Wed, 23 Oct 2019
The Government must publish a framework to devolve powers and reignite the regions says the Confederation of British Industry (CBI) in a report.
The business lobby group says this will help address the productivity puzzle and will help close the gap on regional inequalities.
The CBI believes this will “ignite a new era of economic prosperity”.
Devolution across England has stalled over recent years.
Building upon recent momentum including speeches by the Prime Minister concerning the need to ‘level up’ places across the UK, the CBI has outlined three steps needed to kickstart devolution and maximise the potential of all English regions.
Despite some attempts, the UK’s productivity puzzle remains and tackling it requires bold and sustained action.
The UK lags international competitors when it comes to productivity, with output per hour in Q2 2019 just 1.3 per cent higher than it was in Q4 2007.
Stagnating productivity in the South East is estimated to cost private sector workers on average £5,000 in lost income every year.
CBI research published in 2017 showed that closing the productivity gap between the highest and lowest performing parts of a region and replicating this across each region of the UK could add more than £200bn to the economy in the next decade.
Devolution allows key decisions relating to productivity to be made closer to the places they affect, and if done right could support unlocking regional growth.
CBI recommendations include removing politics from decision making by establishing an independent board to assess proposed devolution deals and simplifying boundaries between combined authorities and local enterprise partnerships.
The CBI report was released last week after the Chancellor announced at the Conservative Party conference that the Government will bring forward a new White Paper on English devolution in the months ahead.
The CBI hopes that its report will kick-start a national conversation, with business at its heart, on the future of devolution.
CBI regional director for the South East and Thames Valley Malcolm Hyde said: “Now is time to work with business to set out plans to devolve powers and unlock regional growth.
“Within five years, 60 per cent of the population should be covered by a devolution deal.
“This change will turbo charge our economy and will ignite a new era of economic prosperity in the South East and Thames Valley.
“Business is keen to unlock growth but wants to avoid future deals being influenced by politics.
“A clear framework where deals are assessed by an impartial independent board is sorely needed.
“I believe it is time the Prime Minister harnesses devolution and runs with it.
“If he does, the CBI will support him every step of the way.
“Everyone knows that productivity is a key driver of wage growth and living standards, so addressing it must be a priority, from Whitehall to town halls.
“We encourage government to work with the business community to reduce local government complexity and kicking the politics out of decisions on devolution.”