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Counties capitalising on the industrial strategy

Brexit will force a major rethink of how business is done in Britain. Following the government’s industrial strategy, released late last year, there is a chance for county councils to help create localised industrial strategies.

County economies already account for 41% of national gross value added and are net contributors to the Treasury. But they face many challenges. National policy continues to concentrate on what Brexit means for London and the city regions. Many counties face structural challenges ranging from poor infrastructure and low productivity, to workforces that lack the skills businesses want.

Whilst the County Councils Network (CCN) has argued that county authorities should be the ones to develop local industrial strategies, the government’s national industrial strategy has looked to local enterprise partnerships (LEPs) to deliver economic reform.

We have worked with the CCN to explore the challenges and opportunities facing county councils.

Brexit and county economies: uncertainty and opportunity

England’s 37 county councils are home to 26 million people. Their businesses collectively contribute 41% of the country’s GVA. Their residents provide a £54 billion tax revenue surplus to the Treasury1.

Counties illustrate the risks and opportunities inherent in Brexit. Sectors of vital importance to county economies, such as agriculture and social care, are heavily reliant on migrant workers with 27,000 EU nationals working in UK agriculture in 2016, amounting to 8% of all those employed in the sector2. Many local businesses depend on easy access to the European and world markets.

EU structural funds provide an invaluable source of income for some counties. So the potential end of this revenue stream is a great concern. Innovative thinking and forward planning will mitigate these risks as we move towards Brexit.

Counties need to move away from the low wage and low skills economy, linked to low aspiration and an insular view of where business should be done. There is too big a gap between dynamic export businesses with outstanding educational attainment and training and low-wage, low-aspiration static communities.

Brexit could drive a different way of thinking – one that recognises we will need a workforce that can compete with Singapore and South Korea as well as France and Germany.

This cannot happen without investment. So it’s vital that the government supports LEPs covering county areas. These would devolve skills and education to local people and provide adequate funds for investment in infrastructure. Counties could also be empowered to attract inward investment with new dynamic propositions.

Collaborative partnerships: counties and LEPs

The government’s industrial strategy green paper outlines proposals for local industrial strategies led by the LEP in specific areas, with support from local councils.

This has frustrated some in local government. Many counties don’t share coterminosity with their LEPs meaning that many work with two or even three LEPs who overlap their county boundaries. This can become a difficult juggling act.

Despite the concerns over the transparency of LEPs, many county leaders have strong relationships with their LEPs, and see the value in having strong links with local business leaders who they feel are represented well on LEPs.

And given councils are typically the accountable body of LEPs, and are represented on LEP boards, there are opportunities to build on existing collaboration. Many counties have a long track record of working with local businesses, and many county councillors have significant business experience. It will be important that this experience along with a detailed understanding of place, can be used to help shape local industrial strategies.

We worked with the CCN to examine the challenges and opportunities counties face in preparing for Britain’s new economic future and the best way to develop local industrial strategies. Supported by expert analysis of data from our Place Analytics tool, Capitalising on the industrial strategy explores the role counties can play in the industrial strategy in a post-Brexit landscape

References

1. Capitalising on the industrial strategy, County Councils Network, 28th March 2018

2. Migrant workers in agriculture, House of Commons Library, 4th July 2017

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