Some movement of local government’s economic role…?

July 8, 2012

As a key commitment within the broader reform of the public service, the recent publication of the draft strategy document on local government’s role in economic development by the Minister for the Environment, Community and Local Government will be welcomed. There may be some concern that, notwithstanding the Programme for Government and the recent decision in the Action Plan for Jobs concerning the alignment of the enterprise boards and local government, the published strategy remains as a draft for consultation but given the likely impact of some of the actions in it on many stakeholders, it was always likely that there would have to be some opportunity for stakeholders to make a contribution to what will ultimately be the overall strategy for economic government at the local level.

As readers will be aware from previous newsletters, one of the central responsibilities in local government systems across the globe is that of economic development. Ireland, in contrast but in line with its disaggregated public service model, operates a range of agencies at local and national level, all of whom have quite defined economic responsibilities. The local authorities in Ireland have therefore tended to act as facilitators in setting the conditions for development through county and city develop plans, development board integrated strategies etc. In more recent years the authorities have tended to take an increasingly pro-active role in direct support of local economic actions ranging from provision of tourism facilities to support for local marketing initiatives, product development and even the provision of investment funds.

This, at times ad hoc approach to economic development has actually resulted in highly innovative actions, particularly when undertaken within a multi-agency context. The work of Chambers Ireland has highlighted many of these examples of not just Irish best practice but also international best practice.

The Programme for Government does however bring the role to a more critical level. Local government will no longer be there in the background to create the conditions but will be expected to take an increasing role in leading economic development at local level. This thinking comes through from the draft strategy. Applying such thinking throughout the system is going to be a big challenge. One of the lessons that could be drawn from the innovation in local government led economic development of the past number of years is that it is not consistent across the system and that the best practice, even highlighted as it is through awards schemes such as the Chambers Ireland Awards, is not necessarily embedded across the system.

There are several reasons for this, differing priorities at local political and managerial level, the lack of resources due to the national exchequer withdrawal from local government funding, the differing physical characteristics of the country which allows some counties to be better positioned in tourism etc.

Nonetheless, given that there are so many really good examples of economic innovation, it is regrettable that the system as a whole did not seem positioned to learn from these examples for general application across the country.

The local government system has a positive track record in the sphere of local economic development. Recent developments illustrating how the economic development role has evolved across the local government sector include:

• Business Support Units / Economic Development Units set up in each county / city council to act as a point of contact for businesses to ensure local authority services and activities contribute to economic development and job creation
• Developing and operating business parks / enterprise centres, addressing infrastructure deficits where these cause particular problems to businesses
• Establishing tourism initiatives / companies to develop and market local tourism products
• Supporting small, medium and large-scale cultural events and festivals designed to attract people to the area, with significant spin-offs for local businesses
• Supporting practical initiatives to respond to business closures having a local impact – for example liaising with employees to assess needs and opportunities, skills sets, providing information supports to those seeking employment elsewhere or who wish to start their own business

The draft strategy in highlighting such examples provides the opportunity to kick start initiative in those authorities which might not have been as forthcoming as some of their counterparts.
In the longer term and given the shake out of local government services, it is critical that local government takes a leading role which the Jobs Action Plan envisages. The draft strategy acknowledges this.

More pointedly this means that real effort will have to be put in place to give effect to the rapid conclusion of the alignment processes between local government and the enterprise boards, the establishment of a close working relationship with the national enterprise agencies and the close out of the alignment with the local development agencies. Clarity in the local institutional setting is now badly required, which ever option the government chooses.

On this it is critical that the forthcoming policy paper on local government reform is specific about the local leadership role for local government. If this is missing any momentum, limited to date as it is, will be entirely lost for another generation of local elected representatives and personnel across all local economic agencies.

In summary and, as highlighted by among others the Local Government Specialist Group of the Political Studies Association of Ireland, the Irish system for supporting economic development ought to be reconfigured so that as the relevant unit of sub-national government local government has the authority and capacity to provide:

• Structural support (infrastructure, information, business support systems/networks)
• Social support system (leadership, business networks, attractiveness & security)
• Incentives (financial-subject to EU competitiveness obligations; marketing)
• Increased capacity for economic development leading to a critical mass in clustering of services, supports and advice
• Bureaucratic processes (efficient, responsive to national standards)
• Policy Integration (coherence between national and local planning and other policy obligations, standards of service provision, monitoring and evaluation, alignment local authority, state agency and development body strategies
• Promotion of innovation and entrepreneurship

Both the final strategy and the policy paper should be clear about the above or otherwise we are looking at yet another wasted opportunity to deliver services and decisions where they are needed: at and with the communities which are crying out for both local leadership and seriously needed economic development.