In its recent ‘Plan to Power up Britain’, Labour sought to counter the government’s Levelling Up slogan, the 2019 Tory manifesto commitment now fading lifelessly in the pre-general election fog, with renewed vigour for growth and power everywhere. Labour’s agenda for tackling regional inequality is borne out of a recognition that improving productivity outside of the South East is going to be central to achieving its core economic mission of the highest sustained growth in the G7.

In what has become characteristic style, Keir Starmer and his deputy, Angela Rayner, set out a sober and disciplined view of the world while hinting towards potential areas for deeper reform around workers’ rights and devolution. The plan weaves the thread of ‘driving economic growth across the UK’ through key policy areas, including its framework for better workers’ rights with the New Deal for Working People, commitment to a national industrial strategy, and the Green Prosperity Plan that pledges to cut household energy costs and generate "hundreds of thousands of good new jobs". It sees subregions as the level of geography best suited to holding the pen on economic development, requiring combined authorities to produce Local Growth Plans. It also asks areas not already in a Combined Authority to join in “sensible economic geographies” to begin forming one.

For those keeping an eye on how Labour’s plans for government are beginning to emerge, none of the policy ambitions above will strike as especially new or unexpected. But the quiet hope of councils across the country is that it marks a desperately needed move towards a more mature relationship of partners between the centre and local areas.

The culture of councils spending millions on applying for competitive bids is well documented, as is the short termism of single-year funding settlements. Labour has sensibly pledged to put an end to these and to “get councils back on their feet and doing the basics right”. As a document signalling a direction of travel, the Plan to Power up Britain is a good start. But for a sector whose capacity has been eroded over the past decade and a half, Labour’s vision of the relationship between active state and empowered place needs further development. There are several critical questions here including: How do we give more local autonomy on the delivery of public services to meet the needs of local populations while ensuring high standards for all? How do we give areas the incentives to grow their local economies without exacerbating spatial inequalities? How do we ensure places are able to make their own strategic decisions about economic development without undermining the national strategy?

At Centre for Progressive Policy, we have outlined our latest thinking on many of the above questions including fiscal devolution, local population health and Labour’s proposed local growth plans, while our Inclusive Growth Network has demonstrated the ability of forward-thinking local areas to innovate in public service delivery and economic development even amid enormous fiscal constraints. Underpinning all of this is the recognition that places could and should have more autonomy to adapt to meet the needs of communities, but that this cannot be done in a vacuum. Long term national strategies on health, education and industrial strategy allied to consistent funding streams based on need are also critical to success. In that sense Labour’s commitment to a mission driven government will be important.

The current government has made progress on incremental devolution, with the latest major incarnation being ‘single pot’ funding settlements providing more autonomy for some mature subregions. But while these deals mark qualified progress, this government’s approach to local government finance has been disastrous, while it would be misguided to say the UK has seen anything like a consistent national economic strategy over the past decade, which has in turn resulted in endless churn in approaches and funding of local growth. To date, the government’s response to the local authorities who have already or are at serious risk of declaring Section 114 bankruptcy notices is emblematic of a highly reductive approach: rather than a systemic failing, it is claimed to be the fault of individual investment or financial decisions of individual local authorities. Where this can be weaponised politically and point to the failings of local Labour administrations, all the better.

An incoming Labour government must move quickly to shore up council funding and signal a new direction of travel in its relationship with local areas. Assuming an Autumn election, the new government will have to immediately start working on the finance settlement, and if it is Labour in the hot seat they have committed to a ‘Take Back Control’ Bill shortly after. This will be a major opportunity to demonstrate Labour’s new approach to resetting and building a mature partnership of grownups between the centre and regions, and doing away with the project of paternalism that has seen disastrous consequences.