News & Features

How the funding of economic development and growth is moving

TDA, Torbay Council’s economic development company, is coming up to 10 years old and there is a big issue for us on how the funding of economic development and growth is moving.

Nationally, we have seen the Towns Fund investment and Torquay was one of the towns awarded funding in the first cohort announced earlier this month, which is fantastic. However, the bidding process for Town Deal, Future High Street and other competitive funds is very intensive with no guarantee of even a partial reward, so there is a high risk that we are committing scarce capacity and taking away that capacity from delivering for our places.

We still have no word on the UK Shared Prosperity Fund. We are three years down the line from when MHCLG started informal consultation but we have not yet seen sight of detailed plans of how it will be managed, its priorities and size. To help us plan and build back better we need to know how we are going to address some of the key issues that are going to come out of the pandemic in terms of readdressing skills’ progression and making sure there are good opportunities for young people especially. That is a very big concern for us in Torbay, and it is absolutely critical for our locality that we solve it.

When I think about the challenges I see before us as a sector, some of this comes back to a question about where we are as a sector and how we organise economic development. What is the right scale for us to operate at, is capacity going to exist within all local authorities or does it need to sit at more of a regional or sub-regional level through LEPs or combined authorities? Those devolution questions continue to come up and as economic developers we have to work through the sometimes conflicting views of our members, business communities and government trying to support job and wider economic markets in the right way.

There is not necessarily a question mark over what is the role of LEPs, but after ten years we are moving into that time where often national government decides it would like to move some of the machinery around. In addition to the detail of the Shared Prosperity Fund understanding government’s explicit view on whether LEPs are here for the medium term would help us all. Personally, I feel that right now is not the time to be completely reinventing the wheel.

What is the role for local government? Firstly, economic developers within a local authority setting, even if arm’s length, need to find a way of working intelligently across the structures we have. We have to be a convener: local authorities are uniquely placed to convene the different partners at a local level to work with the different levels of government and organisations, whether it is LEPs, national government or other agencies.

We also have to find a way to make space so there are other voices which can come forward, whether that is other public sector partners, private, community or third sector. We have been seeking to do that over the course of the last 12 months locally and it is helping Torbay adopt different approaches where we have recently agreed to commit to the community wealth-building principles. We have worked with the Centre of Local Economic Studies to develop our strategy and are moving into the space now where we are working with our community partners to identify how we can shape the market. And, within this, also shape the role of business and community groups so that they can take on more of the heavy-lifting to do some of that market-making for social enterprises, cooperatives or consortiums of those types of organisations to come forward as suppliers.

We have to be risk takers too, whether that is through funding of activity or through delivery. There has to be a market stimulation role, especially in a place like Torbay, which has a fragile economy where we intervene to provide that confidence and generate momentum based on our data and intelligence and understanding of the place. Then fundamentally local government needs to take a leadership position. This does not mean leadership in terms of being at the head of the table or bringing the loudest voice. It does mean, in my opinion, that the local authority is uniquely placed to bring together the different voices, to create the space for ideas, to coach and nurture partners so they can become more confident and better positioned to properly advocate what they want to see in that local area.

Over the summer there seems to be an epiphany about the importance of a focus on economic growth and skills development/retention. It is driven obviously by the pandemic; in Torbay the figures and forecasts we have for the impact of Covid-19 have brought clearer recognition that we are not going to be able to achieve for the place unless there is a focus on economic growth and development, which is reassuring. The challenge for local authorities will be that as we nationally start to pay off the Covid 19 debt how can our work be funded; is delivery internally led or through alternative structures like TDA or by creating opportunities for private partners or whether it is through a bondholder route or bid?

Alan Denby
Director of Economic Strategy
Email: [email protected]
Telephone: 01803 926312 or 07788 691912