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Supporting Economic Recovery in Inverclyde, West Dunbartonshire & Argyll & Bute

Despite having their differences, the three local authorities of Argyll & Bute, Inverclyde, and West Dunbartonshire face similar challenges.

Some of the most notable refer to population decline, economic recovery in areas requiring regeneration, and how to address complex issues such as inequality and poverty.

What works – lessons from the literature

A comprehensive literature review was carried out to identify successful policies both from practice here in the UK and abroad.

We found a range of policies which have successfully addressed population decline in the past –

  • Increasing affordable housing
  • Improving local infrastructure
  • Attracting skilled workers

To support economic regeneration efforts, the following policies are available to policymakers –

  • Developing a knowledge exchange economy
  • A strategy of industrial specialisation
  • Addressing a skills mismatch
  • Attracting new-high profile firms to the region

Policy initiatives to address inequality and poverty have included –

  • Encouraging inclusive growth
  • Introducing employment initiatives
  • Social lending initiatives
  • Building community engagement
  • Retrofitting homes and buildings

Which areas in Great Britain are facing similar challenges?

Whilst desk-based research provided useful examples of best practice, we carried out qualitative research to find out what has worked, across Great Britain, in tackling these grand challenges.

In order to identify, and then interview, similar, or “sister” local authorities across GB that are facing the same challenges as the three councils, we created a similarity index based on four themes: demographics, industry, labour market, and poverty.

These indicators identified the following areas in England and Wales as similar to the three councils:

  • Argyll & Bute: Powys, Ceredigion, and Northumberland (part of North East LEP).
  • Inverclyde: Blaenau Gwent, Redcar and Cleveland (part of Tees Valley combined authority and LEP) and Neath Port Talbot.
  • West Dunbartonshire: Knowsley (part of Liverpool city region combined authority and LEP), Blaenau Gwent and Merthyr Tydfil.

The literature review also highlighted areas that have successfully tackled some of these grand challenges which we therefore interviewed as part of our primary research. These areas are the Greater Birmingham & Solihull (GBS) Local Enterprise Partnership (LEP) and the D2N2 LEP.

Feedback from our interviews/engagements are used throughout this report.

What did these areas tell us?

In Q1 2022, we engaged with policymakers in local government, umbrella bodies, enterprise bodies, combined authorities, and national government. Our findings from our primary research fell under five key themes, highlighted below.

Policy Context

There was considerable reflection from policy makers on the economic development landscape over the past decade or so, and the impact that recent developments, i.e. Levelling Up, have had.

The range of powers that are available in the combined authority model was highlighted as a way that more regional powers were “able to offer the package of powers that are more able to holistically address the issues in our region, and ensure that we are offering opportunities to young people, in terms of economic development, employment opportunities, skills and housing”.

Skills & Knowledge Economy

In their recently published skills report, D2N2 identified technological change, COVID-19, and Brexit as the cause of some pronounced skills mismatches in the regional economy. One initiative discussed was to engage with further and higher education providers to understand where current skills mismatches lie, and what action could be used to address these issues. Governments could provide incentives to education providers to offer courses that may not be in demand now, but will be essential to address future challenges emerging from issues like Brexit.

Attracting investment

Certain types of policies can encourage the relocation of high-profile firms to a region, provided the correct incentives are offered. For example, in our interviews, it was highlighted that grants, not loans, had been particularly effective at attracting high-profile firms to the area. This was epitomised by the relocation of SmartParc to the D2N2 region, owing in part to a £12 million grant offered by the D2N2 LEP. As a result of SmartParc’s relocation, over 5000 jobs were created in the D2N2 region.
The Tees Valley also provides examples of incentives that have been used to regenerate large Brownfield sites, most notably the British Steel site in Redcar and Cleveland.

Foundational economy

The foundational economy refers to organisations/businesses that provide services and products within their communities that support everyday life. Jobs in the foundational economy most notably refer to health, care, education, housing, utilities, tourism, food supply and high street retail.
According to the Centre for Research on Socio-Cultural Change (CRESC), policymakers often neglect the side of the economy that creates and distributes essential goods and services, instead focussing on high-tech, R&D intensive sectors which may not be well suited to their region. Investment, promotion and support of the foundational economy are being particularly pursued in parts of Wales.

Infrastructure & Housing

In our engagement, there was a notable focus on the economic and social benefits that come from spending public money in the local economy. For example, Swansea Council, as part of their Community Benefits Policy, now attach community benefit clauses – i.e. a clause that ensure supply chains are committed to local sourcing – to development or regeneration projects.
Another interesting initiative was a grant offered by the United Welsh Housing Association as part of a partnership in Blaenau Gwent. This grant enabled the housing association to map out their supply chains and better understand their local economic impact. Through this initiative, a greater percentage of public money is reinvested in the local economy, supporting local suppliers and jobs.

Authors

Mairi is the Director of the Fraser of Allander Institute. Previously, she was the Deputy Chief Executive of the Scottish Fiscal Commission and the Head of National Accounts at the Scottish Government and has over a decade of experience working in different areas of statistics and analysis.

Calum is an Associate Economist at the Fraser of Allander Institute (FAI) and a Researcher at the Centre for Inclusive Trade Policy (CITP). He specialises in economic modelling and trade, and holds an MSc in Economics from the University of Edinburgh.

Adam is an Economist Fellow at the FAI who works closely with FAI partners and specialises in business analysis. Adam's research typically involves an assessment of business strategies and policies on economic, societal and environmental impacts. Adam also leads the FAI's quarterly Scottish Business Monitor.

Find out more about Adam.