Levelling Up perspectives: what’s in it for the private sector?

We have been taking a look at what the Levelling Up White Paper means for those who will be needed to deliver on the ground. The White Paper sets out a much clearer vision than we have had before of what government means by Levelling Up – in terms of measurable outcomes that are linked to defined missions. The task now is therefore to take that vision, along with the concepts and opportunities presented in the white paper, to deliver growth and prosperity across the UK regions.

There is a clear need for private sector to play an even more proactive role in helping local government to translate their vision into delivery. By this I mean engaging with the agenda and the public sector entities, and use their expertise to help set out how to turn ideas into activity. Most local government bodies will admit that their strength is in delivering services, albeit some - such as the well establish combined authorities and regional transport bodies - have strong expertise in local delivery of capital projects. However, local authority resource and skills in these areas is limited, and so they are rightly looking to bodies such as Homes England and the private sector to help drive what comes next.

Homes England has a significant role to play in delivering place-based regeneration, and we await announcement of where they will initially focus beyond Sheffield and Wolverhampton. In the meantime, the private sector has a major opportunity to take the hooks littered throughout the white paper and develop ideas that meet both their needs and support the local agenda. In particular, I see three specific opportunities for private sector to lead the way:

1. Innovative investment structures

The scale of the Levelling Up task, and the returns that major regional investment potentially offers, points towards even greater opportunity (and need) for private sector investment and finance. There are now several different “pots of funding” being directed at Levelling Up, and the public sector should welcome innovative thinking around how these can be used to leverage private investment to best effect. This needs to be a “win-win” scenario, and so private sector would be well-advised to present ideas of well-structured commercial arrangements such that risk taken by public sector to unlock development or invest in innovation is acknowledged (and appropriately rewarded) but is then used to leverage investment that builds on momentum achieved and create a programme of change. There is a long history in many places of public and private sector partnership working – the opportunity is here to propose the next iteration of partnerships and investment models to ensure that government investment is put to best use.

2. Developing skills and talent to address the gaps

There is wide consensus that there are major skills gaps in many of our regional locations where government is looking to Level Up through investment in growth and innovation. The issue arises not just in locations such as Teesside where traditional industrial skills need to be modernised, for example to support the new green agenda, but also in places like Greater Manchester, where the race for resource with skills in digital and new technology is fierce. This is a perfect moment for businesses to work hand in hand with local education providers and local government to inform and direct investment in skills training into those areas where they are acutely needed at a local level and to support the connected growth sectors. Whether that is through playing a sponsorship role of students or institutions, integrating skills development with employment, or at a more practical level around designing training / skills programmes – the better linked-up this ecosystem is, the easier it will be for the business case for public sector investment into skills development to be made.

3. Driving the commercialisation of innovation

One specific area of opportunity that we have seen take shape is around innovation. With a commitment to spend at least 40% of R&D investment outside of the South East “Golden Triangle” of London-Oxford-Cambridge, comes a question that public sector may struggle with around what “innovation” means and how it can be commercialised to create economic opportunity across communities. Innovation accelerators have been announced for some regional cities that have already been thinking about what innovation exists in their economic geography and how it can be harnessed to support economic growth. However there remains a lot to do. Some of this returns us to investment, as the majority of private sector finance for start ups, incubators and small businesses with a growth ambition still finds its way to the South East. Private sector should focus some more on how to support regional entrepreneurship to enable the conversion of that R&D investment into commercial opportunities and ultimately productive and skilled jobs for local people. The innovation ecosystem needs not only the ideas arising from R&D activity at universities and research institutions, but also the culture, place, community and workforce to scale up and maximise the Levelling Up outcome.

These are only three suggestions of where private sector can use their expertise (and money) to work alongside local leadership and public sector to deliver Levelling Up – and I think they are all “win-win” scenarios. The places most likely to be successful will be those where private sector and public sector work collaboratively in driving the market forward, using the vision presented in the Levelling Up white paper as a guide.