Columnist

Why local government is key to devolution success

England’s devolution journey has undoubtedly changed the way we think about economic growth.

Metro mayors have given regions a stronger national profile.

They have created visible leadership, strengthened relationships with the Government, championed investment and provided a clear voice for functional economic areas.

In many respects, they have been an important addition to England’s economic landscape.

But as the debate about devolution continues to evolve, I believe we are in danger of overlooking a more fundamental question: what drives growth?

Having worked in central Government, led a city council, served on the cabinet of a combined authority, led an economic development agency and now switched to run my own business, I have come to a simple conclusion.

Successful economies depend on capable institutions as much as they depend on investment.

Business understands this instinctively.

A company does not become more productive simply because it redraws its organisational chart.

New structures can create opportunities, but only if they are supported by capable leadership, clear purpose, effective relationships and organisations that know how to deliver.

Places are no different. Over the past decade, much of the focus has understandably been on creating new strategic institutions.

Combined authorities, metro mayors and devolved powers have all sought to improve coordination across housing, transport, skills and economic development.

These changes have brought genuine benefits.

Strategic leadership matters, particularly where labour markets, infrastructure and investment operate across local authority boundaries.

Regions need strong champions who can convene partners, build confidence and represent their areas nationally and internationally.

But strategy alone does not deliver growth.

Growth is ultimately realised through planning decisions, regeneration projects, business support, workforce development, housing delivery, environmental improvement and the countless interactions between public services, businesses and communities that shape confidence in a place. 

This work still happens overwhelmingly through local government.

Councils remain the institutions that understand local economies in detail.

They maintain relationships with employers, support town centres, deliver regeneration schemes, work alongside colleges and universities, manage planning systems and provide many of the conditions that allow businesses to invest with confidence.

In other words, they provide much of the operating environment in which economic growth takes place.

This is why I sometimes worry that we have become more interested in creating new governance structures than strengthening the institutions that already exist.

That is not an argument against devolution. Nor is it an argument against metro mayors.

The relationship should never be seen as a choice between one or the other; regional leadership and local government perform different functions.

Mayors provide strategic leadership across wider economic geographies; local government provides the day-to-day stewardship of place.

Successful places need both.

History offers powerful examples of what local government can achieve when it is expected to lead.

Birmingham, under Joseph Chamberlain, demonstrated how municipal ambition could transform infrastructure, public health and civic confidence.

Newcastle, despite the controversies that surround aspects of T. Dan Smith’s legacy, showed how local leadership could fundamentally reshape a city’s ambition and identity.

Manchester’s internationally recognised success was built over decades through determined civic leadership long before the creation of a metro mayor.

The lesson is not that we should recreate the past; it is that successful places have always depended upon capable institutions working together around a shared ambition.

As the Government continues to devolve powers and responsibilities, the next stage of the conversation should perhaps focus less on institutional architecture and more on institutional capability.

Businesses rarely invest because governance structures have changed.

They invest because they see confidence, competence, stable relationships, clear leadership and places capable of delivering on their ambitions.

That depends upon effective partnerships between the Government, regional institutions, local government, universities, businesses and the wider public sector.

It also depends on recognising local government is not simply another stakeholder within the system; it remains one of the foundations upon which successful local economies are built.

The challenge for the next phase of devolution is, therefore, not to create ever more institutions.

It is to ensure the institutions we already have are trusted, empowered and equipped to deliver.

Economic growth is not created by structures alone.

It is created by capable institutions working together, with a shared purpose and a long-term commitment to the places they serve.

Nick Kemp has more than 20 years' experience in economic strategy, business development, public affairs and strategic communications. A Fellow of the Royal Society for Arts, Manufactures and Commerce, his career spans senior roles in the public and private sectors, including leadership positions in public affairs and regional economic development advising FTSE 100 companies. 

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