Renewal

Stronger local economies

Last Updated:
August 20, 2021
The Issues
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Devolution and regional government

Scotland, Wales and Northern Ireland all have different forms of devolved powers. Each of the devolved governments is seeking to expand its programmes for economic development activities, even though most economic powers are reserved to the Westminster government. Both Scotland and Wales have established national development banks to support their economic investment strategies. (See Stakeholder Banks.)

In England local authorities have some economic development powers but many argue that the geographic scale of government needs to be larger. Since the abolition of the Regional Development Agencies in 2010 semi-independent Local Economic Partnerships (LEPs) have been tasked with supporting business development, but these have widely criticised for inadequate powers, funding and democratic accountability.

Where they have been established, combined authorities and city mayors are developing economic strategies at the 'city region' level; all argue that they need more powers and greater resources to do this properly. Some have called for the creation of larger regions in England comparable to those generally found in other developed countries. But the issues of regional identity and democratic control remain a source of debate.

Community wealth building

'Community wealth building' is an approach to local economic development which seeks to retain as much wealth and economic activity as possible within a local area, and place local assets and democratic control in the hands of local people. It aims to promote more resilient local economies and local job creation.

Core to this idea is harnessing the spending power of local 'anchor' institutions, such as local authorities, hospitals and universities. By using their procurement budgets to buy wherever possible from local small and medium sized businesses, such institutions can support local economic and civic renewal and retain wealth and jobs within the community. At the same time the local authority can support the development and financing of such businesses.

Many community wealth building initiatives are particularly focused on socially-owned enterprises such as cooperatives and community businesses. The best-known application of the model in the UK is the city of Preston, where the city council has transformed local models of procurement and quadrupled the local spend of its anchor institutions.

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