Blog: 23 January 2017Modern Industrial Strategy: towards a national economic vision

Simon Flisher

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Simon Flisher

Planning Director

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The Government’s new blueprint for a Modern Industrial Strategy has been personally launched by Theresa May. This Green Paper signals new opportunities for place making and infrastructure delivery, which build on both Brexit and the ‘sharing society’ agenda.

It signals an intention for closer collaboration between Government and business on a much more targeted basis in order to drive prosperity. It also recognises that the Government has a range of tools that are able to support significant growth and expansion in the reach of industry and emerging sectors of economic opportunity. Those tools include the planning system.

The rebranded Department for Business, Energy and Industrial Strategy will spearhead the new approach, under the direction of Greg Clark, the architect of the National Planning Policy Framework, who has seen a flurry of meetings with business leaders to shape the new vision.

Place making cuts across the ten ‘strategic pillars’ of the new strategy. These pillars include upgraded infrastructure, with better standards of performance on energy, transport and water and better alignment of central government investment with local growth priorities. Its ‘Sector Deals’ also build on existing concepts and networks including the Northern Powerhouse, Midlands Engine, city devo deals and LEPs and seek to share the benefits of success across the whole country.

Far from representing a radical departure from previous thinking, the Industrial Strategy indicates a willingness on the part of Government to contemplate intervention to correct market failures and to develop strategically important industry. It is in line with Clark’s ideology as expressed in the NPPF, with its support for clear economic strategies, sectoral support and flexibility. In policy terms there is therefore a degree of practical continuity.

 

However, the political profile of public policy for industry has significantly increased as the country nears the triggering of Article 50. The attention that has been placed on the UK future of such businesses as Tata Steel and Nissan over recent months reflects the sensitivities and importance of the interrelationships between major operators and whole communities. Effective dialogue between planning decision makers and industry will be essential if cross-cutting and sustainable gains are to be optimised.

The ongoing work of the National Infrastructure Commission (NIC) should also assist in ensuring that decision making is keyed into strategic infrastructure investment. Its National Infrastructure Assessment is currently in preparation and will plan for a range of large scale investment including transport connections and energy generation over a 30-year time horizon. This is twice the 15-year period that is usually considered when preparing plans at the local level.

We expect to see the NIC publish its initial vision and priorities before the summer break.

Emerging opportunities for infrastructure-led development present real potential to put flesh on the bones and prioritise sustainable and balanced growth. Effective planning shows that the benefits of infrastructure can revitalise communities through multiple positive outcomes including jobs, homes and shared facilities. Internationally, it is evident that the certainty and consistency of a long term vision is also an essential component of success when it comes to targeted investment in key sectors.

Both the Industrial Strategy and the National Infrastructure Assessment suggest that the May administration has recognised that a long term and ‘larger than local’ approach is necessary when engineering strategic economic interventions.

Traditional economic levers including loans, tax incentives and investment in skills are all vital. Yet ambitious strategic planning will also be crucial in order to realise the infrastructure and places commensurate with the Government’s vision of a winning economy for the twenty-first century.

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Infrastructure, Industrial, Logistics, National Infrastructure Commission