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Advertorial feature in partnership with Arup
  1. Spotlight on Policy
  2. Economic Growth
  3. Regional Development
5 May 2023updated 12 Oct 2023 10:57am

Three leadership pivots for rapidly changing times

Inflation is affecting local government delivery everywhere.

By Zach Wilcox

Those of us shaping and leading our towns and cities are no stranger to change and uncertainty, but the combined impact of unprecedented political and social events has created a particularly volatile period. We have had three prime ministers in the past 12 months, are learning to operate in a post-Brexit world, and are recovering from a global pandemic.

On top of this, we have been fighting the impacts of inflation for over a year. According to the Building Costs Information Service, materials inflation was almost 20 per cent last year, with labour inflation at over 12 per cent. Research conducted by Arup and the Institute for Economic Development found that in some places upwards of 40 per cent of local government capital expenditure had been put on hold or cancelled in 2022 due to inflation and supply chain disruption. Inflation has hit across the country and had acute impacts on those places which need investment the most.

Despite these challenges, civic, business and third-sector leaders are delivering meaningful projects through dynamic leadership. We have to handle these major changes and risks but keep a focus on delivery. We are all looking to manage our risks either through building better partnerships, finding new ways to deliver, or learning from places which have navigated similar issues. The leaders who will succeed in delivering through uncertainty will pull those three aspects together – innovation, relationships, and learning.

Finding new ways to do things

Just because we have fewer resources to achieve the same outputs does not necessarily mean we face a negative sum game. There may be legitimate reasons to de-scope a project, but necessity is also the mother of invention. Local government and businesses have found this in the past; being resource constrained gets us thinking and working in new ways. During the Covid-19 pandemic, we had the creative licence to try new services and infrastructure.

The challenges we face can give us new perspectives and creative freedom to re-evaluate our projects. A common example of this is around affordability. Arup regularly works with regeneration partners to find ways to reduce costs without impacting on capacity or quality. And we find new ways to pay for projects – capturing value that results from investment to help recoup the costs. It is about changing the value proposition of our projects, and not being limited by our traditional ways of working or our old business cases. The world will continue to change – so our approach must remain flexible.

Keeping stakeholders on-side

During periods of change and challenge, our trusted relationships get us through.

Since local government feels smaller due to inflation, we must be bigger in influence. With fewer resources, local government may need to crowd in investment. Public-private relationships are built on a delicate balance of risk sharing, finding common objectives, and being clear where priorities differ.

To keep these relationships productive, we need to communicate clearly: how have our risk appetites changed? What are the new “red line” issues on each side, such as protecting social value and net zero? Where are you willing to adapt in order to deliver? These conversations are essential to functional working relationships. Building on our history of public-private working, the private sector could find new opportunities to shape more sustainable and inclusive communities, even when resources are constrained.

Local relationships are also incredibly important. Engagement and co-design on projects bring more value to our communities. The pandemic created the need for local leaders to build new, positive relationships – despite the terrible circumstances. Stronger relationships between local leaders and diverse communities create more inclusive and sustainable places. We need leadership that can drive engagement throughout every stage of development, including collaboratively adapting projects when circumstances change.

Using your resources

Most of us do not have the institutional knowledge and capacity to manage change at this scale and pace. We have not seen inflation like this for 40 years. Add on navigating Brexit and delivering net zero, and the pace and variety of change becomes more than any of us can handle on our own.

We have intelligent and experienced leaders, but even the cleverest need to lean on trusted partners. In local government, we don’t learn enough from each other’s experiences. We need to look for people facing similar problems to share best practice, our triumphs and mistakes. Success does not begin and end within our political boundaries; we must work with our neighbours to solve the problems we all face.

And in business, we need to learn each other’s pinch points and see where we can find common ground. Business has more capacity to digest the changing markets at pace, so what can we share with local government partners to their mutual benefit?

Those leaders who use their networks of trusted advisers, who open up about what they know and do not know to navigate uncertainty – they will grow the most from this period.

From surviving to thriving

We are all trying to deliver meaningful work that makes a difference to communities and places. We have to learn in order to deliver that transformation in this rapidly changing context. Leaders need to take colleagues, delivery partners and communities along the journey, so that we end up with lasting adaptation to how we collaborate to improve our towns and cities.

It will take bold leaders to find new ways to do things, to broker honest conversations with stakeholders, and to call on their resources – while showing some vulnerability, too. Leaders will need to grant themselves permission and get broader buy-in to try things, even if they might fail. The bravest leaders, who take this head-on, will be the ones who make the biggest difference. They will be the ones who change things for the better.

This advertorial feature originally appeared in the Spotlight policy supplement on regional development. To read the whole supplement click here.

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