Press Story

Ed Cox, Director, said: "The fund is welcome news for businesses and communities in the North of England. Following the recent announcements about Sheffield Forgemasters and Tees Valley hospital and the significant cuts to regeneration funding this new fund offers some light relief and a small sense that government recognises the scale of the challenge to enable economic recovery in the North."

But the think tank warns that the relationship between the private sector and public sector is a complex one. Ed Cox said: "To suggest that the private sector will simply grow to fill the void left by a shrinking public sector is too simplistic. Rebalancng the economy will not be achieved by taking an axe to public services and then sprinkling one or two seeds on the stony ground that is left. Instead there needs to be a careful conversation between the public and private sectors, not least about how public sector dependency can drive private sector innovation."

It is in this regard that ippr north has also welcomed some further details about Local Enterprise Partnerships. Ed Cox said: "Giving local authorities and business leaders powers over planning, housing and transport will give them new opportunities to demonstrate their ability to work together for the wider interests of their sub-regions, but there will be concerns though at the number of powers which are being re-nationalised."

"While there is some strong rhetoric about localism, to nationalise inward investment and innovation functions as well as sector leadership and business support would seem to be moves in the wrong direction. The fact that the Regional Growth Fund itself will be decided through a competitive bidding process organised nationally will also give cause for concern."

Ultimately, if government is really serious about local and regional economic development it will have to take measures for much greater fiscal decentralisation to provide greater incentives to local authorities to drive business growth. Tax Increment Financing (TIFs), Accelerated Development Zones (ADZs) and the relocalisation of business rates would be a significant start and we hope they are given serious consideration in the forthcoming White Papers and Bills due later this year.

Contact:

Tamsin Crimmens, Media and Events Officer: 0191 233 9051 / 07800 742 262 / t.crimmens@ippr.org