Long-standing inequality between and within regions in the UK is holding back millions of households and acting as a drag on economic prosperity. This report purposes five major shifts in the old local economic development model if this divide is to be reduced. They include:
- A shift away from the central direction to local power and control. This should be underpinned by a radical shift of powers over the economic and social policy from Whitehall to town halls combined with strong local plans and the open participation of communities and local businesses in economic decision-making.
- A shift in focus from growth to living standards. Boosting disposable incomes and access to social infrastructure will have an immediate impact on people’s living standards. It will also help to stimulate local economies by increasing demand and improving labour supply, which will provide more confidence for firms to invest.
- A shift in focus from high-value-added sectors to the everyday economy that forms the backbone of local economies and generates the majority of jobs. Improving productivity, wages, and job creation in these foundational sectors will have a direct impact on the prospect of communities that have struggled to attract high-wage, high productivity firms.
- A shift in focus from large businesses to small and medium enterprises (SMEs) that form the bedrock of local economies. The vital role of SMEs in local economies is often overlooked despite their accounting for more than half of all private-sector jobs. Support for SMEs through access to affordable rents, finance, and tailored business advice will be key to strengthening local economies and creating jobs.
- A major shift to green. Without a concerted effort to link levelling up to net zero, this could result in the derailment of both agendas. From the point of view of levelling up, improvement in living standards will be only short-lived if is it built on the back of an energy-intensive industry that is likely to be stranded within a decade. The scale of investment that will be required to deliver net zero also creates a unique opportunity to invest in our communities to create jobs, boost industries, and remake places.