Why 2018 is shaping up to be a key year for Britain’s cities

Wakefield. Image: Tim Green/Wikipedia.

As the dust settles on the government reshuffle, it is time for us to refocus on the enormous challenge of the year ahead. This is shaping up to be a very important year for the future of both our cities and our country. It will be the year we decide our relationship with Europe for years to come – as well as the relationship we have with the rest of the world. It will be the year the new industrial strategy sinks or swims. It will be a year when our public services get support and adapt, or where the strain will cause some of them to crack.

It is our choice whether we seize the opportunity ahead, or risk drifting into a spiral of low productivity and low wages. As Key Cities we believe this year can be a success if we align our Brexit deal with an industrial strategy that advances our competitiveness in key sectors.

The cities we represent – which have shown greater resilience since the financial crisis ten years ago – are ideally placed to take this forward. They are at the cutting edge of manufacturing, many generating critical export earnings for Britain.

We also represent areas with leading universities and we work hard to pioneer collaboration across business and academia. Drawing on that experience, we can see that at this critical time it is essential to make sure that all policies, efforts and activity work together – across sectors and geographies – and don’t cross purposes with each other.

The industrial strategy identifies four “Grand Challenges” that Britain will have to face in the decades to come: artificial intelligence and big data; clean growth; the future of mobility; and meeting the needs of an ageing society. A good Brexit deal will support and promote these ambitions. In practical terms, if we want the industrial strategy to support advanced manufacturing to lead the world in artificial intelligence and zero-carbon technologies, we also need to a Brexit deal that supports collaboration and global market access.

At the same time, if we want to use Brexit to expand our global exports, we need to use the industrial strategy to strengthen outward-looking, competitive industries. Many of those are in Key Cities. British infrastructure will require major investment to support export growth in the post Brexit world.  We think our competitive industrial centres need better access to ports for a start, and these ports need significant investment in technology to facilitate the frictionless trade needed by manufacturing.

The same applies to the way we support our public services. To make Brexit work, our schools, our health service, and housing all need investment. The referendum sent us a message that many communities felt no one listened to them, and that they had no opportunities for a better life. Extra money for research and development, and training, in the industrial strategy was a good place to start. Money into our schools so our young people are prepared for the jobs of the future would be very welcome. Spending on infrastructure so those jobs are within reach is another step. Funding for local councils to build strong, attractive vibrant places is another key.

This really is our year to start turning around a country which has become too unequal and too divided. Right now, our priorities should be higher productivity, better wages and stronger public services. To achieve that, Key Cities will work hard this year to get a common purpose across central government, local government, business, and academia. This is our year to achieve that – to support each other, to coordinate our plans and to realise our ambitions.

The government has said that getting Brexit right is its priority. Getting Brexit right will require more than a good negotiating team in Brussels. It will require working out an industrial strategy that makes us more competitive for the next phase of our relationship with Europe. It will require a deal that allows key sectors of the future, in Key Cities and beyond, to grow and flourish. If those clash, both will fail.

A successful Brexit will also require stronger public services to support our young people and give our communities hope. Without the investment, the opportunity will slide away, and we must not let it. This time, we should back our words with deeds.

Peter Box is leader of Wakefield council and chair of the Key Cities group.


As EU funding is lost, “levelling up” needs investment, not just rhetoric

Oh, well. Image: Getty.

Regional inequality was the foundation of Boris Johnson’s election victory and has since become one of the main focuses of his government. However, the enthusiasm of ministers championing the “levelling up” agenda rings hollow when compared with their inertia in preparing a UK replacement for European structural funding. 

Local government, already bearing the brunt of severe funding cuts, relies on European funding to support projects that boost growth in struggling local economies and help people build skills and find secure work. Now that the UK has withdrawn its EU membership, councils’ concerns over how EU funds will be replaced from 2021 are becoming more pronounced.

Johnson’s government has committed to create a domestic structural funding programme, the UK Shared Prosperity Fund (UKSPF), to replace the European Structural and Investment Fund (ESIF). However, other than pledging that UKSPF will “reduce inequalities between communities”, it has offered few details on how funds will be allocated. A public consultation on UKSPF promised by May’s government in 2018 has yet to materialise.

The government’s continued silence on UKSPF is generating a growing sense of unease among councils, especially after the failure of successive governments to prioritise investment in regional development. Indeed, inequalities within the UK have been allowed to grow so much that the UK’s poorest region by EU standards (West Wales & the Valleys) has a GDP of 68 per cent of the average EU GDP, while the UK’s richest region (Inner London) has a GDP of 614 per cent of the EU average – an intra-national disparity that is unique in Europe. If the UK had remained a member of the EU, its number of ‘less developed’ regions in need of most structural funding support would have increased from two to five in 2021-27: South Yorkshire, Tees Valley & Durham and Lincolnshire joining Cornwall & Isles of Scilly and West Wales & the Valley. Ministers have not given guarantees that any region, whether ‘less developed’ or otherwise, will obtain the same amount of funding under UKSPF to which they would have been entitled under ESIF.

The government is reportedly contemplating changing the Treasury’s fiscal rules so public spending favours programmes that reduce regional inequalities as well as provide value for money, but this alone will not rebalance the economy. A shared prosperity fund like UKSPF has the potential to be the master key that unlocks inclusive growth throughout the country, particularly if it involves less bureaucracy than ESIF and aligns funding more effectively with the priorities of local people. 

In NLGN’s Community Commissioning report, we recommended that this funding should be devolved to communities directly to decide local priorities for the investment. By enabling community ownership of design and administration, the UK government would create an innovative domestic structural funding scheme that promotes inclusion in its process as well as its outcomes.

NLGN’s latest report, Cultivating Local Inclusive Growth: In Practice, highlights the range of policy levers and resources that councils can use to promote inclusive growth in their area. It demonstrates that, through collaboration with communities and cross-sector partners, councils are already doing sterling work to enhance economic and social inclusion. Their efforts could be further enhanced with a fund that learns lessons from ESIF’s successes and flaws: a UKSPF that is easier to access, designed and delivered by local communities, properly funded, and specifically targeted at promoting social and economic inclusion in regions that need it most. “Getting Brexit done” was meant to free up the government’s time to focus once more on pressing domestic priorities. “Getting inclusive growth done” should be at the top of any new to-do list.

Charlotte Morgan is senior researcher at the New Local Government Network.