Who is responsible for growth in the UK? It is the number one priority of the government, according to prime minister Keir Starmer, and his chancellor has said that she believes achieving sustained, productivity-driven growth will require an “active, strategic state, working in partnership with business to build prosperity that is secure and resilient in a fast-moving world”.
Since Reeves made that statement at the Mais lecture at Bayes Business School in March, the fast-moving world has continued to challenge the UK's growth prospects. And while the prime minister and chancellor must play a part in setting national frameworks, the business of driving productivity-led growth sits not with them but with investors and businesses right across the country.
At the Connected Places Summit – a two-day gathering of local, central and regional government leaders alongside innovators and investors from industry and academia – a different answer emerged to the question of who is responsible for growth in the UK.
Speaking at the event’s opening session, mayor of South Yorkshire Oliver Coppard likened the question to that which was reportedly posed by US diplomat Henry Kissinger in the 1970s. Kissinger is said to have joked “who do I call if I want to speak to Europe?” in order to highlight the lack of unified leadership on the continent.
“If you want to speak to South Yorkshire, who do you call?” asked Coppard. “Increasingly, I hope, you call me.” And on a wider scale, he argued, it falls to regional leaders – in England, elected mayors – to drive growth. The national government sets the policy framework and sometimes works directly with large multinationals, he said. But it does not speak to entrepreneurs, drive the growth of small businesses or do “the myriad things that growth requires” at a place level. And at local level, councils have largely been denuded of their growth function and must focus on core responsibilities, he argued, while businesses are focused on their own growth, not the wider ecosystem which will support economic success of an area.
Growth, Coppard concluded, therefore “falls to mayors”. In South Yorkshire, he pointed to the striking example of Sheffield's Advanced Manufacturing Park, which hosts McLaren, Rolls-Royce and the University of Sheffield. The park has a 25-year growth plan and is about to see the construction of a new station and 4,000 new houses. It is located on the site of an old coal mine, close to the location of the Battle of Orgreave – a pivotal moment in the 1984-85 miners’ strike, one of the most violent clashes in British industrial history and now the subject of an official inquiry.
Yet today, Coppard says, when people come to take photos representing the battle or to illustrate articles about that inquiry, “we have to try hard and find a place that isn't hugely developed and looking really shiny and nice, because it's all completely, fundamentally changed”.
“As a result,” he continued, “we've seen 64% productivity growth in Rotherham, second fastest in the country and the fastest sub-regional economic productivity anywhere in the north of England.”
Across the two days of discussions at the summit, there were many other examples of how committed place-based leadership and strong regional plans can drive both growth and innovation. Attendees heard, for example, about Forth Green Freeport, which chair Susan Rice described building on Scotland’s long-established expertise in energy and engineering and which has recently constructed a large berth at the Port of Leith capable of handling the largest offshore wind vessels. By contrast, the Plymouth and South Devon Freeport has put at the heart of its investment offer the area’s deep maritime identity as home to the largest naval base in Western Europe and a national centre for marine autonomy.
Kellie Beirne, chief executive of Cardiff Capital Region, spoke about how the area has focused on really “narrow and deep differentiation” as part of its plan to build investment-led growth across 10 councils in South East Wales. She gave examples: rather than claiming expertise in "life sciences", the region focuses specifically on medical diagnostics; rather than "advanced manufacturing", it targets next-generation compound semiconductors. This level of granularity, combined with consistent long-term focus on those areas, is one strand of what it will take to make the area investable, she said.
“Devolution is becoming a reality and the confluence of money, plans and delivery in the hands of people who are elected to represent their community is a powerful step forward” Erika Lewis, Connected Places Catapult
So what role can or should central government play in supporting this regional growth? Many speakers at the event acknowledged that there have already been significant and important steps in devolving power to regions. As Connected Places Catapult chair Erika Lewis put it in her opening remarks on the first day: “Devolution is becoming a reality and the confluence of money, plans and delivery in the hands of people who are elected to represent their community is a powerful step forward.”
The chancellor has signalled more of this to come. In her Mais lecture shortly before the event, she indicated that a “roadmap for future fiscal devolution” will be published at the Budget this autumn. “This will set out plans to give regional leaders control of a share of some national taxes which have, for too long, been allocated by central government,” she said.
And alongside this active devolution, there is a role for central government to play in supporting regions to build increased capacity and better connections.
After outlining the success so far of South Yorkshire growth plans, Coppard said the challenge now facing his area is “a capacity problem”. There are many projects in his area with great potential – he listed the Don Valley corridor, a new mayoral development zone and South Yorkshire airport – but the challenge is in continuing to build investment and deliver the plans. “We all know that strategies don't deliver outcomes. People do,” he said, adding that, for all the great potential in South Yorkshire, “We can't do it without great people. We have some great people, but we need more. And to do that, we need the money for funding the revenue in order to get capacity.”
One way to address this will be through partnerships with bodies such as Connected Places Catapult and the National Wealth Fund – both funded partly by central government to support growth or innovation. Coppard explained how South Yorkshire Authority has signed a memorandum of understanding with CPC to co-fund a dedicated member of staff working across both organisations, “helping us move faster, strengthen how we design and deliver projects”.
On the event’s second day, attendees also heard about a partnership between Greater Manchester Combined Authority and the National Wealth Fund. The fund offers a number of ways to support regional and local authorities by embedding capacity or acting as a trusted advisor to help with pipeline prioritisation, project development and commercial strategy. As regional authorities build their capacity, central government-led organisations can offer this kind of specialised support.
But capacity is not just about people. Beirne said there is also the need for a change in mindset, shifting from a “grant dependency culture” to a more commercial focus with a deep understanding of what it means to be investable, rather than simply grant-worthy. “For us, it's always been about innovation-led growth,” she said. “That’s why we've got investment. We were the first local Innovation Partnership Fund in Wales. So we try to really challenge ourselves. What are we about? What do we stand for? What are our real points of differentiation?”
"With de-globalisation accelerating, sovereign capability is not going to be achieved by regions competing with each other" Kellie Beirne, Cardiff Capital Region
“I think it does take some bravery,” she added, explaining that this approach is a “real departure” from how many people tend to think in the public sector, particularly in terms of attitudes to risk and reward.
Beirne also raised a second challenge: striking a balance between regional specialism and cross-national cooperation. "Region building is nation building," she said. "With de-globalisation accelerating, sovereign capability is not going to be achieved by regions competing with each other."
This balance between local focus and wider collaboration was a recurring theme across both days. At the panel exploring the impact of strategic industrial zones, Jan Ward of the Plymouth and South Devon Freeport described deliberately bringing freeport chairs together early to head off competitive dynamics. This helps freeports actively support each other's initiatives, even with their natural areas of overlap. Other formal and informal networks exist – such as the UK Innovation District Network, which supports places with a focus on innovation – but there can also be a place for central government in fostering a collaborative rather than competitive relationship.
Speaking to CSW for a podcast recorded at the event, CPC’s managing director of built environment and local growth, Alan Welby, pointed in particular to a common way in which departments allocate funding. "Government likes to run competitions, and competitions sometimes don't help,” he said. “How do we move into that place of really challenging and forcing collaboration?" His argument was that central government needs to move beyond simply devolving funding and powers and instead actively push places to collaborate at scale, both geographically and sectorally. "We need to turn memorandums of understanding into genuine projects of scale," he said. "The smartest places will build their capacity locally, make it sticky, but collaborate regionally, nationally and internationally."
Across both days of the event, discussions moved around data, innovation, sustainability and the future of transport. But threading through all of these was the question of how to drive growth through scale. And underpinning that was the belief that place-based thinking and acting is the best way to build networks and infrastructure to support growth. Or, as Ian Brown, chief investment officer at the National Wealth Fund, put it succinctly: "Economic growth will only come from increasing the productivity of places."