Subnational bodies: lessons learned from established and emerging approaches

They are pan-regional partnerships that exist to co-ordinate activity with their member local authorities and Government. They follow from the recognition of the importance of building economic and infrastructure strategy around functional economic areas, both at a sub-regional and subnational level.

There are two main types of subnational bodies: economic partnerships and transport partnerships (some of which support each other). The most established economic partnerships are in the Northern Powerhouse and the Midlands Engine, followed by the newly emerging Western Gateway and Oxford-Cambridge Arc. There are subnational transport partnerships covering most of England, but only TfN currently has statutory status.

There are four main policy drivers for these partnerships:

• Closing the productivity gap – the strongest factor driving the initial establishment of the Northern Powerhouse and the Midlands Engine was the need to co-ordinate strategy at pan-regional level to close the productivity gap through investment in infrastructure, skills and innovation
• Devolution – this was underpinned by devolution to Mayoral Combined Authorities (MCA) established around sub-regional functional economic areas, these MCAs could then collaborate at pan-regional level to further accelerate their impact. But just as devolution is incomplete, subnational bodies have also developed ad hoc, rather than coherently.
• Levelling up – the Brexit referendum, along with the unequal impact of COVID-19, has made addressing regional and local inequality a major policy priority, and both MCAs and pan-regional bodies are now focusing on how they can drive levelling up.
• Economic recovery – in the face of the recession that COVID-19 has caused, the number one priority now for subnational bodies is how they can support economic recovery and build back better, working in partnership with MCAs, councils, Local Enterprise Partnerships (LEPs) and Government.

The report identifies several factors which are critical to whether subnational bodies can be successful:

• Economic coherence – subnational bodies needs to have a clear economic geography with good evidence of economic interrelationships.
• Subnational legitimacy underpinned by devolution – empowered local government with strong devolution is key to underpinning the success of subnational bodies.
• Government engagement – is very important to make a reality of the commitment to rebalancing, but in practice this has been variable.
• Scope – clarity on the purpose of collaboration at this level of scale, which should be about additionality.

• Infrastructure – planning and co-ordination
• Internationalisation – trade and investment
• Innovation – collaboration between universities
• Voice – to agree collective prioritie
• Economic data – high quality economic evidence

Because these bodies have developed in a largely ad hoc way, the report identifies several challenges and tensions which they face:

• The need for a clear economic rationale and functional clarity between MCAs and subnational bodies
• A tension between statutory and voluntary aspirations and opportunities
• Incomplete devolution, which can unbalance relationships across the pan region
• The competing dynamics of economic geography vs administrative convenience
• Bottom-up ownership vs Government sponsorship
• How to be an effective pan-regional voice.