Today I’m back working my LPIP fellow research project. LPIP stands for the “Local Policy Innovation Partnership” (see more at https://lpiphub.bham.ac.uk/meet-the-lpips/ ) and it’s about innovation and best practice in local sustainable economic, social and environmental development. My project is about the implementation gap in city, local and regional economic development and regeneration.

I’m in the early stages of the project. Reviewing the literature from organisations such as the Institute for Government, and some of the writing from Diana Coyle. I’ve also started compiling the policy documents for local economies over the past 10 years, including the Levelling Up White Paper. 

The ‘eternal’ election campaign mode of governing has led to over a decade of grand ambitions not backed by policies, resources or capacity building

What concerns me is that there are many policy ambitions with very high rates of growth attached, ambitions about productivity and highly skilled jobs for some of our lagging regions and localities, but a lack of commensurate resources or delivery vehicles to realise these. 

According to Professor Peter Tyler in a paper co-authored with Ron Martin and Ben Gardiner, the German government spent a massive €2 trillion on economic initiatives and investments for reunification with East Germany between 1990 and 2018. This was an annual average of about €55 billion. Summarised in their paper for the Bennett School of Public Policy at https://www.bennettschool.cam.ac.uk/blog/levelling-up-left-behind-places 

Professor Tyler and his colleagues highlight this immense financial commitment as a stark contrast to regional development spending in the UK, emphasising the scale of resources dedicated to the German “Aufbau Ost” (Rebuilding the East) program. They note that this spending, which continued for decades, was aimed at bringing the Eastern German economy up to par with the West. The transfers covered a wide range of areas, including infrastructure, business subsidies, and, most significantly, social welfare payments.

Some commentators might think – the UK doesn’t have as big a challenge as German reunification. but the evidence actually says the opposite. As I wrote last year (https://tinyurl.com/uftwam4e ) by 2020, eight out of 12 UK regions performed worse on the measure of GVA per worker than the weakest former East German state.

The UK2070 Commission estimated that addressing regional inequalities would require an investment of £250 billion over 30 years. In early 2024 we were talking about pots of money for local growth of, at best, of between £4.7 billion and £5 billion per annum. Clearly this is not enough to facilitate the reversal of economic decline and living standards in our regions.

Meanwhile, brought back to earth by public procurement processes

PROCUREMENT UPDATE: Back to the glamour of jobbing consultancy…. After discovering that the questions for bidders in the online procurement portal, where you respond, and the project documentation pdf pack were different, I’ve contacted the procurement team through the portal.

And I’ve also discovered that they want everything except the kitchen sink for this project, but have not indicated a budget “in the interests of achieving value for money.” I see trouble ahead!!!

New to procurement? see my Procurement in Economic Development Guide (https://tinyurl.com/bdcsxuf8 ) and Executive’s Toolkit (https://economicdevelopment.world/toolkit/ ).