In her 2025 Budget speech, the Chancellor rightly highlighted the importance of public investment in driving growth alongside the ‘lifeblood’ of private finance, namechecking infrastructure projects including the Midlands Rail Hub, the Transpennine Northern Growth Corridor, Northern Powerhouse Rail alongside others in Peterborough, Darlington, Anglesey, Inverclyde and Kirkcaldy.
It sounds like an obvious point to make, but every such large scale investment and development project is located in a physical place – and as such will need the support of the local planning authority, making councils a vital player in the wider growth system in getting development over the line in ‘the last mile’.
That’s the focus of our new report commissioned by the Local Government Association, ‘A Force for Growth: Spotlighting the role of councils in enabling inclusive economic growth’. The report is produced by the Growth and Reform Network – a partnership between The Future Governance Forum and Metro Dynamics creating a new forum of local and combined authorities, bridging the gap between national and local government when it comes to inclusive growth and public service reform.
‘A Force for Growth’ focuses on the prosaic but pivotal action councils take day in and day out to foster the best possible conditions for growth in their places. It paints a picture of the often invisible role councils play in the wider growth system, increasingly in concert with Mayors and combined authorities where they are in place.
The size of the prize is huge. Our research found there could be as much as a hidden quarter trillion pounds of untapped local economic potential across the country. We found that every type of economic geography – rural and coastal as well as urban – could grow its local economy by at least 10% – if the wider growth system was working better.
Our conversations with council leaders, chief executives and directors of economy in local and combined authorities pointed to a four pillar framework to illustrate the breadth of how – in practical terms – councils already support growth, and where there is potential for them to do more.
Councils’ role as ‘growth facilitators’ was naturally felt to be the most important because of their regulatory functions, with planning chief among those. Meanwhile their activity behind the scenes to broker relationships with potential partners and to keep planning and infrastructure projects moving might be less visible – and increasingly limited given ever pressures on council budgets, not least for social care – but it is no less vital.
But councils’ contribution to local growth doesn’t start and end with their planning obligations. Their democratic mandate to convene partners across all sectors – public, private and social – means as ‘orchestrators’ they are often the best-positioned local actor to join up and maximise their place’s collective economic potential Equally, with £130bn spent every year on local government services in England and Wales, councils’ role as service providers gives them yet more power, both in pure economic terms and in their ability to regulate and support wider commercial activity. Lastly, the sheer size – and permanence – of councils means they are invariably one of the biggest employers, buyers and investors in their local area, meaning that as ‘anchors in their places’ they are also economic actors in their own right.
Taken together, these four roles mean that local authorities can play an outsize role in growing their local economies, and in turn raising the overall level – and the more equitable regional distribution – of growth across the country. With all that potential in the system, there’s more that everyone can do to contribute to this vital effort, which is why our report recommends:
- Councils and combined authorities should work as partners on setting regional growth strategy through Local Growth Plans. Councils in non-devolved areas should take the lead in their areas
- National government should deepen its relationship with local government and loosen its funding restrictions to incentivise councils to drive local growth
- The LGA should be a go-to source of best practice and provide additional support to councils in non-devolved areas to lead on local growth strategy.
Growth remains the national government’s overriding mission: as the way to tackle the cost of living crisis, to spur innovation and creativity, and to generate the funding our public services desperately need. After almost two decades of stagnation, we need to pull every single lever available to us – including empowering local councils right across the country to play their unique role in delivering economic growth that will benefit millions of people.
