Unlocking growth - nationally and regionally

With the new government’s agenda laser-focused on driving economic growth, the levers that can be pulled at a national and regional level are locked firmly in their sights.

From a national industrial strategy to devolving powers across cities and regions, the policy agenda is moving at pace. But is it moving fast enough? And what can the public and private sectors do to support the government?

In this month’s newsletter, we dive deep into this topic, drawing on insights from our UK Economic Outlook, Framework for Growth, and Good Growth for Cities reports.

Three ‘I’s of driving economic growth

The Labour government has set an ambitious first mission – to secure the highest sustained growth in the G7, a feat the UK hasn't achieved for decades. Our latest UK Economic Outlook suggests economic activity is gaining momentum, with projected growth of 1% this year. But will this be enough??

Even at its peak, the UK economy lagged behind Canada and is currently on track to fall third behind the US and Canada. But first place is not out of reach. In our report, we explore how the government can boost economic growth by addressing inactivity, industrial strategy, and artificial intelligence.

Framework for Growth

A successful industrial strategy could see a GDP uplift of ￡923 billion by 2035, more than enough to close the gap with the US. Next month the UK government will publish a green paper alongside the Budget, setting out its commitment to “long-term sectoral growth and priority industries”.

Since the pandemic, the UK has struggled to bounce back from stagnant growth rates, exacerbated by long-term challenges around productivity. This challenge inspired our Framework for Growth report, based on one-to-one interviews with over 60 senior business leaders, policy bodies, and trade associations, and a survey of 1,200 businesses of all sizes, to understand what they want from an industrial strategy.

??Tune in to a recent discussion we hosted, with Andy Haldane, former Bank of England Chief Economist, on the sectoral approaches the government may be considering.

Delivering devolution

For the UK to achieve inclusive economic growth it’s vital that policies deliver locally as well as nationally. The government's commitment to devolution fuels hopes of a flurry of decentralisation deals that will hand more power to cities and regions. This will be a lifeline for cities experiencing worsening inequality which means imbalance is felt not just across regions but between people within the same postcodes.

Insights from our Good Growth for Cities Index reveal that the public cares about issues impacting their financial wellbeing – measures such as income, jobs, and housing have seen a large increase in importance this year. Combating this disparity requires targeted, place-based development strategies delivered at the local level.

A successful place-based approach to driving good growth will demand unprecedented collaboration between central and local government, businesses, charities, and other service providers. Our Good Growth for Cities Index measures the performance of the UK’s 51 largest cities, ranking them according to public priorities. To learn more, read the report or watch our LinkedIn Live featuring Lorraine O’Donnell, CEO of Bradford Council, Polly Curtis, CEO of think tank Demos, and Rachel Taylor, our Government and Health Industries leader. Discover more about successful regional initiatives and the role of public and private collaboration.

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