The government seems to view growth as something that is primarily delivered by cities and not counties. In doing so, ministers risk missing an opportunity and thereby creating a two-speed recovery
The Communities and Local Government select committee investigation into 'fiscal devolution to cities and city regions' is a sign that Whitehall thinking is catching up with the localist approach to growth that members of the County Councils Network have promoted for many years and as such it should be applauded.
The problem is captured in the title; the government’s narrow city focus does not reflect the UK’s economic realities and ignores the fact counties can make just as good, if not better, use of fiscal devolution.
By limiting the scope of the conversation to cities, the debate is ignoring the needs of our huge and dynamic county economies. County areas generate over half of all gross value added outside of London and CCN members have driven the sort of bold investment in high-skilled, high-tech industries that will ensure the UK’s prosperity in the years ahead.
By viewing growth as something delivered primarily by cities, the government ignores the lessons of places like Northamptonshire County Council, whose work with Silverstone created an international hub in high performance technology. It can do more.
The council has put forward a 10-point plan for growth, outlining how additional financial autonomy and fiscal devolution in areas such as skills and infrastructure could enable local partners to generate 70,000 new jobs and 80,000 more homes over the next 15 years.
Counties like Northamptonshire need the freedom to support innovation and local entrepreneurs and the flexibility to retain the benefits of growth if they are to continue boasting local economies and sustaining other vital services.
The consequences for areas excluded from these new powers are severe. Not only do we lose access to the full range of powers, we are also excluded from Whitehall funding streams and schemes like Youth Contracts, placing our young people at a disadvantage.
We desperately need sustainable national growth but by gifting further powers to cities and not counties we are potentially entrenching a two-speed recovery. Why should a local politician in a city area be able to do more to create jobs for their community than one in a county?
We are not asking for a zero-sum redistribution of resources from cities to counties, nor simply a hand out from government. Tools like Revolving Investment Funds create long-term self-sustaining sources of local finance for counties to invest in local communities.
County councils are working through local enterprise partnerships to drive strategic growth, but the sort of fiscal devolution under discussion requires strong governance that only counties can provide.
With ambitious growth deals suited to the needs of CCN members, counties will be able to ensure the UK’s economic heartlands can compete internationally over the long term. Without them, the government risk tying the hands of those with the strategic vision to ensure the whole UK can grow.
David Hodge is chair of the County Councils Network
