How do we unleash the potential of places across the UK?

Every September in the village of Abbots Bromley, Staffordshire, 10 dancers – six of them wearing stag’s antlers – perform the aptly-named Abbots Bromley Horn Dance. Nobody knows exactly why they do it, or how long the practice has endured. But it’s a long time – one set of antlers has been radiocarbon-dated to the 11th century.

Across the country, similarly distinctive traditions shape local places’ identities, from cheese rolling in the Cotswolds to Leicester’s Diwali celebrations – some of the largest and most impressive anywhere outside India.

Yet in public services, another tradition has become deeply embedded. When Douglas Jay said, in 1939, “in the case of nutrition and health, just as in the case of education, the gentleman in Whitehall really does know better what is good for people than people know themselves”, he probably didn’t envisage quite the level of centralised decision-making now prevalent in policymaking.

As an advocate of regional development, Jay would be disappointed that regional inequality is at around the same level today as it was in the 1900s. A man born in Blackpool can expect to live 10 years less than one born in Hart, Hampshire; a woman born in Blaenau Gwent seven and a half years less than one born in Chelsea. People living in the most deprived parts of England are more than twice as likely to wait over a year for elective care than people living in the most affluent areas. And of course, in microcosm, inequalities can be found within cities, across postcodes, street by street, community by community.

These inequalities bring consequences. Recent research by Harvard University and Kings College London found that if cities outside London had kept productivity pace with their European counterparts since 2008, the country would be £55bn better off and collecting an additional £13bn in taxes that could be reinvested locally – a virtuous circle. The research, which includes contributions from three former prime ministers and four chancellors, found that many regret not having done more to extend local autonomy when they had the chance.

Breaking the habit

Most party manifestos, whatever their political stripe, include commitments to devolve control in one form or another. But once in power, centralisation turns out to be a hard habit to break. When Aneurin Bevan said that “if a hospital bedpan is dropped in a hospital corridor in Tredegar, the reverberations should echo around Whitehall”, he created a mindset of central control and public perception that ministers should be accountable for everything.

Yet if we are to grasp the opportunities – and surmount the challenges – of the decisive decade ahead then we need to achieve a better balance between the need of departmental ‘systems’, whether health, education, justice, transport, or skills, and the places in which they come together.

Today’s world is more complex and requires a more holistic approach to governance, with Whitehall as system steward. Its role should be to build the capacity, capability, and conditions that nurtures local leadership and accountability – bringing organisations together to deliver on place-based priorities.

Here, we set out some ideas on how a reconnection to local roots, and shared institutional working can drive smarter specialisation based on places’ specific strengths.

The rebirth of smart specialisation

Place-led growth is not new. A combination of geography, natural resources, local innovation, and market opportunity helped drive our economy before. In the 19th Century, Stoke-on-Trent had what it took to become a world centre for the growing trade in pottery: ready supplies of coal, clay and water, and access to the talents of pioneers like Wedgewood and Spode.

In the 21st Century, Tees Valley to Tyneside has what it takes to become the green energy coast. They have ready access to the North Sea, proximity to major industrial customers, a skilled workforce trained in the oil and gas sectors, and robust supply links – plus the research resources of half a dozen major universities, including Newcastle and Durham, on the doorstep. The conditions are in place to exploit the burgeoning demand for renewable energy.

And smart specialisation doesn’t simply hark back to the past. For a start, many of the industries are new and emerging. And with new technologies such as AI, innovations such as open banking and blockchain in fintech, and advancements in cell and gene therapy – to name but a few – reshaping the way organisations work and how services are delivered, these sub-regional hubs can become focal points for global knowledge, collaboration, and care, while still being locally rooted.

It is no coincidence that places with place-based leadership roles, such as an elected mayor, tend to be those making the most progress: Tees Valley, South Yorkshire (see case study, below), and Manchester for example. In Greater Manchester, Mayor Andy Burnham has been able to make more progress on integration of health services, and in taking control of the bus network can now make decisions about bus routes and frequencies based on the needs of the area. Also in the region, The GM Baccalaureate, co-designed with local education and business leaders, is transforming technical education to signpost to young people the subjects that future employers in the region want.

In Bristol, the One City Plan brings together universities, employers, charities, and the voluntary sector to define and work towards a shared series of goals for the city to be achieved by 2050. This more collegiate ‘generous leadership’ recognises that no one individual or institution has all the answers, and that diversity and debate lead to better decisions than command and control.

Deeper roots

Universities can play a key civic role in amplifying a place’s potential and mobilising well-educated and skilled people to drive local economic performance. Dr Stewart Adams discovered painkiller Ibuprofen in the 1960s while working for Boots in Nottingham, having gained his pharmacology degree at the city’s University some years earlier.

Many universities already recognise the importance of this role: founded in 2020, the Civic University Network hosted at Sheffield Hallam University exists to help its 100+ members achieve greater civic impact in the form of local social and economic benefits – a virtuous circle advantageous to the community and institution alike.

Investment in place-based innovation can enhance international reputations and attract research funding and students alike. ID Manchester – a new £1.5bn innovation district in the city – will foster the commercialisation of research in the North West, supporting up to 10,000 well paid jobs and contributing an anticipated £800m GVA to the regional economy annually by focusing on cutting-edge areas like advanced materials and bio-technology.

These types of ‘smart clusters’ are also resilient. Take Harwell, for instance. Born out of the concentration of nuclear scientists around the former Atomic Weapons Research Establishment, the Harwell Campus in Oxfordshire has now diversified and is home to the UK Space Agency, Lockheed-Martin, and Thales amongst others. The 700-acre site also includes a number of other research led-specialisms, including clusters in health tech and clean energy. It provides over 6,000 highly skilled jobs and generates an estimated £1bn in GVA for the UK economy.

Our forthcoming research for DSIT, which will explore the place-based innovation adoption and diffusion barriers of over 10,000 businesses, will help places tailor strategies and support to the sectors in which they can specialise.

But universities are not only about research and graduate skills. The first report from Skills England, the new arms-length body formed by the government in July, identifies the ‘fragmented and confusing’ nature of the post-18 skills sector as a major roadblock to closing the UK’s skills gap. Universities are uniquely well placed to help unify post-18 skills provision by bringing disparate institutions closer together, and by forming partnerships with local employers to better align skills provision with the local economy and skills demand.

Shared institutional working

Releasing the potential of places is a shared endeavour, and it will no doubt take time to create the foundations and unwind the culture of control. Even as they recognise the pitfalls of over-centralisation, the leaders of many government departments still feel a lingering unease when it comes to devolving power to places. Not only because they risk a diminution of their own influence, but because of the potential for conflict between growing local autonomy and historic expectations around central accountability. These concerns must be met head on to progress.

The forthcoming Devolution white paper will be a big step forward towards aligning whole-government consensus about the geography of places below the regional level. We think that this geography of devolution should be based on functional economic areas, which would support smarter specialisation and help integrate public service reform on agendas such as skills, communities, and development.

At an institutional level, progress will be challenging as agencies balance their purpose with a place-based remit. For example, UK Research and Innovation (UKRI) must balance the drive to invest in research excellence, which can favour already strong institutions, with a need to develop other potential in all parts of the country. It’s promising to see their toolkit to help teams incorporate place into their programme or activity. Incorporating a similar place-based operating model mandate in new agencies like Skills England to nurture local skills and economic potential would be a solid start.

Equally, it was encouraging to see the recent letter from the Minister for Housing Communities and Local Government to the chair of Homes England, requiring ‘a sustainable, regional and place-based operating model to reflect the shifting focus to delivering successful placemaking and align with our wider devolution agenda’.

Talented officials will have new career pathways and potential in bodies like combined authorities (CAs). Mayors could have more scope to make a difference, while benefitting from greater public recognition and local sympathy than Ministers. And the ‘combined’ in CAs could be about more than joining up local councils across an area. It should result in genuine commitment to combine agendas and remits to address places-based priorities – be it in health, education, transport, or employment.

Ultimately, the decisive decade ahead presents a once-in-a-generation opportunity to allow every community to prosper by enabling places to define their own purpose and priorities. To deliver a place-based approach that nurtures distinctive local economies powered by strong local leaders. To build prosperous communities with sustainable skills bases, with universities playing a central role. To channel a place-based mindset in decision-making. And ultimately, to foster a sense of belonging – with stag’s head dances and cheese rolling optional.
 

Case study: Sheffield – life after steel

The city of Sheffield – once the steel capital of the world, accounting for nearly half of total European production in the mid-19th century – continues to retain the spirit of innovation that its industrial history forged.

The same culture of inquiry and risk-taking that fired steelmaking entrepreneurs is now shaping a future where steel is supplanted by advanced manufacturing in materials such as carbon fibre and ceramics, and skilled labour by R&D fuelled innovation.

The city has many of the required building blocks for regional success in place. It has two strong Universities – Sheffield University (ranked 14th in The Sunday Times Good University Guide) and Sheffield Hallam (ranked 18th). Sheffield University is a major centre for science and engineering graduates, and in 2018 it attracted over £124m in funding for engineering R&D projects.

What’s more, Sheffield does a good job of capturing value from students when they start work. The city retains up to 42 percent of graduates within the region. And since 2018, it has enjoyed a degree of decentralised local political autonomy as the headquarters of the South Yorkshire Combined Mayoral Authority.

The 2,000 acre Advanced Manufacturing and Innovation District (AMID) is home to established Sheffield firms like Forgemasters, and also to more recent arrivals to the area, including McLaren Sportscars and Boeing.

The combination of old values with modern methods is paying off – Sheffield’s economy grew at 12.4 percent last year, the second fastest of any UK city (for comparison, London was 4.1 percent). And this year investment of some £325m into the AMID has been announced, including from Rolls-Royce and US business Holtec – both centred on the emerging Small Modular Reactor sector in the nuclear power industry.

The city’s journey of reinvention is ongoing. But its progress does demonstrate that when it comes to forging a modern role for the UK’s many comparable historic post-industrial places, bottom-up is a more effective approach than top down.