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British business leaders say boosting local government powers further will help firms to thrive

Ahead of the Comprehensive Spending Review, a new survey published today by leading think tank Centre for Cities, in association with law firm TLT, reveals that business leaders feel that the devolution of more powers over areas such as transport and housing will help boost British companies in the years ahead.

In a YouGov poll of over 1,000 British business owners and senior managers commissioned by the Centre (1), 57% said that their firm would benefit from local government having greater control over local transport, while over half (51%) said that giving local leaders more powers over major infrastructure projects such as housing developments would be an advantage to their business. 

The findings are published today in a new Centre for Cities report in association with TLT, ‘Business Views on Devolution’, which offers the first in-depth insight into the views of businesses towards the Government’s devolution agenda – based on national and local polling of business leaders, and consultations with firms from across a range of UK cities.

As well as backing local governments to take on greater control over transport and infrastructure, more business leaders said they would welcome local politicians being able to vary or retain local tax rates to unlock investment in the local economy, than were opposed – with 43% of respondents saying it would be good for their business. This is particularly significant in light of the Government’s recent announcement on the devolution of business rates to local areas.

However, the report also reveals that most business leaders do not feel that they have had the opportunity to shape the devolution agenda locally – with 79% of respondents said that they had received little or no consolation from local government about their views on proposals for more devolved powers.

This was reflected in a number of city-region specific polls conducted by the Centre for Cities and regional chambers of commerce for the report (2). For example, in Bristol and the West of England, more than two thirds (69%) of the 294 business leaders surveyed said they had not been adequately consulted about their views on devolution. Even in Greater Manchester, where plans for devolution are more advanced than elsewhere in the country, there remains more work to be done to ensure that the business community feels engaged. In a poll of nearly 400 local firms across Greater Manchester, more than half said that they have not yet had the opportunity to voice their opinion on devolution. 

The report argues that as local governments prepare to take on more powers over the next few years, local leaders need to channel the enthusiasm of British businesses for greater devolution, by ensuring that local firms are at the heart of discussions about key economic priorities such as transport, infrastructure and local tax rates.

Commenting on the findings, Alexandra Jones, Chief Executive of the think tank Centre for Cities, said: "We often hear that the private sector is sceptical about the benefits that devolution would bring, but this report shows that UK business leaders clearly back the devolution agenda, and believe that it could offer them real opportunities in the years to come. 

"Through our national polling, events and local surveys we’ve spoken to over 2,000 firms from a broad range of industries across the UK, and there is evidently strong appetite among businesses for local governments to have greater control over issues like transport, housing and local taxes.

"But for local leaders to really make the most of the opportunities that devolution could bring, it’s vital that they work with partners in the local business community to ensure that they have a shared understanding of local economic priorities, and that local governments are well-placed to use their new powers to meet the needs of local firms. This will be crucial in making sure that places and businesses across the UK are in the best possible position to capitalise on the benefits that devolution could offer."

David Pester, managing partner of UK law firm, TLT, said: "That only 2% of business leaders believe they have been consulted about devolution to a significant degree speaks volumes about how closed negotiations have been to date. One of the main arguments for devolving powers to cities is to rebalance the national economy and encourage regional business growth, but so far, businesses have been largely in the dark on the issue. 

"As a law firm operating in a number of the cities and regions potentially affected by devolution, it’s crucial that at the very least we understand what’s around the corner. More importantly, there needs to be proper channels to have our voice heard on matters that will directly impact business.

"From discussing the topic with clients and other businesses throughout the UK, it’s clear that there is a desire within the business community for devolution to work. But there’s also concern that if all parties are not involved in ongoing discussions, devolved powers may not have the intended economic impact and we risk this becoming a missed opportunity for the UK as a whole."

Footnotes

(1) The YouGov polling was conducted through an online survey of 1,000 business owners, and employees from senior management level and above. The sample represents businesses from every region in Britain, and with a broad range of annual turn-overs (from less than £1m annually, to £10m and over). Business leaders from the following industries were included in the sample: manufacturing, construction, retail, finance and accounting, hospitality and leisure, legal services, IT & telecoms, media/ marketing/ advertising/ PR & sales, medical & health services, education, transportation & distribution, and real estate.

(2) In September 2015, the Centre of Cities commissioned polling of businesses in four case-study regions – Bristol and the West of England, Birmingham, Greater Manchester and Glasgow. The polling was conducted by the Chamber of Commerce in each city-region, who surveyed members and other local firms in their quarterly economic surveys in September 2015.

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