Six days into his premiership, Andy Burnham pledged “growth in every postcode” of the UK. It is an ambitious goal and was issued ahead of a visit to SNP-governed Scotland, tacitly acknowledging that this is not something Labour can achieve on its own. If growth is the goal, devolution is and has been the means. That is true for this government, but also previous ones – at least as far back as the “Devo Manc” deal that tempted Burnham out of parliament and into regional government.
However, the subsequent series of devolutions and “city deals” over the decade-plus since have been criticised for focusing primarily on big cities and not enough on small cities, towns and coastal and rural areas. When Labour swept to power in 2024, the party gained MPs in a number of these rural and coastal areas, just as invested in delivering prosperity to their constituents as their more metropolitan colleagues. How should the government navigate further waves of devolution to bring that promised “growth in every postcode” to areas of the country that have too often felt left behind?
“I don’t think we know what county shire devolution really looks like yet,” says Maya Ellis, the Member of Parliament for Ribble Valley in Lancashire and a member of the Labour Rural Research Group. The group comprises over 40 Labour MPs who represent seats such as coastal Suffolk, rural Cumbria and Norfolk.
Ellis points out that many of the devolution deals to come are in these “shire” areas and that the legislation itself provides for a lot of flexibility. Ultimately much will depend on who is elected into those mayoral roles and how they decide to shape devolution. Ellis adds that there is and should be a role for government in creating “consistency” and the “optimum best practice” across devolved areas. However, she adds, colleagues have already raised concerns about how the current devolution deals are currently working for rural communities. For example, in devolved areas where there is a core city in the middle, policy and strategy tend to be dominated by the needs of that city rather than inclusive of the needs of rural areas.
Central government also needs to understand the limits to its knowledge, Ellis adds. “How you improve productivity in somewhere like Lancashire is very, very different to how you improve productivity in the centre of Manchester or London, and so it’s actually really hard, I think, to set productivity policy and innovation policy in London for a shire county,” she says.
For Ellis, leadership is crucial. “When devolution works well – and should work well – you need someone or people leading it who can be strategic and understand the variety [of the region],” she says. That means being brave about focus and managing relationships with a huge number of economic partners and stakeholders.
One of the people working on this agenda in practice at the local government level is Richard Wearmouth, Conservative Party deputy leader of Northumberland County Council and the cabinet member with responsibility for business, growth and regeneration.
“Whichever of the two parties have been in charge at Westminster, there’s been a general sort of push towards devolution, which we welcome as a county council, and we’d like to see more of that,” says Wearmouth.
Northumberland was part of the North of Tyne Combined Authority created in 2018, and since 2024 has been part of the larger North East Mayoral Strategic Authority. Through these devolution arrangements, Northumberland has been able to draw down capital funding to pursue significant interventions in the local economy, Wearmouth explains, which spans small villages, coastal former industrial towns such as Blyth and market towns. “We’ve had, in one way, shape or form, virtually every bit of government programme happen here, and we’ve been very happy for that, and we’ve been a major beneficiary of government funding, which can’t be said for everywhere,” he adds.
These have included reopening railway services between towns, road improvements and school building programmes. Northumberland has also been able to play an important role in shaping the local industries towards changing economic requirements.
The coastal town of Blyth was historically a shipbuilding port and has now successfully positioned itself as a significant base for the offshore wind industry, Wearmouth says. That has led to the establishment of The Offshore Renewable Energy Catapult, a research and development institution, in the town. Northumberland was determined that local people should have access to those jobs and built a STEM centre to enable both young people and adults to develop the technical skills for employment in the sector. “It’s done very well. It’s getting people into apprenticeships and jobs when they leave at post-18. But we didn’t want to stop there,” Wearmouth says.
Construction is under way on an Energy Central Institute, with a focus on degree- and Phd-level learning and which will bring in universities from the region to “create pathways to employment alongside employers that are perhaps not your traditional university courses”, according to Wearmouth.
Northumberland is also “cautiously welcoming” a data centre on the site of a former coal power station and was able to negotiate sale of the land for £110m, a sum that has been ringfenced specifically for creating employment. The scale of the data centre operation also means potential suppliers and support industries are keen to engage with the council and establish a presence that Wearmouth hopes will enable them to retain more of the economic value locally.
This use of local assets to build industries and a new sense of identity is something that could be the key to economic growth – in rural and coastal areas, but in cities too.
“It’s not about cities versus small towns, or urban versus rural areas, or central versus coastal,” says Philip McCann, professor of urban and regional economics at the University of Manchester. “That is a political narrative that became particularly salient after the global financial crisis, but particularly after the Brexit vote.”
McCann has been a strong critic of the “left behind” terminology adopted across the political spectrum and media. Prosperity, his research argues, is spread across cities and towns, with some towns doing much better than cities. “Liverpool, for example, is less prosperous than all the areas around it,” McCann explains, which makes the UK an outlier is that there is no relationship between the size of a place and its prosperity.
Many areas in economic decline have lost their purpose, whether that is former industrial areas or Victorian seaside resorts, McCann says, and they must develop a new purpose, using the assets they have in order to achieve this and bring investors in. “These places need to be given the powers and resources to reconstruct those pathways to a new model,” he adds. Another key element of that it decentralising the financial system to enable money to be raised in cities to invest in new ventures in nearby towns, rather than accruing to London.
McCann is broadly supportive of the direction of devolution, but cautions that these efforts will fail without a clear evidence-based understanding of what the problem is. “All parties have gone down this [‘left behind’] rabbit hole, and that makes it very difficult to think about how you make policy which is going to be effective, because you’re basing it on a framing which is a political narrative,” he states.
That question of framing leads to a more fundamental one: what kind of economic and spatial settlement is devolution actually intended to produce? “I’m not sure we have a consensus of what our political choice is right now,” Ellis tells Spotlight. That could be “agglomeration economics” – that rural areas exist as the dormitories for the big cities, and that’s where the productivity is going to be. Ellis has a different vision: “Fundamentally part of our Britishness is that we have beautiful countryside, we have different sized towns and cities. We have diversity and variety of community, and we want to maintain that.”
Whether there is room for that as devolution proceeds would seem to be in the hands of political leaders and whether they truly want growth in every postcode.
This article first appeared in Spotlight on Economic Growth: Rethinking New Paths to Prosperity
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