A new report soon to be published by The Future Governance Forum (FGF) argues that all levels of the state will need to work much more effectively together if the UK Government is to successfully use its Modern Industrial Strategy to generate jobs and growth in every corner of the country.
Report author and FGF Research Fellow, Alex Bevan, argues that as major transitions across energy, defence and technology shape our economic future, connecting the rewards with underserved places will be a major test for the Modern Industrial Strategy.
The report proposes new tools and investment boosts
The report, Impactful Devolution 03: A toolkit for regional growth and industrial strategy, contains the following points:
- Proposes five new tools designed to ‘tilt the scales of the economy back towards working people’ and hardwire regional growth into decision-making across government. This includes a new Renewal Investment Tracker hosted on gov.uk designed to expose disparities in where the most growth-friendly public investment across the UK is being spent. Incentivising a more targeted approach would provide underserved parts of the country with the essential mix needed to drive up growth.
- Recommends boosting investment in English regions by creating new regional business development banks, locally rooted and large enough to invest at scale. These new institutions would connect the government’s move to expand access to finance for small and medium sized enterprises (SMEs) with individual regions’ business environments and a new level of dedicated financial expertise. With a mandate to co-invest alongside venture capital, and prioritise supply chains and start-ups in sectors such as energy, defence and technology, new, local banks could connect high level industrial strategy with the bottom line for SMEs.
- Argues that the way the British state is structured, more than any single policy or investment decision, is the biggest barrier to regional growth. Centralisation, uneven investment and the hollowing-out of local institutions have left the system tilted against regions other than the Greater South East, deepening disparities and holding back Britain’s growth potential. Per-person spending on the building blocks of growth – including infrastructure and innovation – is 19% higher in the Greater South East than the rest of England. Left unchecked, this long-term trend could undermine the new direction set by the government, especially in its Modern Industrial Strategy.
Supported by Community Union and Quinbrook Infrastructure Partners, Impactful Devolution 03 argues that regional growth needs to be central, not peripheral, to the Modern Industrial Strategy if the government is to deliver on its economic, political and national security ambitions.
Alex Bevan explains:
Alex Bevan, Research Fellow at The Future Governance Forum, author of Impactful Devolution 03 and former Chief of Staff to the First Minister of Wales, said:
A successful Modern Industrial Strategy should make people feel that the country is on the up again, with jobs and investment that felt out of reach becoming a lived reality. Major investments and disruption across the energy, defence and technology sectors will shape how the risks and rewards of change are shared in the years ahead. They will test how well the government can connect ambition with reality, and ultimately whether people feel that the place they call home is being renewed, or is in decline.
For too long, tackling the UK’s preventable regional divides has not been treated as core business for economic policy. Lessons from failed experiments of the past have been ignored. That must change if the Modern Industrial Strategy is to drive up growth and deliver value for money everywhere, so that renewal replaces disappointment. That’s why we are calling for a Renewal Investment Tracker hosted on gov.uk to expose disparities in where the most growth-friendly public investment across the UK is being spent and the creation of new regional business development banks boost investment in English regions.
