Central government plans for economic growth may not adequately reflect the uneven economic geography in the UK. While some areas and cities are growing, growth is concentrated in urban cores, and not all communities will benefit equally. There are ongoing challenges at both the national and local levels in reconciling place-based policies with sector-neutral policies, and in coordinating economic development efforts across different administrative boundaries and levels of government. Local governments also face capacity issues in taking on more responsibilities with fewer resources.

1. Do plans of central government for
economic growth reflect our spiky
economic geography?
Kevin Richardson
www.slideshare.net/30088

2. •Theory and a ‘spiky’ world
•Successively changing policies
•Current Case Studies
•Local Growth White Paper / LEPs
•Localism Bill
•Ongoing challenges

3. Some Theory
• O’Brien (1992) – the ‘end of geography’
• Cairncross (1997) – the ‘death of distance’
• Thomas Friedman (2005) – the ‘World is Flat’
• Krugman et al – NEG & agglomeration
• World Bank Development Report (2009): distance,
density and difference
• Challenged by the OECD and the European Union

7. McCann (2010)

13. Headline GVA NUTS3
18 000
16 000
14 000
12 000
Hartlepool and Stockton-on-Tees
South Teesside
10 000 Darlington
Durham CC
8 000 Northumberland
Tyneside
Sunderland
6 000
4 000
2 000
0
199 5
199 6
199 7
199 8
199 9
200 0
200 1
200 2
200 3
200 4
200 5
200 6
200 7
200 8

14. GVA per capita index
110.0
100.0
90.0
Hartlepool and Stockton-on-Tees
Durham CC
80.0
Northumberland
Tyneside
70.0
60.0
50.0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

15. Headline GVA NUTS 3
200 000
180 000
160 000
140 000
120 000
Inner London
100 000
Tyneside
80 000
60 000
40 000
20 000
0
199 5
199 6
199 7
199 8
199 9
200 0
200 1
200 2
200 3
200 4
200 5
200 6
200 7
200 8

23. OECD Review of Newcastle in the North East
• The reality is that not all communities will benefit equally from the
region’s growth…..it is for example clear that growth is coming form the
urban core of the region and this is likely to continue.
• The concentration of growth and related resources in the City of
Newcastle (and Tyne and Wear County) suggests that in building the
critical mass, the city region should strengthen the role of the urban core
as the growth centre in building the critical mass.
• A focus on high technology sectors suggests a spatial concentration of
development in the urban core of the region, with an accompanying
transport strategy so as to improve the connectivity in the region and
beyond, thereby enhancing the spatial mobility of the population
• [However] there is an ambivalence and lack of consensus in the region
about the role of Newcastle in the region’s future.
• Finally, as the strategy requires choices to be made as to where (and
where not) to put resource, a high degree of transparency in decision
making, and political support are required

24. OECD Review of Newcastle in the North East
• Central government is the dominant actor in regional
economic development
• Collective action and identity appears to be as much
rooted in localities and different cities within the region
than the regional level, with internal and inwards
looking divisions and animosities appearing to
dominate. The basic conditions for building a mode of
governance are therefore not strong
• There is, of course, no single best level for government
organisation anywhere. Nevertheless, there is evidence
from other OECD countries to suggest that governance
arrangements at a metropolitan or functional urban
level make sense for issues such as housing, transport,
economic development, culture, organisation of retail,
environment, universities, and land use planning

27. Localism or Renationalisation?
• Abolition of RDAs, Integrated Regional Strategies, Regional
Funding Allocations, Business Link, Primary Care Trusts,
Audit Commission, Regional Tourism, Government Offices
• ‘rebalancing’ of economy (by sector, place, public / private)
• New Forms of local finance: New Homes Bonus, Business
Rates Bonus, Tax Increment Financing
• But effective renationalisation of: Single Programme to
(national) Regional Growth Fund, venture capital, (e.g.
Jeremie), business support, tourism, inward investment,
international trade, sector policy, transport investments,
employment programmes, EU funding
• Local Enterprise Partnerships & Localism Bill

30. LEPS: An early critique
• Assessed by the centre against which criteria?
• ‘Functional economic areas’ or administrative
simplicity?
• Economic growth or sustainable development?
• Doing or thinking? Making difficult strategic choices?
• Accountable? To whom?
• No money, powers, functions, or hard status

31. Localism
• Directly (imposed) Elected Mayors
• Local referendums
• Neighbourhood Planning
• Devolution and reform of Tax Base to the
local level e.g. New Homes Bonus

32. Ongoing Challenges (National)
• Monetary policy: by definition global/ (inter) national; and effectively stalled
• Fiscal policy historically severe: no spatial element and/or Keynesian interventionism
• Unresolved reconciliation of neo-liberal supply side ‘people’ & firm economics with economic
importance and political transparency of ‘place’ economics
• Investing in places of growth and opportunity; or in places of need regardless of opportunity;
in places where people want growth or where growth is not wanted? Jobs to people? Or
people to jobs?
• Much local delivery through agents of national government (universities, colleges, highways,
Job Centre Plus, Skills Funding Agency etc) all driven by central demands; lacking legitimacy
to make difficult spatial decisions
• Departmentalism: what real traction from depleted departments of central government; of
CLG compared to HM Treasury, Cabinet Office, DWP.
• The continuing role of London

33. Ongoing Challenges (Local / Sub National)
• Enabler or direct actor?
• Dealing with huge cuts and Big Society / privatisation. Councils set free of red
tape? Over 140 proposals for new regulations, order making powers, duties,
statutory guidance and requirements on local authorities
• Dealing directly with central government – with far fewer intermediaries. As seen
from the centre – (variably) risk averse local government; of limited & reduced
capacity, leverage, freedoms and leadership(?) From grants to risked based
investment finance e.g. Tax Increment Financing?
• From fuzzy boundaries of city-regions to confused boundaries; what relationships
between Elected Mayors, LEPs, Police Commissioners, Transport Authorities, GP
Commissioning Consortia, Work Programme, EU Programmes – each with a
different boundary
• In absence of sub national spatial strategies, what future for cross boundary
working e.g. housing, transport etc
• Dealing with the inevitable spatial implications of (national) space neutral sector
policies. Will the private sector save us?