01 Oct 2024
By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
It is now just one month to go until the Chancellor of the Exchequer puts us out of our misery – or perhaps helps us understand the full extent of our misery - with her budget announcements. There will be one issue I will be keeping a close eye on from a Glasgow perspective: regional funding given to local authorities to invest in the growth of their economies. Locally the recent opening of the Govan-Partick bridge is one example of an initiative financed from regional resources, while the funding of 11 research commercialisation projects with our universities through the city region’s designation as an Innovation Accelerator partnership is another.
Submissions for the UK Government’s Budget and Spending Review closed a fortnight ago and British Chambers of Commerce (BCC) - which represents the 52 Accredited Chambers of Commerce in the UK (including our own Glasgow Chamber) and 75 British Chambers overseas - has sent in our current priorities for the Chancellor to consider. It usually works best if there are a few specific requests and this year the BCC has chosen to emphasise five.
Three focus on devolved issues in skills planning, business rates and transport infrastructure which will be more directly relevant to English regions. However, the other two have wider UK applications. One is a request for the expansion of full expensing against corporation tax of investments in business assets to include a company’s leased assets. This reflects the ongoing task of boosting the worryingly low levels of UK business investment. The second is seeking greater use of the tax system to support workplace health and wellbeing. The unusually high number of workers dropping out of employment after the pandemic for health reasons is the main motivation for BCC looking at ways to encourage employers to invest more in staff health.
These are undoubtedly major issues but Glasgow Chamber was especially keen for BCC to raise the importance of regional funding. Mayors in England have become increasingly significant figures persuading central government that they are best placed to tackle many of those issues. Glasgow City Region has also been doing more to work
with business and with higher education institutions to create a range of projects investing in local infrastructure, skills and business innovation.
Glasgow Chamber set out five asks during the General Election that build on the regional structure - investment in the Clyde Metro light rail project to speed up its delivery, initiatives to help our city centre attract new investment, a fresh investment programme to build maritime industry on the Clyde, a new innovation deal to expand the number of high growth technology firms in the region and a regional skills and jobs programme to help tackle chronic skills shortages and help more Glaswegians into work. Each of these could be delivered effectively at the regional level.
We were therefore pleased that BCC made clear its support for greater powers to be devolved to the local level specifically calling for greater certainty on the future of the UK Shared Prosperity Fund (UKSPF) – money that was intended by the last government to go some way towards replacing European Structural Funds that previously played a fundamental role in financing regional economic development plans. Glasgow City Region has been investing over £60m of UKSPF and with no announcements yet on the role of UKSPF after March next year, several programmes risk being stopped early including those aimed at helping citizens furthest away from successfully getting a job.
The Labour Party manifesto made clear it would ‘transfer power out of Westminster and into our communities’. It also committed to multi-year funding settlements, greater local flexibility in deciding how those funds are used and an end to the ‘wasteful competitive bidding’ that was a regular feature of the last government’s approach to Levelling Up.
Consider the range of programmes that Glasgow City Region was having to manage – City Deal funding, multiple rounds of Levelling Up funds, the Innovation Accelerator programme, Community Renewal funds, Shared Prosperity funding, bidding for Green Freeport status and most recently delivering Investment Zone status. All these programmes have different accountability requirements and varying time frames, and now the City Region is unsure what the status of each of these streams of funding is. Will they be continued into the next financial year and beyond? We don’t know.
The Chancellor in her budget and spending review could make three main announcements that would help. Make it clear which of the existing programmes are being maintained - such as Green Freeports and Investment Zones - as originally announced. Commit to all other programmes being carried forward into next year at least. That will allow time for sorting out the new approach that the Labour manifesto described. Finally, set out what the steps will be for applying the manifesto principles.
Regional devolution can be a powerful policy for growing our economy and with those three simple steps the Chancellor can begin delivering on those manifesto promises.
This article was first published in The Herald on Thursday 26 September 2024
