Recovering from recession – local vs. structural action

As economic development rises in the UK government’s priorities, clarifying what it is and how best to deliver it also becomes more important for all agencies. Economic strategies are produced at several geographical scales and times but rarely join up or reflect the stages of the economic cycles, so are unlikely to be fit for purpose. Regional Economic Strategies have been updated and refined regularly by RDAs but do not necessarily meet more local needs or aspirations.

CLES has been studying local economic development for over twenty years, and identifies ten danger signs from existing local authority strategies;

• A need to focus more on development and equality as well as growth.

• Too heavy an emphasis on traditional economic concerns.

• Lack of consideration of social and employment issues, including worklessness.

• The economy needs to be acknowledged in non-economic local strategies.

• Lack of connection between economic development and land use planning.

• Lack of recognition of the role of the third sector in the local economy.

• The problem of reverse devolution which threatens correct identification of very specific local and sub-local economic issues and may damage the interests of secondary town centres and rural areas.

• Lack of focus on the availability of investment capital.

• The need to foster a culture of greater innovation and risk-taking. Many strategies do not have a clear policy on innovation, creativity and entrepreneurialism.

• A lack of accountability and evaluation of the strategies.

The CLES report, based on two pieces of primary research, explores what local authorities are getting wrong in their economic development strategies and outlines a new model for local authorities to adopt when forming their economic strategies in future.

Every council should be tackling this as a matter of priority, because legislation will impose an Economic Assessment Duty on councils from 2010. If councils fail to rethink their approach now, they could doom economic development and postpone recovery from the recession.

But the CLES title suggests a particular localism perspective which may not be appropriate or sufficient in responding to such a severe recession, particularly when national government has increased expenditure on high level interventions through the financial system, committed to commissioning the private sector to tackle worklessness and is enacting structural changes which seem likely to distract from effective short and medium term implementation among public bodies. All of which could be a case of shifting the deck chair as the Titanic sinks.

The IDeA National Guidance on Economic Assessment may help and will be launched at the Institute of Economic Development annual conference on 7/8 October where the wider agenda provides information and insights on many of the shortfalls identified by CLES.

Towards a new wave of local economic activism; the future of economic strategies CLES 2009