Some have defined yesterday’s Budget as a spending spree on behalf of a newly strengthened and buoyed up Government. What it did undoubtedly show, however, is that it is, at very least, an administration that is looking to walk the walk in terms of the levelling up of the UK’s regions and nations. But how effective are the pledges that were made by the new Chancellor in tackling regional equality and boosting business in the areas outside London?
Infrastructure
Whilst the Chancellor’s pledges for additional business funding and tax breaks will certainly benefit business across the UK, a favourable environment in which to grow is key, and good national infrastructure is an essential element in that growth.
What we have seen in the Budget is that the Government is attempting to deliver on its levelling-up agenda. We regularly hear from ICAEW members in business in the regions that a key blocker to business growth in terms of both logistics and attracting a talented workforce is a lack of accessibility in terms of digital and transport connectivity. With £600bn pledged by the Chancellor in the years leading up to 2025 it is clear that those concerns are now being addressed, and long-proposed changes to the Treasury Green Book rules will make investment in areas outside of large metropolitan areas in the South possible.
The announced allocation of £4.2bn across the UK’s metro mayoralties for public transport will also bring a shot in the arm to regenerate bus services, cycling and other initiatives in the regions and a much-needed local perspective on what those services should look like. This localised approach to transport, however, should not be confined to those regions with metro mayoralties and should be aggregated more widely across the country.
Skills
Through our consultation on skills gaps in the UK economy, ICAEW has discovered that skills shortfalls are a major inhibitor for business growth in areas outside of London. Scant reference, however, was paid in the Budget as to how we can provide the best talent and skills for regional industry.
It is true that ICAEW has long championed alternative routes to work, and it is undeniable that the £1.5bn capital spending promised by the Chancellor for Further Education colleges is welcome. Nevertheless, we also need to address skills shortages in the current labour market to provide the highly productive and digitally skilled workforce we need in the rapidly changing commercial environment of today. That is why it was so disappointing that no further mention of the adult education budgets that would enable businesses to upskill their existing staff was made, despite featuring heavily in the Conservatives’ 2019 General Election manifesto.
Devolution
My team and I regularly interact with policymakers, such as Local Enterprise Partnerships and Combined Authorities. We have seen at first hand the role that devolution has played in helping economies across the UK to grow and thrive, especially in areas like Manchester and the Tees Valley that have directly elected mayors. I believe that with the right budgetary impetus, the creation of the West Yorkshire mayoralty, as announced by the Chancellor, could have a hugely transformative impact on the local economy and business landscape. However, ICAEW is aware that in many cases, the powers of directly elected mayors are not sufficient to meaningfully regenerate the economies of their constituencies, and we would like to see their capabilities being standardised across the UK.
What we are seeing here is a renewed focus on the regions and nations of the UK, but it is doubtless the case that there are structural barriers to achieving this equality. Whilst these cash commitments and changes to spending rules will have hugely positive implications on the regions, what we need to do now is to harness the human capital in those areas to help businesses thrive and to give local people a voice in making their region an excellent place to live and do business.