down. Philip Hammond quipped about him during his joke-fuelled 2017 Budget. All of which gave Johnson’s allies the impression that Johnson-hunting was a licensed sport as far as Downing Street was concerned. He was then shut out of the election campaign and has continued to be a marginalised figure even as the disappointing election result forced May to involve the wider cabinet in policymaking.

His sense of exclusion from the discussions around May’s Florence speech only added to his sense of isolation. May forgot that if you aren’t going to kill, don’t wound: now, thanks to her lost majority, she can’t afford to put any of the Brexiteers out in the cold, and Johnson is once again where he wants to be: centre-stage. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.