2 Dec 2014

This is a guest post by David Bailey, following the 2014 RSA Winter Conference. Professor David Bailey works at the Aston Business School. He has written extensively on economic restructuring and industrial and regional policy, especially in relation to manufacturing and the auto industry. He has been a regular commentator, columnist and blogger for a range of media outlets. He was Chair of the Regional Studies Association over 2006-12 and is now an Honorary Vice-Chair, and an Editor of the Association’s flagship journal Regional Studies. Tweet him @dgbailey

As many readers will be aware, the formation of a coalition government in 2010 marked an abrupt change in English regional development policy. The key feature of this policy shift was the abolition of the English Regional Development Agencies (RDAs) - with the exception of that in London.

In their place ‘Local Enterprise Partnerships’ (LEPs) emerged operating at the sub-regional scale. In the West Midlands, for example, the RDA has been replaced with six LEPs.

Despite this language of ‘localism’, many of the powers held by English RDAs, for example, on industrial policy, inward investment, business support and other policy areas were initially recentralised to London. Moreover, unlike RDAs, LEPs have had to operate without significant dedicated budgets until recently.

Another critical issue has emerged around how better cooperation between LEPs can be encouraged, and how stronger LEPs can be incentivised to cooperate with weaker LEPs. The need for joint LEP working can also be evidenced in the need to develop regional data and intelligence, as for example happened with the ‘old’ West Midlands Regional Taskforce.

Overall, I’d still argue that the old RDAs were often better positioned to make judgements about how best to offer support and to which clusters (and/or sectors) as they had a superior information base than central governments.

Indeed, a key lesson of our work studying regional responses to the last recession in a recent issue of Regional Studies (which can be read open access here) is that there remains a role for regional level coordination of local (LEP) economic and cluster strategies, most obviously via some sort of intermediate tier infrastructure.   

So news that the West Midlands has got its act together and will create a Combined Authority, Manchester style, to drive the devolution of new powers and resources, has to be welcomed.  

But, crucially, this is reinforced by news that local LEPs will join together to create a ‘Super LEP’ for the region that reflects that of the Combined Authority and could cover a population of over 3 million people. It could get us back to somewhere near where we were in 2009 before the RDAs were dismantled and we had some effective regional ‘join up’.

The hope is that the Combined Authority and Super LEP can together become the “linchpin” for economic recovery. That might sound a bit over-hyped but given that the West Midlands region really is getting on with the heavy lifting of increasing output, exporting and creating jobs, the council and business leaders backing the idea actually have a pretty good point.

On the combined authority, what this means is that council leaders from the four Black Country councils and Birmingham have made an agreement in principle to work together in a move which could pull in significant investment to create jobs and improve transport links.

Interestingly, this ‘Black Country Four plus Brum’ Combo have invited Solihull and Coventry, plus other neighbouring councils, to join the discussions, with the goal of building a “broad and deep coalition for prosperity” for the region. It could be a ‘Super Combined Authority’.

The move comes as the three main political parties have competed to offer more funding and powers to cities and regions that form Combined Authorities. The announcements over a Combined Authority and matching Super LEP means that the West Midlands will – finally - be able to take advantage of that opportunity along with other cities.

It’s a much needed move. As I’ve noted in previous Regional Studies blog posts, so far all the Combined Authority action had been happening up North and the West Midlands was in serious danger of missing out on devolution.

This is all became hugely pressing for the region after the recent report of the City Growth Commission. It nominated the existing five Northern combined authorities as the first city regions to have devolved powers, thus leaving out the West Midlands.

That in turn led to Sandwell leader Darren Cooper boldly throwing down the gauntlet to Birmingham in a ‘put up or shut up’ move. He managed to bang heads together to finally make a combined authority a real goer.

So we should congratulate the local authority leaders who have made this happen. What’s also impressive is that if Solihull and Coventry do join then that could create a ‘Super Combined Authority’ that really would make economic sense.

That’s critical as - at some point - a genuinely regional scale will have to be back on the agenda to join up the work of fragmented LEPs in the region. When it does, the lessons from the ‘old’ RDAs, both positive and negative, will need to be remembered.

Effective devolution needs an ability to join things up, to ‘think regionally’, and to have real control over policy areas like transport, regional economic development, health and welfare, the environment and tourism.  A West Midlands Super LEP and ‘Super Combo’ could start to do just that.

Whether or not the city region really needs a ‘Metro Mayor’ is another matter, though. Chancellor George Osborne, who has reportedly opened talks with the region over a possible devolution of powers and resources, has dropped heavy hints that he wants to see a West Midlands Metro Mayor as part of the package.

That may not be to the liking of the new Combined Authority who so far have opted for a more collaborative form of leadership than an elected Metro-Mayor, with an envisaged executive board made up of local council leaders, LEP Chairs, and possibly representatives of voluntary groups and unions.

If Osborne really does believe in devolution, he should let the Combined Authority choose the model that it thinks will best work locally, rather than imposing a ‘Metro Mayor’ from above.