Collaborative growth engines
As the Levelling Up White Paper stated, rankings for productivity in the UK have remained relatively unchanged for over 120 years. Geographic differences in productivity are long lived with a high degree of stickiness, and productivity varies substantially across and within regions.
The Government’s decision to call time on Local Enterprise Partnerships(LEPs) and transfer their functions to upper tier local authorities or combined authorities is just the latest of many efforts to solve that productivity puzzle.
LEPs were an attempt to reflect regional differences and bring private sector expertise into local economic decision making, encouraging collaboration at the level of functional economic areas. Their impact varied, reflecting the context they operated in and the success of individual partnerships. None were particularly helped by a decade when it was challenging to deliver local growth and the national agenda was uncertain.
The move to groupings of upper tier local authorities and combined authorities reflects a belief that Mayoral Combined Authorities and larger area LEPs have greater capacity and capability. Rebuilding local economic development teams, especially their analytical and foresight capabilities, and providing greater certainty and flexibility through long term devolution agreements and less fragmented funding pots would certainly help.
During the transition to the new arrangements, councils should ensure that the value of bringing together business, educators and other local agencies in multi-stakeholder partnerships does not get lost as the new models take shape. That central principle of collaboration to create a growth engine must remain but how that is achieved can be adjusted to the local context and industrial specialisms.
The simplest model might be to revert to local authority led economic development functions in traditional geographies and boundaries. For some places like Norfolk and Suffolk, this might work well. In places, such as Greater Manchester, creating business boards that can bring together interests working across a wider footprint might be the answer. In other areas this might be an opportunity to support independently financed LEPs to focus on specific opportunities, such as between places that are not geographic neighbours. Local economic growth can come from collaboration and connectivity between places as well as within them, such as between Freeports in Liverpool and Humber/Tees Valley or examples like Clean Growth UK helping connect business and higher education with hubs in Brighton, Portsmouth and Liverpool, supported by Research England’s Connecting Capabilities Fund.
Irrespective of the model, PA’s research on multi-stakeholder partnerships suggests there are a number of key actions required to create successful organisations. The first is to establish a shared vision and strategy, with space left for differences of ambition, culture and identity. The future arrangements must make it clear when and why partners are pulling together, as well as respecting individual identifies and cultures. Creating or refreshing the commitment to continue to act together is going to be as important as the activities themselves. Councils can be excellent at convening diverse audiences and will want to continue bringing different audiences together.
They will need to be clear about where responsibilities rest whilst empowering participants to focus on what the local economy needs not just what their parent organisation wants. This should be underpinned by a focus on behaviour over structure, recognising that the dynamics between senior sponsors and individuals are more influential than the institutional arrangements. Collaborative transformational leaders are more likely to succeed through the behaviours they encourage than any procedures they write. Some places might want to emulate the principles of the One City Approach in Bristol, with a city office funded by different partners coming together to create a convening space for everyone who wants to be involved and co-chairs of thematic groups.
The organisations should prepare for political shifts through adaptive design principles and patterns, meaning that when a change occurs the partnership adapts and strengthens, not weakens, because the relationships are resilient.
Ways of working should aim to secure the benefits of creative tension in accelerating the delivery of a shared vision and strategy. Councils know the drivers of local economic growth are complex and constructive challenge and experimentation should be encouraged to address these.
Leaders should explicitly prepare people for collaboration. Participants both within local government, relevant agencies and across the business community should have development support to build the skills, confidence, and capability to make the arrangements work.
Although the next six months will require a huge effort just to bring about an effective transition to new arrangements, the real challenge for councils will be to create the right partnership model for their area. Irrespective of the model, transferring responsibility into local government must be about improving effectiveness not just efficiencies. The financial benefit to the economy of locally responsive economic growth supported by stable, forward-looking partnerships will far outweigh any short-term savings. They might even, given time, finally solve our productivity puzzle.