With two new devolution deals in the North East and Tees Valley signed just three days ago, this is a great time for local people and businesses to influence the direction of their local area and economy.
The Northern Powerhouse is a central part of our One Nation government’s plan to rebalance our economy. If the Northern Powerhouse was a country, it would be the 9th most economically significant in Europe.
Devolution can give voters, civic leaders and businesses power over the decisions which affect them and which shape their local environment.
The overwhelming focus of this government is driving up economic growth. In July, we launched the Productivity Plan to reverse the UK’s long-term productivity problem, secure higher living standards and a better quality of life for our citizens. We are cutting corporation tax to the lowest rates of any major economy in the world, and asking in return that businesses continue to do more to train their employees and pay higher wages.
Growth driven by devolution is central to this agenda, which will only be successful with the engagement and support of the business community. Businessmen and women know what changes are required in their communities in order to improve competitiveness, and businesses are excellently placed to influence local investment decisions.
Business-led Local Enterprise Partnerships (LEPs) already work with their local partners to set the strategic direction for around £18 billion of domestic and EU funding. This includes a £12 billion Local Growth Fund which is specifically designed to enable LEPs to deliver the key projects outlined in their Strategic Economic Plans. The Black Country LEP has secured £162 million which they propose using to target key transport priorities including Junction 10 of the M6, housing developments, skills provision in key sectors for their local economy, and a Science & Technology prototype centre.
Enterprise Zones have also been a success story, attracting 19,000 jobs and £2.2billion of private sector investment – but we’re planning to go further. We’ve already received over 50 applications to become one of the new Enterprise Zones, which will see local areas benefiting from keeping 100 per cent of the growth in their local business rates for 25 years, as well as new businesses in those areas receiving business rate discounts
LEPs will continue to have a critical role in shaping and implementing devolution deals. Of the 38 devolution proposals received so far, by far the strongest are those which have the clear support of their local business community.
The Chancellor's announcement that local government will keep 100% of business rates is a great incentive for local authorities to provide the best possible environment in which enterprises can thrive.
Those places which agree a devolution deal with the government which includes a metro mayor will, with the agreement of the LEP, also be in a position to add a precept to the rates to pay for new infrastructure and build for their cities’ future.
Devolution deals are about power: taking power from Whitehall and returning it to communities. Many governments have talked about this, but none till now have made it real, too frightened of the possible consequences: “What if a community chooses something we [meaning Westminster] wouldn’t choose for them?” Quite: that’s exactly the point.
Places in control of their health and social care, places in control of their enterprise economies, business-thinking hard-wired into local economic plans: this is the devolved future of the country. One Nation where no-one and no place is left behind.
The partnership between the private and public sector has historically been undervalued, but I’d encourage all businesses to ensure that they are actively shaping their own LEP’s contribution to devolution deals, and encourage all businesses to ensure that they are supporting LEPs to evolve and to continue to play a vital role in maximising local economic growth. This is an opportunity neither of us should fail to grasp.