Public Services Lab Blog

How councils can make their economy grow

Katy Rutherford - 28.11.2012

What is the best way to solve the crisis facing the UK economy and encourage growth?

If you were at the CBI conference last week, you'd probably think that the answers lie solely in central government policy and investment, and private sector growth.  You would have heard the Prime Minister call for "buccaneering, deal-making, hungry spirit"; policy reform, cuts to red tape, and infrastructure investment.  You would also have heard him talk about streamlining consultation, culture change and helping people to thrive.

But you wouldn't have heard him use the words "council" or "local authority".

If you'd travelled a mile or two east to Plough Place, you'd have found quite a different focus.  A group of enthusiastic, committed local government officers who had come together with Nesta as part of a series of learning exchanges we've run with IPPR North under the banner of Creative Councils, to talk about the role of local government in stimulating growth.

At the event we heard from two fantastic examples of local authority-led innovations designed to support business development, stimulate the economy and create jobs.

For example, Stoke City Council is pushing the boundaries of localism by creating its own energy company to recycle the energy generated by local industry.  This will provide a secure and stable supply for businesses in the city, protecting them and their 20,000 employees from potentially destabilising national fluctuations in energy prices.

Meanwhile, Westminster City Council has supported the development of the HUB Westminster, an affordable space in the heart of London for social businesses to work, collaborate, and access business support and investment.

We also heard from two brilliant social enterprises who want to build closer links to local authorities to help their ventures grow.  Franchising Works supports unemployed people into sustainable work by helping them to access franchising opportunities, while Fusion 21 links up different organisations procuring capital works to reduce procurement costs and create job opportunities, using any surplus generated to deliver local training and employment programmes. 

Across all these examples, and through our discussions as a group, a consensus emerged about the importance of councils to the growth agenda.  Why?

Firstly, because councils have a unique ability to understand and shape services to local circumstances and needs.  Business regulation, street cleaning, community safety and planning are all critical to creating a business-friendly environment, and all lie in the hands of local authorities.

Secondly, because councils have great reach into local communities, particularly through their housing and social care services, which makes them well placed to broker links between job seekers and innovative programmes like Franchising Works and Fusion 21.

Finally, because councils are the best place to co-ordinate and broker local resources - able to bring together residents, businesses and different public sector agencies to work towards a common goal, as Stoke has done. 

We want to continue to support local authorities to innovate for growth.  If you're already working on this agenda in your council, or have views on how we can best do this, we'd love to hear from you.