Why regional policy hasn't worked — and how we make sure that it does

The Chancellor's Autumn Statement announced the next set of Investment Zones and devolution deals — yet if we are to unlock the true potential of our regions (particularly the North), a consistent investment-led approach is needed that transcends short-term political cycles.

Here, our CEO Robert White offers his perspective on the UK's regional challenges — and explains why purpose-led organisations already have the answers to the questions that politicians have been asking themselves for decades...

Why hasn't regional policy worked?

The Autumn Statement announcement of devolution deals for Lancashire and Hull and East Yorkshire to establish Combined Authorities is a welcome move to furthering regional empowerment — helping to bring these regions’ devolved powers in-line with Greater Manchester, Liverpool City Region, Tees Valley, West Yorkshire and elsewhere.

Further devolution feels particularly necessary following the recent publication of Harvard Kennedy School's and King’s College London’s paper Why Hasn’t UK Regional Policy Worked, which offered up a diagnosis of the UK’s regional growth policy problem — the failure to develop an ambitious, holistic, long-term and cross-party response.

The overarching consensus of more than 90 contributors who led regional policy between 1979 and 2015 — which included Prime Ministers, Chancellors, Ministers, Mayors, local authority leaders and civil servants — was that, in the face of pressure to centralise power, policy instability, spending biases and short-termism has continued to leave many areas behind.

This is consistent with some of the challenges that we identify in our True North report, based on a series of conversations held across the region — in Lancashire, Leeds, Liverpool, Manchester and Sheffield. We need to learn these lessons and create a more collaborative, joined-up approach to regional policy, investment and devolution.

There now seems to be a recognition from central government of the need to devolve more powers more broadly. However, we support the need to go further and for purpose-led businesses that reach in to the communities they serve — and address challenges at a grassroots level — to grasp the opportunity to be part of the decision-making process.

We believe that the True North Network of purpose-led organisations can play its part in providing some of the answers to the questions raised in the paper. In developing our report, we found that many Northern-based organisations are delivering progress and unlocking growth and long-term change from the ground-up — not through policy dictated by central government.

Our aim is to create a network that inspires a new era of collaboration between these influential voices and purpose-led organisations — and scales their impact.

Defining Northern ambition and overcoming short-termism

One of the key findings of the Harvard and King’s paper was that past policies to grow the UK’s regional economies have historically gravitated towards London and the South East, lacking ambition in the North. It also found that there has been endemic short-termism that has damaged policy outcomes.

The assessment of interviewees in the paper was that there has been insufficient spend across the full suite of policy levers — skills, infrastructure, innovation, housing, public service reform and devolution.

Successful places have:

• high levels of employment, innovative firms and skilled work
• high quality and reliable transport
• thriving and attractive town centres and high streets, where people want to live.

If even one of those pieces is missing, it becomes a lot harder for a single area to thrive.

Achieving this success in the North requires a level of ambition and commitment that cannot come from Westminster, where too many decisions are made around short-term electoral cycles — leading to a ‘chop and change’ approach based on the government of the day. Decision making must be decentralised and come from those with a long-term stake in the region itself.

As King’s and Harvard conclude, sustained political will and leadership is necessary to overcome Whitehall's centralising tendencies and empower local government.

We need to transcend short-term political cycles in favour of a commitment to and investment in long-term change, which we believe can be achieved through four areas that require equal amounts of focus:

1. People, skills and the future — upskilling and reskilling talent to be equipped for the industries of the future and making sure that employment pathways are more accessible to those in harder to reach communities.
2. Innovation and change — deploying risk capital into entrepreneurial ideas, scalable ventures and innovative spin outs from our leading universities in sectors of strategic importance (such as AI, life sciences and advanced manufacturing).
3. Sustainable growth — recognising that businesses equipped for growth are those that have sustainable and ethical practices built into their business models, with the B Corp process a key tool to attracting investment.
4. Purpose and social impact — ensuring that individual citizens are actively engaged in urban development, and that renewal and devolution models move from a competitive process towards a holistic approach that enables local authorities to make decisions about how funding is spent.

The role of government

The Harvard and King’s paper identifies that there is strong cross-party support for the Combined Authority model in England — meaning that the institutional basis for regional growth is stronger than it has been for a long time. However, we believe there is a compelling need to build on the successes that Combined Authorities have achieved and go further.

If we are to move towards a long-term approach that transcends political cycles, there must be a consensus around what regional policy looks like. This requires addressing several contentious issues that the paper outlines.

Firstly, what are the most important policy levers for growth in the English regions and what is the right level for decision-making?

While we believe that it's at an enterprise and local level that the greatest change can be enacted, this cannot be done in a silo, completely detached from central government. Local authorities and businesses must be entrusted with the capital they need to deliver positive change and supported with the infrastructure that allows them to connect.

Therefore, the first (and perhaps most crucial) policy lever that central government can pull is around transport and other critical infrastructure. Enhancing connectivity between towns, rural areas and urban centres across the North would be transformative to the region’s economy, productivity and (ultimately) prosperity.

Advancing decentralisation and devolution

The next key questions that we need to answer are what devolution model provides the best framework to support future Northern prosperity and how do we fund a more decentralised government that balances equity with incentives?

There is no simple or single answer to this and each region needs to be considered on its own merits. While the Combined Authority approach has worked for many regions so far — and hopefully will deliver similar successes in East Yorkshire and Lancashire — what is clear is that devolution cannot be built on a competitive model, which sees the individual regions of the North competing for funding (and devolved powers).

As the paper points out, this has the potential to "incentivise a deficit mindset", where places stress their weaknesses to attract additional funding.

There needs to be a more holistic approach that sees investment spread more organically and equitably, not through a process of pitching to Whitehall.

We agree with the prognosis of Joanne Roney — the CEO of Manchester City Council — who says that there should be “a baseline fair funding on investment and infrastructure work that gets us up to an economically competitive baseline,” adding that this will lead to “the powers and the flexibilities to drive our own destinies.”

You can be part of the change

Through True North we have met with hundreds of public, private and third-sector organisations that operate across the region.

This includes those developing the skills of our young people and helping them into meaningful employment, entrepreneurs starting and scaling innovative businesses in the industries of the future, leaders in the decarbonisation of our industries and maintaining biodiversity to support sustainable growth and inspiring people who are making a direct impact in their communities and promoting social mobility.

We found that in these purpose-led organisations and individuals — our ‘Northern Stars’ — we already have the answers to the questions that politicians have been asking themselves for decades.

What's missing is a platform and network for these individual initiatives to come together and collaborate for shared and scaled impact.

This is what True North seeks to do.

You can join this network and be a part of the change.

As we head towards a General Election, there is a real opportunity and a pressing need to create an apolitical, multi-generational strategy that transcends short-term political cycles. One that unlocks the true economic potential of our regions — the North in particular — and moves away from the existing model that pits towns and cities against one another and detracts from a more holistic and equitable approach to growth.

Where the Harvard and King’s paper outlines a lack of consensus on the future devolution of power, we believe in a devolution model that moves away from pitting individual cities and regions against each other and moves towards one that distributes investment more equally.

We support a model that fosters the spirit of cross-regional collaboration and grasps the opportunity to build thriving super-investment zones with connected innovation districts and clustered specialisms that complement each other, rather than compete.

Purpose-led businesses should be trusted to work in collaborative partnerships with decentralised government, local authorities and other organisations to deliver positive change — with a view to driving sustainable regional prosperity and social impact in equal measure.