Jo Lappin

Business is key to levelling up


For the government’s levelling up mission to succeed, the voices of businesses must be heard and understood.

Of course public service investment and devolutionary change are essential to the levelling up project, too. But in every community, it is business leaders who will be making some of the most significant and visible contributions.

For they will be raising living standards by training new generations into skilled roles, creating well paid jobs and pioneering new markets, as well as funding the public sector through tax contributions.

If we are to grow the private sector and shrink the productivity gap – which in Cumbria stands 17 per cent below national average — we need to recognise the abundant opportunities that exist today for businesses to grow, and realise that an interventionist approach is required to make sure it is catalysed.

This approach will drive place-based investment that will be critical to democratising the spread of wealth in the UK.

It’s already happening in Cumbria, where we enjoy a balance of beautiful nature that attracts visitors in their tens of millions coupled with established industries — nuclear being one example.

For lots of our businesses, the area is a commercial as well as a social decision. Take, for instance, BAE Systems in Barrow. They’re actively investing in the community and supporting the growth of the town. They know that the attractiveness of where they’re based plays a critical role in attracting and retaining the brightest talent, with the labour market currently fiercely competitive.

Properly supporting businesses to innovate and scale-up is what will make a difference on the ground. Greater market share, new products and expanded services translate to jobs, higher wages and better prospects for delivering levelling up. It’s why the prospect of a green industrial revolution is so exciting to communities in Cumbria, where they’ve seen first-hand the opportunities generated when industries flourish.

Success will be as much about investing in smaller and mid-sized businesses alongside incentivising larger businesses to undertake high end research with Universities. If we are to improve productivity we need to support all of our businesses to innovate, which could also help ease acute labour supply issues.

In Cumbria, we’re tackling this head on by repurposing an existing fund to provide grants to SMEs (small and medium sized enterprises) for innovative projects. It’s a way of giving these businesses the means to take a risk when they might not otherwise. This could happen on a national scale, with increased focus on incentivising businesses to invest in development and the commercial scale-up of ideas.

The approach that we are developing for our grant system will be rigorous and competitive but proportionate to the scale of the investment and streamlined to allow for speedy decisions to help our businesses get on with investing and growing.

Of course, the government has a role to play in addressing the imbalances of the past, one reason the ‘levelling up’ momentum is so welcome. For example, in 2019, the North West received around £177 million of all research and development funding by government departments in the UK, around 6.6 per cent of the UK total compared to its 10 per cent share of the UK’s gross value added. Change on that front will go some way to closing the productivity gap, as will ensuring it’s a coordinated cross-departmental approach, not just one that falls to the Department for Levelling Up, Housing and Communities.

We shouldn’t underestimate the power of big projects. The decision by the government on where to locate the Spherical Tokamak for Energy Production (STEP) fusion facility is one that must be made through the lens of levelling up. Against that backdrop, Cumbria is a compelling contender. The key is collaboration: while the Government holds the reins on the decision-making on streams such as the STEP competition, in Cumbria we’re pushing forward our own clean energy agenda, attracting investors and getting projects off the ground, furthering our standing as a net exporter to the national grid.

But above all, businesses want their voices heard and swift support to the challenges (and opportunities) that they face. It needs transformational behaviour that embraces entrepreneurial spirit. As history has shown, that’s not always easy in public sector organisations, with their structures and regulations. With their ability to be more nimble and responsive, it’s businesses that’ll have first mover advantage when it comes to seizing levelling up opportunities.

If the barriers to business are not broken down, we risk them lacking ownership or clarity in what needs to be a collective mission. Local Enterprise Partnerships were set up to be the conduit between the private and public sector. Today, with changes to roles and remits afoot it is essential that the voice of business remains strong in these new structures. Levelling Up is a social, economic and moral imperative — it needs business to be a strong and equal partner. Otherwise achieving the levelling up challenge will be much harder.


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