English devolution: How city-region mayors and industrial policy deliver local and national growth

Abstract

The newly elected UK Labour Government has acknowledged the importance of devolution and combined authorities to its industrial strategy and growth agenda. The initial signals appear promising. Ministers reiterate that powers and resources will be directed towards improving growth and the productive capacity of sub-regional economies as a central element of Labour’s growth ‘mission’. Yet there is considerable uncertainty about the long-term direction of the new government’s industrial policy, while the role of city-region mayors in industrial strategy is not yet well established. Despite the rhetoric about the role of mayors, there are tensions as well as scepticism in Whitehall about the capacity of combined authorities to deliver for local economies. Industrial policy is traditionally perceived as a national project with sectoral priorities and centrally driven interventions that can, in this case, achieve the ‘mission’ of making the UK the fastest growing G7 economy by the end of the Parliament. Historically, place has not been an integral feature of industrial policy. Nevertheless, it is clear that Whitehall lacks the capability to oversee industrial policy from the centre. There is a risk that in the laser-like focus on growth, combined authorities are treated as agents to be managed and UK spatial inequalities (already among the worst in the Organisation for Economic Co-operation and Development [OECD] countries) get worse. In this paper, we make the case that devolved authorities and mayors should be the main agents of industrial policy, working in partnership with government. This is because the fruits of industrial policy are deeply rooted in communities in the form of employment and skills and if new more productive companies are to invest, existing clusters mature and further employment be created, that will require sub-regional commitment and leadership.