Tom Stratton (Chief of Staff) and Mark Lloyd (Head of Policy) explore what the RSA’s East Midlands Inclusive Growth Commission’s Interim Report has revealed about how local leaders can shape regional economies and what needs to change nationally to make devolution work.
The UK’s economy is at a crossroads. The ‘take back control’ tensions that underlay Brexit have not been resolved, and politicians are searching for a new economic model that can match up to an increasingly volatile domestic political and global economic backdrop. If the UK is to get back on track over the next decade, devolution will be part of the solution.
Done right, it can act as a petri dish for fresh approaches to boosting growth tailored to places, ensuring the benefits are widely felt. Our East Midlands Inclusive Growth Commission, launched in October 2024, exemplifies this fresh thinking.
However, making good on this opportunity will require imaginative leadership at the local level. And the UK’s ability to harness this opportunity also depends on several imminent decisions at the national level, including the choices made in the Comprehensive Spending Review next month, the publication of the government’s Industrial Strategy, and the scope of devolution settlements.
RSA intervention
We’re recommending an ambitious plan to deliver prosperity for communities across the region.
Successive governments have recognised the importance of tailoring industrial policy to local needs to unlock fairer, more widespread growth. New Labour created regional development agencies; the coalition government spearheaded a city deal revolution in the early 2010s. The 2017 Industrial Strategy identified ‘places’ as one of five foundations. Boris Johnson made ‘Levelling Up’ his defining domestic policy.
The current government lays claim to going further and faster than any of these previous attempts, by emphasising place in its Industrial Strategy Green Paper and handing out a raft of new powers through the English Devolution White Paper. How this process plays out will be central to the UK’s future prosperity.
In a sea of volatility, there are notable islands of consensus in the UK on some key issues that offer reasons to be optimistic. All major parties agree that economic growth is a priority. Most accept the need for fresh thinking on how we conceive of and stimulate that growth. And there is broad agreement that powers and funding should go to local areas as part of the solution.
This consensus begins to fracture when we ask how best to use the opportunity that devolution presents, but this can be turned to our advantage. Devolution creates a space to apply the Government’s test-and-learn approach to economic growth, providing local platforms for new leaders with fresh ideas to emerge.
A key piece of this puzzle is the growing number of Mayoral Combined Authorities across England that knit together several local authorities into a larger administrative entity. These bodies are large enough to take responsibility for strategic decisions on issues like education and transport, bringing them closer to the communities they affect.
Authorities in traditional city-regions like Greater Manchester and the West Midlands (anchored by Birmingham) are making progress, building integrated transport systems and spatial plans.
As more Mayoral Combined Authorities form, the model is shifting away from city-regions toward more complex geographies that lack a single economic centre. Some new authorities cover large rural areas; in others, most residents live outside cities. Some even include multiple cities.
So, how do we harness the opportunity devolution presents to shape economic strategies for these so-called ‘polycentric’ places? And in exploring this question, what broader lessons can we apply to the government’s industrial strategy and devolution agendas?
The new East Midlands Combined County Authority offers a way to explore both questions. Claire Ward, the Mayor of the East Midlands, has commissioned the RSA to run the East Midlands Inclusive Growth Commission. She tasked it with recommending how devolution to a non-typical economic geography can deliver truly inclusive growth for residents of the East Midlands.
We are applying our Prosperous Places approach. This combines economic, social and environmental analysis with deep stakeholder engagement to create a clear strategy rooted in the local context, with measurable goals.
The commission published its interim report in March. Four themes emerged with relevance beyond the East Midlands:
The commission is halfway through its work, but it has already revealed two insights for other regions and Central Government:
First, Local Growth Plans, as currently conceived, will not unlock economic potential or drive inclusive growth. An economic plan that focuses only on the eight ‘growth-driving’ sectors misses the mark for most people and wastes untapped potential.
Local leaders need to treat Local Growth Plans as a starting point, not the final step. They must go further – generating accessible jobs, building pathways into them, and addressing the social barriers holding people back.
Nationally, if the government wants local leaders to develop bold plans, it must create the conditions to do so. In our 2023 UK Urban Futures Commission report, we recommended a legal requirement to produce long-term Local Growth Plans. This would give authorities time and space for more rigorous planning.
However, the Government is not currently implementing the recommendation as envisaged. It has required new Mayoral Combined Authorities to draft Local Growth Plans under extremely tight deadlines to fit spending review timetables. These constraints will lead to thin, desk-based plans. Meanwhile, the industrial strategy’s narrow focus on eight sectors could distract, rather than support, many areas from seizing the opportunities devolution provides.
RSA Report
There is scope for cities to add economic dynamism, community cohesiveness and environmental redemption. The long-term dividends are enormous. This report sets out how we can go about unlocking our cities’ potential.
Second, as the Commission’s interim report highlights, the wide range of challenges and needs in places like the East Midlands means that executing an inclusive growth strategy is hard. Leaders cannot succeed if they have one hand tied behind their backs. The findings call for a flexible approach: powers and funding should be available from an à la carte menu to fit local needs as soon as plans are ready, not limited to a fixed menu and rigid timetable as is currently the case.
Breaking free of the current low-growth trap will require places across the UK to craft bold growth plans. But if a region such as the East Midlands is to unlock its full potential – and if place-based strategies are to succeed more broadly – Central Government must now make the right choices.
In the months ahead, the Commission will hone its focus and develop detailed recommendations. It will also consider how to fund them in a tight fiscal climate. We will use our convening power to bring in investors and test the emerging ideas.
We look forward to announcing more insights and recommendations coming out of the East Midlands Inclusive Growth Commission in the coming months.
To find out more about how you can support us to develop a plan for inclusive growth, please get in touch with our partnerships team.
