Levelling Up White Paper – An Industrial Strategy and all the better for it

Chris Hearld, KPMG’s Head of Regions, responds to the Levelling Up White Paper:

“From R&D and skills to digital connectivity, the levelling white paper encompasses an industrial strategy under a different name and is all the better for it. Business issues dominate the 12 levelling up missions as the government aims to boost productivity and wellbeing across the UK. The country’s business leaders will be looking at what support, encouragement and certainty they can call on, in their own missions to create further employment and prosperity in the places they are based.”

R&D spending and innovation

“Increasing the share of publicly funded R&D to be spent outside of the South East is a significant commitment as it’s key to driving innovation and higher skilled job opportunities into areas where they are currently lacking. Innovation accelerators in Glasgow, Manchester and the West Midlands can be expected to strengthen the hand of entrepreneurs seeking investment. Our research shows VC investment is increasingly flowing into the regions, to the tune of £8.1bn last year. Innovative, fast growth businesses will be looking for detail on how this funding will enhance regional ecosystems to better support them.”

Skills

“Skills is one of the most pressing concerns to employers across the country. Through devolution and the increase in Local Skills Improvement Plans businesses can play a more active part in the influencing and development of skills planning in their local labour market. Feedback in the areas with existing devolution deals suggests closer relationships between policymakers, training providers, businesses and the workforce can improve the skills landscape though it is admittedly only part of the response to our economy’s skills challenge. Beyond devolution The Skills Mission and Future Skills Unit, focusing on equipping the high growth areas of our economy, such as low carbon and technology, with the skills they need to thrive is crucial. It is to be hoped this feeds into regional plans.”

Devolution

“Devolution must be the engine of levelling up, so the commitment to a vast increase in devolution deals, Mayors, devolved funding and an extension of powers is a definite opportunity.  Mayors have shown they can provide the leadership business seeks for the places in which they invest. They are also able to bring together business and policy makers to make better informed decisions about issues that impact the ability of companies to create employment opportunities in regional economies.

“Of course, it needs to be true regional decision making, delivering on regionally agreed strategies, in the context of regional accountability, as opposed to a regime of bidding for budget to deploy centrally defined solutions. Parts of this country still need robust regional leadership, with vision and autonomy in order to achieve the transformation dramatic productivity and prosperity gains will require.”

Infrastructure

“Businesses placing bets on where to invest will be looking for details of the country’s 20 towns and cities set for regeneration through the Brownfield Fund beyond Wolverhampton and Sheffield. If meaningful change is wrought by the public sector spend, it will be leveraged by private sector money. Towns could play an increasingly important role due to the growth in more flexible work practices, so it’s right that they should benefit from the focus on renewal.

“Given the dependence of business on digital networks, the mission relating to broadband and 4 and 5G will be welcomed by business leaders. Many places have both while other businesses, undergoing their own digital transformation, are being held back by the soft infrastructure around them. This is one area where the 2030 timeline is simply too far away. 

“However the Integrated Rail Plan last year downgraded rail investment, including Northern Powerhouse Rail. This has created some doubt about the level of government commitment to infrastructure upgrading which may make it hard to win over some business leaders in the North. All tiers of government will have to work harder and smarter to deliver on infrastructure ambitions.”