Grim and Grimmer Up North

The Smith Institute has just published a report warning that the north will suffer without strong regional governance  The same day we hear that the Northern Way has fallen victim to cuts in spending of the RDAs.  Where there’s muck there’s … potentially just more muck in future.  Most of the brass has gone in spending cuts.

Filling the Gap

With the demise of the RDAs go the grand liaisons that they could resource.  Some might say good riddance to expensive lobbying and marketing fronts, glossy promotion brochures and multiple research reports by well fed consultants.  In these lean times let’s hope that the big northern LEPs have the weight to fill the gap.  Greater Manchester has kept its shape but if the rest don’t score on Regional Growth Fund will they find a renewed raison d’etre?  I don’t doubt their strength of purpose but I fear for the paucity of resources available to them.  If public funding is no longer the route to development then LEPs will need the clout and capability to direct public asset development and attract private investment.

RGF is going to be spread too thin to deliver big regeneration under its own steam and despite the hope and hype, £100m for Enterprise Zones is not nearly enough.  If we are optimistic we could view this as a further indication that the government is achieving the enlightenment that says regeneration is not optional.  Where will the EZs appear?  A maximum of ten somewhere northern says Mr Osborne (I assume that an aide showed him a map and pointed out where the north was).

The limited funds available cry out for opportunity locations rather than the most deprived places.  Harsh though it may sound, £10m a piece is not what will bring sovereign funds, developers and big employers running to the worst hit locations.  So, what will give EZs a fighting chance?   Here are a few suggestions for the Chancellor to spice up his budget:

  • Time to give the banks a guilt trip.  The Chancellor may not go the Ed Balls route and skim another windfall off the bonus spree but I recall that the banks committed to inject funds into the economy and support businesses.  How exactly is that working out?  Nat West has lately been irritating us with its pompous pledge that staff will smile more and weed pensioners’ gardens.  I’d rather they concentrated on their lending responsibilities to business.  Osborne could motivate the high street banks to relax their talon-like grip on funding for businesses setting up in the EZs.
  • This is the chance to let some of those new freedoms out of the cage such as control of Business Rate and Tax Increment Financing.  In the absence of significant hard cash, the EZs should be given the means to generate their own revenue streams and the freedom to borrow against assets, defer returns and generally make places more attractive to job creating investors.
  • Place some of the quality RDA land assets at the disposal of EZs.   Rather than the unseemly haste of a fire sale of RDA lands we could use EZs as a successor arrangement to deliver a regeneration outcome for selected former RDA sites.  Without assets any EZ will struggle to survive or have a meaningful impact.
  • Local authorities should not be treated as the enemy in this process.  Ministerial relations with local government are already low enough so the introduction of EZs needs to be a partnership arrangement.   By all means find ways for the planning process to operate quickly and smoothly in the EZ but don’t beat up the local council which in all likelihood has useful land assets, match funding possibilities, skilled staff and an established relationship with local employers and developers.  The Thatcher era EZs were one of a selection of initiatives designed to usurp local government but those were different times.  Councils are different beasts these days: much more pragmatic and agile.
  • EZs need to fit with the new economic geography of LEPs or we are in danger of a confusion of initiatives.  LEPs should be further up the strategic hierarchy and EZs would need to fit with the direction set by the LEPs.  LEPs need to be given reasons to exist and their board memberships should reasonably assume a role in directing a local EZ.  If EZs can offer a focus for job growth then the LEP can align more strategic planning for transport, environment, skills and housing.

Postscript – ‘Saving’ the Northern Way

I must apologise for using the word ‘cuts’ earlier on in connection with the Northern Way.   I’ve just been informed that recent BBC guidelines require that in future we should refer to ‘savings’ rather than ‘cuts’.  The BBC denies the story so the BBC stories – about the highlands and Cornwall – are just coincidental, obviously.

Richard Cohen