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CBI calls for bespoke strategies for regions

The CBI has called for individual growth strategies to be implemented in each region, and cities should be a particular focus.

In its latest report, The UK’s growth landscape - Harnessing private sector potential across the country, the CBI says governments have been too preoccupied in closing the gap between the regions, rather than realising potential within them.

In an example from the research, private sector employment in Sunderland was shown to have grown almost three times faster than in the wider North-East between 1998-2008, prompting the CBI to call for this case-by-case approach.

The report sets out a number of ways in which the impact of Government incentives can be increased, including reducing the minimum bid threshold for the Regional Growth Fund to £500,000; giving preference to LEP bids that make funding to SMEs; and expanding the geographic footprints of Enterprise Zones.

John Cridland, CBI Director-General, said: “In the rebalancing of our economy, every part of Britain needs to grow, and it is harder the further we go from London for the private sector to pick up the slack left by a retreating public sector. In some parts of the country the public sector is simply too big and the private sector has much heavy lifting still to do.

“But we mustn’t just rely on the usual suspects – London and the South-East. It is possible, if the Government avoids a ‘one-size-fits-all’ approach to regional growth across the UK, and instead concentrates on boosting the private sector wherever pockets of potential are found in towns and cities within regions.

“Where there are advantages to local policymaking, the message from businesses to the Government is ‘be bolder’. Businesses want to see LEPs given statutory status, and incentivised to work together on strategic issues such as transport policy, foreign investment, economic analysis, innovation, and industrial policy. Not doing so risks fragmenting the existing business and economic landscape.”

Elsewhere, the report suggested bringing forward further Tax Incremental Financing (TIF 2) schemes in urban areas outside the core cities, to allow more local authorities to borrow against increased tax revenue generated by new infrastructure.

The CBI also backed plans for regional pay in the public sector, suggesting it would help make public services more efficient and would also help to “level the playing field for private sector pay across the UK.”

Mr Cridland added: “The scale of the challenge is considerable – Government expenditure and household consumption accounted for 89% of GDP in 2009. To move away from a dependence on debt and the public sector, it’s essential that the private sector can invest and export from all parts of the UK. While Government initiatives like the Regional Growth Fund, business rate retention, and Enterprise Zones are certainly welcomed by businesses, the incentives must be bigger and bolder.”

This was posted in Bdaily's Members' News section by Tom Keighley .