Growing Pains!

Psst…fancy some growth? How about a dose of industrial strategy or even local government reform? Ok, what about some devo then? Writes Marketing Derby’s managing director John Forkin.

The Whitehall policy wheels are whizzing and there is no doubt we are living through challenging times, especially internationally, there’s much disruption afoot and worrying change on the agenda.

Suddenly, an uptick in something which can feel intangible to many – economic growth in GDP – has become the panacea for future prosperity.

The new Labour government has pretty much bet the bank on raising growth in the UK. This is brave to say the least, as growth (and associated productivity) has pretty much flatlined since the 2008 financial crash.

We are currently bumping along near to zero and I guess a credible target, one that really could make a difference to our national prosperity, might be something like 3%.

Most people would welcome this, though it is worth remembering that the last time (out-with of the Covid recovery) that we hit the heady heights of 5% was way back in 1988.

In truth, growth don’t come easy.

So, what might be the key ingredients to drive that laudable ambition and how can places like Derby play a role in helping make it happen?

My starting point is recognising that the financial crash of 2008 is still reverberating today.

We all know about the Wall Street crash of 1929 with its scary imagery of workless on the streets, the onset of the Great Depression and the eventual descent into the horror of World War 2.

2008 didn’t feel like that, even though GDP sunk to a dark minus 4.8%.

Yes, we remember the city types being marched out of their glass office towers with their ubiquitous cardboard boxes of possessions but trans-national government and central bank action – most especially the creation of money channelled through bailed out banks – shielded most of society from the worse possible ravages of decline.

My belief is, that although we avoided the short sharp shock of depression, the pain of 2008 instead became a malignment spread over many years and is still being felt today.

In post-2008 UK, there seemed no political bandwidth for long-term thinking as governments wobbled from austerity, through Brexit and Covid – as Prime Ministers came, and Prime Ministers went.

A new Labour government was elected in July 2024 and whilst its ambition to ‘fix the foundations’ hardly had people dancing in the streets, there was a sense that maybe the time had come put a foot on the ball and think calmly about how to transform government to deliver the promise of growth.

This is not to deny some of the obvious difficulties and missteps (most especially the gloomy early narrative, winter fuel payment and employers’ National Insurance issues) but surely one advantage of a thumping (148 seat) majority is the ability to think and act big and most especially, to consider long-term structural reform.

Having said that, we live in inpatient times, many people have little care for the long-term and its promise of ‘jam tomorrow’ (a Heathrow third runway by 2035 anyone?). Short and medium-term actions that people can touch and feel are essential too.

Which brings me back to the role of places, such as Derby, in delivering the ingredients and recipe for growth.

Growth is both a top-down and bottom-up challenge.

National policy has very much focused on policies such as building more houses (targeting 1.5 million new homes in 5-years), modernising planning (no more £100m bat tunnels) and accelerating devolution (creating strategic authorities and Mayors).

Cities like Derby – and regions like the East Midlands – are essential building blocks for growth. Yes, national policy can set the framework but real action happens not in the corridors of SW1 but in the offices and shop floors of real companies.

One of the pleasures of working for Marketing Derby is the daily experience of being with businesses, whether investors or bondholders. Their real-time experience of creating and sustaining jobs, through thick and thin, is nothing short of inspiring.

Our City Lab in the Derbion has been an astonishing success, attracting many thousands of Derbeians to experience and engage with their city of the future. 

In the past few weeks the Lab has hosted Bondholders in a briefing sessions and a focus group for the Royal Society of the Arts (RSA’s) work on the Inclusive Growth (that word again) Commission being carried out for the East Midlands Mayor.

The businesses in those Lab sessions retailers, manufacturers, health, services, marketing, leisure, tech, IT and environmental – all with common purpose of passion for both place and business. Therein lies the petri-dish for growth.

I’m a big fan of devolution and for some time I’ve felt the UK’s obsessive centralisation (and in particular the micro-management of the Treasury) to be a drag on growth.

The creation of strategic authorities and Mayors – ours being the East Midlands County Combined Authority (EMCCA) – has to be a positive development. Their success will be contingent on two things; wrenching significant powers and resources from Whitehall (being more than government’s regional banker) as well as being fleet of foot in harnessing local entrepreneurial energy – in business and communities – and tackling market failure (regeneration).

It’s true that the creation of EMCCA adds a costly third tier to local government and so the plan to reform that structure by abolishing the bottom (district) tier is laudable, as long as the new unitaries are truly connected with place.

The challenge for EMCCA will be one that adds true value via regional actions whilst supporting the principles of subsidiarity and place.

In the world of inward investment, this means new regional-wide activity that is currently missing (most especially drawing down on government resources such as in the work of the Department for Business and Trade and the Office for Investment) and supporting local place-based initiatives, such as that of Marketing Derby.

The decision to award £300k for the next financial year (which we will match with Bondholder income bringing £600k into Derby’s place-shaping inward investment work) is a very welcome start as we believe that inward investment is a crucial component of growth.

Derby is a very special city, one that continually punches above its weight economically. Our leading role in sectors such as aerospace, nuclear and rail is of global significance.

We welcome the challenge of change and believe we provide the perfect platform for contributing to regional and national growth.