REGIONAL DEVELOPMENT
EU structural funds. Additional place- based fi nancial sweeteners – for instance, investment allowances and tax credits – could further support start-ups, scale-ups, exporters and R&D activity in disadvantaged parts of the country. Meanwhile, raising the capacity of the British Business Bank to improve access to funding – including loan, equity and angel fi nance – for small fi rms outside the “golden triangle” of London, Oxford and Cambridge would go a long way. The government should also be prepared to consider funding channels that are a little more outside the box. While the UK may have missed a trick in not placing its North Sea oil income into a sovereign wealth fund – Norway’s is worth about $1 trillion
– it could still explore the development of long-term economic investment funds. Retained revenues, public-sector pension funds or income from commercial public assets at a regional or national level could be used to develop nest eggs for future infrastructure spending.
The UK needs to consider how it can sweat its assets more. In this respect, the “urban wealth fund” concept might worth exploring. It would entail professionally managing and reinvesting the considerable income that local authorities receive from their public holdings. This could contribute towards a further goal: local fi nancial self-suffi ciency. This is crucial to giving
Quay performance: Hull’s digital business hub, C4DI, is a ‘cracking development’ for start-ups, according to the city council’s director of regeneration, Mark Jones
‘Over 40 per cent of IoD members would prioritise support for small businesses’
regions genuine control over their growth plans. Making it easier to issue debt and improving revenue-retention deals and local
investment funds would carry weight here. INVESTING WISELY
Business leaders have a few answers to the question of how local fi nancial autonomy might be exercised. More than 40 per cent of IoD members would prioritise support for small businesses. This refl ects quite poorly on the local enterprise partnerships that already exist to provide such backing. But these partnerships could yet be central to improving local productivity growth if they were to gain more resources, accountability and marketing capacity. About half of our members would also like their local area to have a long-term
skills strategy. While skills shortages are evident nationwide, there are notable regional variations. A recent Policy Voice (
iod.com/policyvoice) survey has found that members in Northern Ireland are particularly worried about a brain drain, while those in the north of England are most concerned about the region’s ageing population. This is a clear indication that policies to attract, develop and retain talent need to be tailored to local needs. A further devolution of skills powers could help to stem the annual fl ow of 100,000 or so graduates who soon leave the area where they studied to seek more suitable work, according to research by the WPI Strategy group. Allowing local stakeholders to decide jointly how to use the apprenticeship levy and any unspent contributions would also be benefi cial.
CONNECTIVITY CHALLENGES UK fi rms are deeply dissatisfi ed with the quality of their local infrastructure. This country ranks outside the global top 20 for road quality and rail effi ciency, while its broadband connectivity, measured by fi bre internet subscriptions, even lags that of several developing nations. Resolving the nation’s transport and digital connectivity challenges is essential to the process of “crowding in” parts of the country that are feeling left behind.
Transport bottlenecks need attention, while larger investments should focus on strengthening links between big cities and the ongoing nationwide roll-out of full-fi bre broadband. If it’s to enhance local talent retention, this infrastructure agenda must clearly also mesh with plans to improve the stock of affordable housing around the country.
Tying this all together is the need for regions to be able to champion their own initiatives. Access to funding for marketing campaigns and improved representation on trade missions offer two immediate ways to help them emerge from London’s shadow and move on to the international stage. So many IoD members have global aspirations for their enterprises. They need to see that the capital is not the only viable launchpad. This is a challenge that has long persisted, exacerbated by the short-termism with which it’s been tackled over the years. Only by changing that approach will we change the outcome.
Cultural escape? Every year about 100,000 UK graduates leave the area where they studied for their degrees in search of suitable work
46
director.co.uk
Visit
iod.com/regionalgrowth to read Tej Parikh’s full findings and recommendations in the policy report Connected Economies, People and Places
UNIVERSITY OF EDINBURGH. C4DI
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