Our new policy paper, Devolution in England - the business plan, flags up the initial views of manufacturers on the devolution debate in England and what they feel must change.
The view of business is important as part of this debate
Private sector firms are the ones who will pay the taxes, create the jobs and provide the economic growth that will deliver the ultimate outcomes of devolution in England – higher living standards and lower public sector expenditure through higher levels of productivity.
Despite this, businesses have had little input into what the priorities for devolution in England should be
This is a result of the speed at which devolution decisions are being taken, which has left little time for business engagement by local decision makers. This is something we’ve flagged up before.
Without good business engagement, local authorities risk negotiating deals with government on the basis of an incomplete conversation
Previous EEF surveys have shown structures such as Local Enterprise Partnerships have not had enough time to undertake detailed business engagement, with notably smaller businesses being less engaged as part of the process.
As part of our report we spoke with manufacturers right across England asking them how they would describe their relationship with their local authority. Most describe that relationship as non-existent.
The existing levels of engagement between businesses and local authorities is not a strong foundation on which to build devolution deals
Manufacturers have raised concerns about:
- The capability for local areas to take on more powers.
- That devolution without business engagement could lead to higher costs and duplication of services.
- Based on past experiences, they also feel that local authorities are more prone to short term policy decisions at the local level, undermining the stable business environment needed for investment.
Manufacturers would like to see a down payment on investment in transport as a first step
Manufacturers believe that local authorities should prioritise the devolution of transport in their negotiations with government. Transport investment powers will boost productivity, deliver financial returns and support the rebuilding of trust with local businesses.
In other areas the devolution of policy and responsibility is less widely supported at the moment. Manufacturers believe the case is not as yet proven for devolution in areas such as innovation support, export support and control and delivery of apprenticeship funding.
If businesses are feeling excluded now, they could be excluded even more in the future
With powers for economic development being transferred to combined authorities and metro mayors away from LEPs, the views of local businesses could be diminished even further in the future.
Businesses must be able to input into policy decisions at the local level. Even more so given that mayoral combined authorities look set to be given the power to raise taxes on business property without a referendum of businesses, which is currently the requirement.
We’ll be blogging later this week on how the Cities and Local Government Devolution Bill could be amended to continue to support the fostering of a stronger relationship between businesses and local decision makers.