Britain must rebuild its institutional muscle

Posted on: 10 January 2025 by Ian Wray in Blog

To develop and deliver the necessary projects to meet its growth ambition government will need to strengthen its own executive capacity and 'institutional muscle', alongside devolution to local government. The Ministerial Task Force concept pioneered by Lord Heseltine in Liverpool might provide a model, as would the late Lord Prescott's regional development agencies.

The new government knows that economic growth is crucial. Currently growth is anaemic and likely to contract, perhaps by 1%, given Presidents Trump’s proposed tariff war. The demand for public expenditure is growing, especially in the military sector where the UK retains a significant military and global commitment. Britian is the world’s third biggest military spender (comparative international figures for 2022). An increase could be sought in the order of an extra 1% of GDP. Yet the country’s industrial and technological base is much reduced and it is no longer a leading industrial and economic power.

Government hopes it can increase economic growth and productivity, mainly through planning reform and by securing large scale private investment. A key question is how it can develop the necessary projects, especially innovative projects with the potential for high growth and returns, across a very wide spectrum including:

• Real estate, including housing, tourism and offices
• Basic infrastructure – water, energy, transport
• Higher education
• Sport and the creative sector
• Advanced manufacturing and high technology industry
• Corporate R&D
• The food sector and agriculture
• Defence industries and aviation

Identifying and developing the necessary projects will need to embrace the three concepts of ambition, brokering and continuity[1]:

• Ambition in identifying and developing initial ideas and assessing their potential proposals. Some proposals are likely to emerge at the creative frontier of existing knowledge and experience, need complex professional support and proponents may often require ‘handholding’
• Brokerage in identifying and drawing in partners and backers, securing consents and achieving wider support and buy in.
• Continuity in securing long term finance and implementation potentially over a long-time scale (up to twenty years and even beyond)

Some projects may be relatively easy to implement, especially where they have been under development for some time or lack technical complexity. These are potential early wins. Others may take much longer to secure and may need patient long term development finance in areas where payoff is uncertain. Others such as large-scale real estate my need to be developed in terms of a longer-term plan to secure support and continuity.

Past experience shows that all such projects will need support from institutions in the private sector or the public sector: from government, local government, business, universities, land owners, banks, developers and so on. My 2016 book ‘Great British Plans’ includes several case studies which exemplify the role of these non-state and civic institutions, in examples as diverse as the building of the Channel Tunnel rail link, the world’s first public park and the establishment of the Bletchley code breaking operation in World War Two[2].

One of Britain’s problems is that in pursuit of a small state, starting with Mrs. Thatcher but especially over the last 14 years, the necessary support has been progressively weakened, not least in local government, in the planning system, in the civil service and in what might be described as ‘developmental state’ institutions.

These include: the former metropolitan county councils, the shire county councils, city local government, regional development bodies, regional plans, regional offices of government, new town development corporations, urban development corporations, former nationalised industries (especially railways), EU regional development programmes and so on. All have either been abolished or had their budgets sharply reduced. Others, like the regional water companies, some supermarket chains and even major football clubs have become laden with debt, through complex and unproductive financial engineering schemes. A number of local authorities are on the edge of financial collapse.

Instead of supporting wide ranging development projects led by diverse bodies, recent Conservative governments seemed to prefer large scale centralised projects like the abandoned HS2, a scheme without effective leadership, support, management, cost control and sound specification. This preference for mega schemes prevails in the transport ambitions of the Metropolitan Mayors in Manchester and Liverpool.

It follows that to develop and realise successful projects (both long term and early wins) in partnership with private investors, the UK will need to rebuild institutional muscle in (and for) a wide variety of public and quasi-public organisations, much as failing states the global south need to develop their own institutions. Professor Damon Silvers at UCL’s Institute for Innovation and Public Purpose had outlined how this process of institutional building needs to proceed[3]. There are several options and strengthening local government is first in line - as the current devolution white paper outlines[4].

But it’s not just institutional muscle in local government that needs rebuilding. It needs to happen in the centre too, creating the power to act and shape events, not just to evaluate bids and proposals from others. Perhaps it is also time to assess and repurpose (this time with ministerial leadership) an idea to which Labour was once strongly committed[5] and which the David Cameron government swiftly binned, without evaluation or explanation: the late John Prescott’s Regional Development Agencies.

[1] These concepts, the ABC of regeneration, were originated by Nicholas Falk of the Urben Trust

[2] Ian Wray, Great British Plans: Who Made Them and How They Worked, Routledge, 2019

[3] https://www.ucl.ac.uk/bartlett/public-purpose/events/2023/may/beyond-neoliberalism-how-think-about-rebuilding-capacity-democratic-state

[4] https://www.gov.uk/government/publications/english-devolution-white-paper-power-and-partnership-foundations-for-growth/english-devolution-white-paper

[5] https://www.ft.com/content/0446b703-5d33-49d7-aad4-976bbd4f30c5