In recent years a common view has developed on both sides of the House of Commons that UK powers and resources for local growth policy are too centralised and that this must change.
The Conservative Government’s Levelling Up White Paper outlines that centralisation has meant local actors have ‘too rarely been empowered to design and deliver policies necessary to drive growth’, and a key pillar of their response is further ‘empowering decision-makers in local areas’.
The Labour Report of the Commission on the UK’s Future concludes there is a case for a ‘radical devolution of power’ and identifies the need to ‘empower Mayors, Combined Authorities and local government in new economic partnerships’.
Over recent years, Devolution Deals have begun this process in some parts of the country. The commencement of the UK Shared Prosperity Fund (UKSPF) is a next step in this process, with areas securing funding over a three year period, with few criteria constraining how they can use this. Whatever happens at the next general election, all signs seem to be that local growth policy and resourcing will be increasingly devolved to the local level.
The implications of this are that local and combined authorities need to switch mindsets when it comes to local growth policy development and evaluation.
For years, local growth policy has been forcibly responsive to national government agendas. Local strategies such as Strategic Economic Plans and European Structural and Investment Fund Plans were largely written (by Local Enterprise Partnerships) to align with the eligibility of the specific funding pots that were available. Local growth projects have been constrained in their design by the need to respond to competitive funding rounds of programmes that have been designed at a national level. Project level evaluations have been commissioned with a partial focus on demonstrating project successes, because this can assist with case-making to help secure the next round of funding from Government.
The Shared Prosperity Fund however has not required competitive bidding. It is not tied to rigid intervention types or eligibility criteria, and based on political messaging from both sides, there is some optimism that devolved funding for local growth activity will continue in this vein in the medium term. This changes the mindset that Local Government will need to take.
How do local and combined authorities seize the opportunity?
Devolution of greater powers and resources to local areas opens the door to more strategic and visionary leadership from local politicians and stakeholders.
This should be both complemented and grounded by officers who can develop an evidence base around what works for local growth.
The Levelling Up White Paper sets out a detailed evidence base around the drivers of local growth, with a focus on six capitals – physical, human, intangible, financial, social and institutional. Any local growth strategy will involve targeting investment under one or more of these capitals, in response to challenges and opportunities in local economies. However, there is no template or one-size-fits-all approach. Each area is unique, with different challenges and opportunities, and so leadership and vision are needed to forge policy and interventions taken forward.
Greater freedom to design local interventions based on local evidence, strategy and vision, as well as the flexibility to produce projects of sufficient scale and longevity to have an impact can enable new models and approaches to local growth to emerge across the UK. The importance of the grounding in robust evidence and building knowledge around what works though cannot be underestimated.
What is stopping local and combined authorities?
Resource constraints after years of budget cuts remain a key challenge for many local and combined authorities, constraining them in taking a more proactive lead in developing local growth policy.
The Levelling Up White Paper highlights the critical importance of strong local institutions to deliver local growth, but acknowledges that ‘in the UK, the depletion of civic institutions, including local government, has gone hand-in-hand with deteriorating economic and social performance’.
Over the last six months, Wavehill has been working for the Department for Levelling Up, Housing & Communities (DLUHC), leading national programme evaluations of the English European Regional Development Fund (ERDF) and the UK-wide Community Renewal Fund (CRF). From engaging with local and combined authorities, we know there is large variation in the current capacity for policy development and evaluation. Most authorities recognise the policy devolution shift described here; some of the combined authorities and larger unitary or upper-tier authorities are beginning to build up in-house research and evidence teams, however many others lack the resources to do so and remain on the back foot, responsive to the next Government announcement.
Capacity will continue to be a challenge, but it is crucial that this is built up, if devolution of local growth policy is to work. Without resourcing for effective policy development, intervention design and evaluation, there is a risk that large amounts of devolved funds are invested in the wrong things to tackle local needs and deliver poor value for money.
What should local and combined authorities do next?
The challenges and opportunities arising for local and combined authorities taking on a greater leadership role in local growth policy are numerous. Our recommendations here focus on the roles around research, evaluation and evidence that underpin high quality policy making.
1. Large or small, authorities need to have access to specialist research and evidence officers.
Understanding of the evidence base and what works is critical for development of local growth strategy and design of interventions, ongoing monitoring of activity and commissioning robust evaluation. That insight will be needed to support local politicians and leaders with translating their visions into appropriate strategies, policies and interventions.
There will be some more complex research and evidence activities, for example scoping out counterfactual impact evaluation approaches, where specialist skills are needed and the tasks will not be suited to more generalist officers in existing teams.
Authorities should consider the best way to meet this resource need. For larger authorities, in-house expertise might be viable; for smaller authorities, considering a shared resource across boundaries or establishing a call-off contract with an external contractor might be more appropriate.
2. Authorities should plan strategically for policy evaluation.
With greater flexibility in local growth policy also comes greater flexibility around how to evaluate investments. Not all interventions will warrant the same level of evaluation. There should be more careful consideration of where to focus evaluation resources, with considerations including: whether more robust experimental evaluation methods could be designed in, where mid-term evaluations would add value to improve delivery and impact of pilot projects, and where lighter touch reviews of more established interventions might be appropriate. It will be important that authorities are just as open to evaluations highlighting where an intervention has not worked as they are to ones that show where they do work.
This more considered approach can help authorities to focus their time and resource to where evaluation can add most value, and help ensure the learning that is generated is used most effectively.
3. Authorities should be committed to building the evidence base on what works in local growth policy.
Greater flexibility of local growth policy, as it is devolved to local areas, will come with a greater plurality of approaches. This offers opportunities for trialling different types of interventions in different places facing different challenges. With robust evaluation on what works, the UK can build a much stronger policy evidence base than currently exists.
A commitment by authorities to learn from other areas when they develop new interventions, to commission robust evaluations that capture the effects of local interventions, and to share the findings in an accessible way, can help with building this evidence base which will benefit all areas.
Wavehill is a company of over 30 skilled research and evaluation specialists spread across four locations in England and Wales. We regularly lead national programme evaluations for Government, however the core of our business is working closely with local and combined authorities on research and evaluation around economic and social development.
We are excited at the potential for what might be a new era of devolved local growth policy and we’re keen to work with local and combined authorities to make this successful. If you would like to discuss your authority’s approach to research and evaluation around local growth, please don’t hesitate to get in touch with us.
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