Revamped UK Regional Policy: National Projects and Local Execution Strategies
In a recent article, professors Adrian Pabst and Luca Pieri have highlighted the challenges facing Britain's regional economies and the need for a more decentralized approach to economic development.
The authors find that Britain's central government remains overcentralized and ineffective, with decision-making powers and fiscal resources concentrated in Westminster and Whitehall. This centralization has contributed to increased disparities of income, wealth, and health within regions and between the rest of the country and London and the metropolitan parts of the South East.
The authors emphasize the importance of the interaction of public and private investment and the institutional capacity to design and deliver well-tailored investment projects. They argue that Mayoral Strategic Authorities (MSAs), which are being extended across the country, should act as boundary spanners between central and local levels, leveraging their unique positions to align business support, skills provision, access to finance, innovation, and productivity.
The UK has a specific productivity problem, with most second-tier cities like Birmingham, Leeds, Newcastle, Cardiff, Belfast, and Glasgow doing worse than their comparator cities in continental Europe. Cities and metro-areas such as Manchester have done better than towns, rural, and coastal areas. The challenge, according to the authors, is to align genuine bottom-up innovation, priority setting, and public service reform with the government's national missions.
The UK government aims to reduce regional inequalities that have worsened since the 2008-09 financial crisis, and have been further exacerbated by Covid and inflation in 2022-23. The December 2024 English Devolution White Paper states that the UK has more regional inequality, slower wage growth, and a relative decline in living standards compared to other developed countries.
The authors question whether MSAs prioritize the creation of knowledge that can be exploited internationally or focus on the supply and demand of skills immediately. They also highlight the need for MSAs to align with the government's national missions, such as the productivity, trade, and regional economies missions.
The heads of the mission boards related to the development of investment zones include Diemer, Rosen, and Guay. However, the authors argue that mission boards in the UK government have failed to change policy design and delivery.
Weak economic growth and a slow recovery of living standards since Covid make regional regeneration even harder. The authors suggest that MSAs need to prioritize areas of strength with above-average productivity or seek to catalyze new, potentially high-growth areas by leveraging research and frontier technologies.
In conclusion, the authors argue that a more decentralized approach to economic development is needed to address Britain's regional inequalities. MSAs, if given greater decision-making powers and fiscal resources, can help develop and deliver local and regional growth plans that align with the national growth mission. However, it is crucial that they prioritize the right areas and align with the government's national missions to ensure sustainable and inclusive growth across the country.
Read also:
- Rising state pension ages disproportionately impact a particular demographic, raising questions about the necessity of extending working years.
- Increase in mortality among seniors due to falls
- Councilmember Mai Vang unveils intentions to contest Doris Matsui for the Congress seat in Sacramento
- Inquiries Frequently Encountered
