1 December 2015 | By Ed Richardson Insight

Devolution: from discussion to delivery

Insight: Ed Richardson, tax and fiscal policy adviser, CBI

To unlock the potential of devolution, businesses must be active partners in designing growth plans.

Devolution is about giving local leaders the tools to maximise their area’s unique strengths and building on regional specialisations to improve the local business environment. And with deals agreed for Sheffield, the North East, Liverpool and the West Midlands – and the government promising that further announcements will follow the spending review – business stands ready to work with government and local leaders to drive centres of private sector growth across the country.

The test now is whether localities can move beyond planning and get behind the drive for growth sustainably – ensuring local people and businesses feel the benefits sooner rather than later.

Central government is right to play a quality assurance role by agreeing robust deals and clear performance measures for local areas. And to unlock the full potential, businesses must be active partners in designing growth plans. It is vital for local leaders to consult them if councils are to drive local innovation, investment and awareness of how new powers will be used.

Take the devolution of business rates, for example. If this spurs councils to take a pro-growth approach, then it has business’s backing. But this must not be a way to increase rates without the consent of the local business community.

Seizing the opportunities

Yet there are real opportunities to seize here in skills, infrastructure and housing if we get this right, which is why discussions need to move quickly from the abstract to focusing on specific ways in which devolution can help drive growth.

Tailoring local skills provision can help get more people into better-paid jobs by matching training courses with the specific needs of local employers. With the UK facing a skills shortage, tackling this from the ground up and increasing the availability of skilled staff in each region can support business growth and improve living standards across the country.

Giving local and business leaders more say over infrastructure projects in their areas can improve delivery. In Greater Manchester, for example, the tramline to Trafford Park is already in its final stages of planning just months after the devolution deal was agreed.

And new strategic planning powers for cities and counties can help to free up public sector land to build more homes, provide developers with the long-term stability to invest and align new housing projects with new infrastructure.

Sustained progress of this kind requires central and local government maintaining close relationships with the businesses they’re trying to help.