By Daniel Hunter

In a speech to the Local Government Association Annual Conference on Wednesday, the head of the CBI set out how councils have an important role to play in boosting growth, by making smart decisions at a local level.

John Cridland, Director-General, said:

“It’s absolutely clear business and councils are going to need to work together if we’re to deliver growth.

“How the UK attracts investment, delivers jobs and prosperity and creates a sense of shared destiny is a job for local government just as much as it is for anyone else.”

On planning as a facilitator for growth, he said:

“A recent infrastructure survey the CBI did with KPMG showed 98 per cent of companies see planning as a problem. Planning is one of the main areas in which the UK has lost international competitiveness over the past decade.

“The planning system needs to be a facilitator of development, not a blocker of it.

“The National Planning Policy Framework (NPPF) made things simpler, with thousands of pages of planning policy condensed down to 50.

“The new presumption in favour of sustainable development means businesses will be successful in their planning applications if they balance economic, environmental and social considerations.

“The NPPF also gives a powerful incentive to create and update local development plans. That means business can work out how best to help meet the priorities local communities have set out.

“The biggest planning challenge is one for local councils to meet.

“With the power to make more decisions locally comes the responsibility to do so in a way that strikes the right balance. That can mean making difficult choices.

“People might not want to lose open spaces to new developments. But they will want the local employment opportunities they bring.

“Business doesn’t expect every decision local authorities make to come down on our side. But we do expect councillors to make decisions that are in the broad interests of all their voters, not just a vocal few.

“Housing is another case in point. Your residents might not want housing developments. But they will want their children to have a place of their own — and in some cases, the sooner the better.”

On business rates and growth incentives for local government, he said:

“Business wants the centrally-set, Universal Business Rate to remain. It offers predictability on which to base investment decisions.

“That doesn’t mean local authorities shouldn’t have incentives to grow their business base. We support steps to enable authorities to keep a proportion of new business rate revenues.

“Communities that provide national infrastructure, like large-scale renewable or nuclear energy projects, should be rewarded.

“So I’m disappointed that the business rate retention measures being debated in Parliament aren’t more ambitious. Letting authorities keep only half of any increase reduces its incentive effect.”

On-going beyond Tax Incremental Financing (TIF), he said:

“TIF should help unlock infrastructure where there’s growth potential — look at the scale of the opportunity in the Nine Elms area of Wandsworth, and the effect a TIF-funded spur to the London Underground Northern Line could have on its viability.

“The earn-back scheme included in Manchester’s city deal is particularly promising and perhaps more ambitious than the TIF schemes expected from the Local Government Finance Bill. I see the benefits of an initial £1.2bn investment in local infrastructure being retained and reinvested in the city region.

“Similar schemes will work in other city regions so I’m looking forward to hearing that more deals have been finalised.”

On the value of Local Enterprise Partnerships (LEPs) and public / private sector collaboration, he said:

“The private sector can offer a valuable contribution to this process, and through LEPs there’s opportunity for much closer collaboration between us.

“Some LEPs have made a strong start, and they’ve been a shot in the arm for public-private collaboration compared with the Regional Development Agencies, which were often seen as remote.

“They can better reflect functional economic areas than regional structures did, and have an improved understanding of specific challenges faced by different areas.

“But the disbanding of RDAs has led to their statutory functions being centralised, leaving questions as to whether things like transport planning and attracting foreign direct investment can happen effectively without more of a sub-national approach.

“A lack of resource and statutory powers might limit the impact LEPs can make, reducing them to lobbying central government for funds. That doesn’t provide the legitimacy and local accountability LEPs need.”

On making local government job creation efforts more joined up, he said:

“Councils have plenty of initiatives to support local employment, but often these aren’t joined up with the Work Programme — they need to be.

“Manchester City Council is doing this by rolling out a community budgets scheme focused on problem families. G4S delivers both the Work Programme and the European Social Fund's 'Families with Multiple Problems' programme in the city, and has worked with the council to join up with local schemes.

“That means less duplication, better value for money and jobseekers getting better support. It would be good to see the approach adopted more widely.”

On making local government procurement planning more effective, he said:

“I understand why you might have reservations that what works centrally might not work locally and was pleased to see the LGA announce it would develop its own pledge.

“But with procurements in the UK among the slowest and most expensive in the EU, we do need the alternative LGA pledge to share the same objectives as the government’s one.

“So while I support commitments to streamline processes, promote pre-procurement dialogues and communicate with businesses about future opportunities, I want to see more done.

“I urge you to set a target timetable for completing procurements. The average procurement takes 50 per cent longer than the EU average — you need to bring things into line.

“And I think the draft LGA pledge understates the value of procurement pipelines. They help businesses plan — especially small firms that don’t have the resource for market-research teams.”

On the benefits of shared services, he said:

“Pooling things like HR and finance functions just makes sense, and it’s a lesson central government should heed — most departments are way behind the curve.

“And as you know, experience already shows it shouldn’t stop in the back office. The Tri-Borough area of Kensington & Chelsea, Westminster and Hammersmith & Fulham is sharing library services, adult social care and children’s services. Northampton and Daventry are sharing environmental services. And Sussex, Surrey and Hampshire police authorities are sharing air support.

“So to the 134 councils who aren’t sharing any services — and to many Whitehall departments — I say simply: get on with it. There’s every benefit in being bold.

“Let’s consider too what’s happening across sectors within the whole-place community budget pilots.

“Pooled budgets can dramatically improve services and lower costs. So rather than seeing separate NHS, police, probation and housing budgets, let’s see more public funding pooled around outcomes — for reducing youth unemployment, for example, or cutting reoffending.”

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