Give local leaders the power to spend EU regeneration money – Jonathan Werran

IT is not enough to say we are living through extraordinary times. Lewis Carroll’s imagination would have nothing on the daily diet of impossible things we have to believe before breakfast during the looking glass world which the Brexit process has become.

How can more decision-making be devolved to cities like Leeds after Brexit?
How can more decision-making be devolved to cities like Leeds after Brexit?

Next week’s divisive and, in many quarters, deeply unwanted elections to the European Parliament to elect MEPs to a chamber where they may never have the chance to sit is just another chapter in our seemingly neverending story.

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If the original vote for Brexit was fuelled and fanned by a sense of dissatisfaction with remote political elites unconcerned with local economies and communities, there is one plot twist crucial for our regional prosperity that will need to be unravelled.

Jonathan Werran is chief executive of Localis.

No matter whether we stick or twist, we need to keep close watch on how we distribute funds crucial to prosperity that were previously directed by the EU Investment Bank (EIB) and schemes such as the European Regional Development and Social Fund.

The Government has pledged that a Shared Prosperity Fund will ensure that no part of the country will lose out from this structural funding – until 2020 at least.

However, where does this leave us in the future? A point made by Brexit ministers has been that since the UK put in twice as much into the EU as it got back there’s a case for making whatever replaces the Shared Prosperity Fund a bigger and more generous container.

Then comes the crucial question of not just how big a pot, but who controls it and how it is to be shared across Yorkshire and other parts of the UK? If Brexit has taught us anything, it is that democratic accountability and people’s sense of closeness to power cannot be readily ignored.

Yorkshire cities, like Leeds, need a greater say, argues the Localis think-tank, when it comes to the distribution of regeneration funds.

It could be considered a betrayal not just for those who voted for Leave, but indeed for everyone who has been forced to suffer through the Brexit water torture of the last three years, if vital investment decisions affecting our daily lives were merely to be passed on from supranational control in Brussels to Westminster and Whitehall.

If there are to be any Brexit dividends, one such would have to be seizing the opportunity to build a better form of investment programme that will support devolution programmes in Yorkshire – and elsewhere – to rebalance a national economy that remains too weighted upon London and the South East.

Earlier this week, Sir John Armitt expressed his wish that the Government’s infrastructure strategy should be long-term, come with firm funding and a genuine commitment to change.

In similar vein, yesterday Localis issued Hitting Reset, a report calling for a radical change to our political economy to empower local leaders to direct investment to where it is needed.

We are proposing that a British Investment Bank should be established as an agent capable of delivering greater benefits than the EIB and the current Whitehall handout system. The opportunity is there to develop a system that moves the UK away from very targeted initiatives, where investment centres on the improvement of transport links to London, or a never-ending succession of bidding for pots.

We propose that responsibility should be vested not in Whitehall but jointly among local leaders – at the level of strategic local authority or combined authority – alongside Local Enterprise Partnerships.

To avoid falling into the pitfalls that have led much of the UK into underdevelopment, it is important that local government be given autonomy in decisions on when and what to apply for. It is likely that investment loans will be sometimes better targeted at greater scale, in which case it should be the role of local authorities and LEPs working in collaboration to apply for and secure investment.

Historically the Treasury has been fiercely opposed to any mechanism that might load the national balance sheet with more debt.

We propose that the 2070 Commission, chaired by former Sheffield City Council chief executive Lord Kerslake and tasked with investigating regional inequality, should examine how such a bank could avoid a conflict with public sector debt through either open market borrowing or reformulating debt calculations.

At the end of this lost decade, a sense of alienation from national politics culminated in the Brexit vote. This has given rise to a political imperative to, on the one hand, raise productivity and, on the other, ensure that gains are felt immediately across the country.

This does not need to degenerate into further polarity, pitting towns against city, leavers versus remainers, metro versus retro. Economies are developed by improving the connections between places and playing to inherent strengths. This is the essence of decentralisation and leadership of place. We argue unapologetically for a reset.

Jonathan Werran is chief executive of the think-tank Localis which has published a new report entitled ‘Hitting Reset – a case for local leadership’.