CEO blog: The Industrial Strategy: a step (but not a leap) forward

30 Nov 2017

After 16 months of consultation and development, the government’s Industrial Strategy White Paper landed this week with a weighty thud. At a forest-thinning 255 pages (and yes BEIS has printed copies) it’s a suitably imposing piece of work. The near-30 page section devoted to ‘place’ is welcome as is the Prime Minister’s ambition to build a Britain that works for everyone. The Industrial Strategy is right that this agenda will not be realised unless yawning chasms in regional growth and productivity are addressed. And it’s hardly a surprise that the Social Mobility Commission has called for increased public spending on those areas that have been left behind economically – many of which coincide with those referenced in the Industrial Strategy’s glossy tome.

But both are disappointingly silent on the loss of European Structural and Investment Funding – worth £14bn to the UK between 2014 and 2020. Given that a whole bunch of other Departments' initiatives were included in the Industrial Strategy, the latter’s failure to reference the Social Prosperity Fund (SPF) which the government has said will replace ESIF but about which no detail or commitments were included in the Budget is ominous.

So how exactly is the place agenda to be promoted? The reality is that together with the SPF there are some parts of the jigsaw that don’t quite fit together. The Local Industrial Strategies, to which the Industrial Strategy refers, are a welcome first step, and very similar to the proposals outlined in our report on devolution and the Industrial Strategy. Universities are rightly referenced by the White Paper as vital actors in these regions and will need to be actively engaged with Local Industrial Strategies from the outset. As ever though, the devil is in the detail and in one vital area that detail, for now, is lacking.

The White Paper makes no mention of funding for Local Industrial Strategies where there is no elected Mayor or Combined Authority.  These Local Strategies are to be in place by spring 2019, but unless Ministers put money on the table, they risk being accused of whistling in the wind rather than providing much-needed investment in the regions which they admit are behind the curve.  

The increase in R&D funding, long called for by MillionPlus, is another step in the right direction but it does reflect a conventional approach to R&D spend. The £115m Strength in Places Fund is more than welcome (although exceptionally modest in amount). It does have the potential to channel funding outside of the golden triangle although a formula-driven approach might have ensured that universities with strong track records for innovation and links with local industry could have got on with the job rather than being engaged in resource-intensive competitive bids.

There is much in the intentions of the Industrial Strategy that MillionPlus can fully endorse: the principle of local strategies, the deep involvement of Britain’s university sector and a focus on place and regional growth. However, to build on the analysis, the Chancellor needs to do much more to support the investment that the Industrial strategy needs to make a difference.