At an unprepossessing retail park on the edge of Rotherham’s town centre, South Yorkshire’s Labour mayor, Oliver Coppard, recently asked his economic advisory council to imagine the bright future he sees.
A new rail link. Thousands of homes. And an abundance of highly skilled advanced manufacturing jobs that could usher in a prosperous new chapter for the surrounding post-industrial area.
Such ambitions are not just important for towns such as Rotherham, but essential to the UK government’s promise to achieve the fastest economic growth in the G7, say those who attended the meeting in early October. Regional mayors are seen in government as crucial to delivering it.
“From my perspective, mayors are the national growth mission,” says Andy Haldane, a former chief economist at the Bank of England who previously chaired the government’s Levelling Up Advisory Council. “There is no national growth without local growth.”
Levelling up — a flagship policy of the Boris Johnson government that promised to reduce regional inequality — has been largely abandoned by Labour. But some economic analysts see the empowering of so-called metro mayors, responsible for areas comprising more than one local authority, as a different route to the same destination.
Downing Street appears to have embraced such thinking. Immediately after his landslide victory in July, Prime Minister Sir Keir Starmer invited England’s 12 metro mayors to Downing Street. They were each asked to draw up a growth strategy and Starmer promised they would get “the support they need to play their part” in boosting Britain’s economy.
Since then, mayors have been identifying priority growth sectors, plus the state interventions and powers needed to support them. This will feed into a national industrial strategy, the green paper for which has already outlined eight priority sectors including advanced manufacturing and life sciences.
But while Coppard and others are drawing up plans — initial proposals are expected in March — the government in Westminster is still finding its feet. Its detailed thinking on infrastructure, housing, skills, energy investment and further devolution remains unclear. Spending plans for most of this parliament will not be laid out until June 2025.
This has prompted warnings from the Institute for Government (IfG) that the efforts of mayors are in danger of stalling unless local and national strategies are “carefully sequenced”. Comprehensive local plans cannot be developed “until mayors and others have more clarity about the government’s broader approach”, the think-tank said last month.
The government’s devolution white paper, due to be published in the coming weeks, is intended to set out a framework for further localised powers. But privately the emerging document has met with a mixed response from mayors. One figure familiar with discussions said the paper represented “progress”, but not a “leap forward”.
Other challenges standing in the way of mayoral administrations, some of which are still in their infancy, include capacity issues and a wider local government system that has been starved of funding for years.
Mayoral growth plans will only work if they are backed with money and capacity from the centre, says Haldane, who is also an FT contributing editor.
“Local growth doesn’t [magically] levitate,” he adds. “It requires financing.”
The story of England’s so-called metro mayors began in Greater Manchester a decade ago.
The area’s council leaders had long argued that they needed more levers in order to close an economic divide with the South East that had persisted since the deindustrialisation of the 1980s.
Conservative chancellor George Osborne, whose seat was in nearby Cheshire, was persuaded. But he demanded that a directly elected figurehead be established, along the lines of London’s mayor, to ensure accountability and provide strong political leadership.
Greater Manchester’s mayoralty, duly created in 2017, has been joined by 10 more metro mayors, largely in regions that have lagged behind on productivity.
Those figureheads, all of whom are currently Labour apart from Conservative Ben Houchen in Tees Valley, have welcomed increased focus and dialogue under the new government. One regional leader notes the “positive” tone of its approach and particularly productive dealings with the newly created Office for Investment.
Meanwhile, Labour’s industrial strategy green paper emphasises the “enormous untapped potential outside the capital” and focuses on the underperforming regional cities that sit at the heart of most English mayoralties.
Rotherham, a steel and former mining town where 28.7 per cent of the working-age population is considered “economically inactive”, is no stranger to the whims of Whitehall policymakers.
The Advanced Manufacturing Research Centre, a successful 20-year, cross-sector collaboration based in a former coalfield, has featured in a succession of growth plans over the years. It is a renowned hub of research and development for companies such as Boeing, working with University of Sheffield experts on cutting-edge robotics, aerospace and nuclear technology.
Yet despite two decades of changing economic strategies, the manufacturing park that houses the AMRC has no rail or tram link connecting it to the area’s employment base.
“Only 1 per cent of the population of South Yorkshire can access that facility within 30 minutes on public transport,” says Coppard, the mayor. This not only disenfranchises local people, he adds. “It holds back growth.”
Mayors hope that their ability to co-ordinate policy locally will enable them to capitalise on opportunities presented by such sites. They “bring to the party detailed knowledge” of their economies, so are better placed to understand what transport and skills are required by investors and citizens, says Dame Diane Coyle, Bennett professor of public policy at Cambridge university.
The same is true of growth sectors such as life sciences and advanced manufacturing, she adds. “The supply chains involved include very specific manufacturing and services,” says Coyle. “People locally know what they are and know what they need from local further education institutions — and that’s what’s missing from national planning.”
Lynda Shillaw has worked in regeneration across northern England for decades. Harworth Group, the property developer of which she is chief executive, built a 3,000-home community around the AMRC.
“You’ve got to think really holistically about how you regenerate sites and how you bring forward the new ecosystem for employment opportunities,” she says, calling metro mayors “crucial” to the government’s national growth mission.
“How can you do that if you’re just doing it from London?”
Shillaw believes more mayors need spatial strategy powers, at present only available to London and Greater Manchester, to plan investment at a high level over decades.
This would allow metro mayors to create a long-term blueprint, mapping out land use for housing and employment, across a broad economic geography.
The idea is expected to be fleshed out further in the devolution white paper. In the meantime, mayors are left with a limited suite of powers and few independent financial levers.
All have been trying to negotiate further powers while drawing up their economic plans. Some are relatively sanguine that the imminent devolution white paper is an incremental step. Others still feel that it lacks the ambition of Starmer’s promise to enshrine devolution as the default option, particularly where skills and fiscal powers are concerned.
“It feels like a white paper the previous government would have happily produced,” says one figure familiar with the emerging document.
Skills powers in particular have long proved a sticking point, with mayors complaining privately about an inability to elicit progress from the Department for Education. Many want the ability to tailor provision for over-16s to the needs of their local labour market.
For business and investors, the matching of skills with investment is critical. “I think the devolved authorities are far better placed to make decisions in consultation with business and education institutions about what skills are needed for the future in each of those regions,” says Robert White, chief executive of the northern law firm Brabners.
White also co-chairs a network of privately owned, owner-managed northern-based businesses called True North, established in 2023. The network was partly borne of “frustration . . . that everything is too centralised”, he says.
In areas such as Manchester, Lancashire and Yorkshire, adds White, further education colleges have been trying to link up with the needs of employers, including at the new Eden Project in the seaside town of Morecambe, an eco-tourism destination in development, and Manchester airport.
“That can’t happen if it’s controlled centrally,” he says of skills policy. “That can only happen at a very regional level.”
In the West Midlands, new Labour mayor Richard Parker is making skills central to his growth plan. “I’m asking for the money to work with businesses to shape the skills system post-16,” he says. The number of young people out of work in some local areas is twice the national average, while a quarter of the workforce have low skills or none at all, Parker adds.
“We’ve got too many people going into college doing courses that don’t always get the jobs businesses need,” Parker adds. “We need to align the investment and skills.”
National skills policy is still being formalised so, for now, it remains unclear exactly what levers will be held where.
“The challenge”, says Coyle, “is figuring out who does what.”
Of all the obstacles in front of mayors, funding remains the elephant in the room.
Former Labour shadow chancellor Ed Balls, speaking on the podcast he hosts with former Conservative chancellor Osborne, said there was “very little” in October’s Budget to show how the government intended to drive growth in cities beyond London.
“How are we going to make those places more connected, more dynamic, more small businesses being created?” he posed.
Mayors will have to wait until the three-year spending review to find out how much the Treasury is willing to finance their visions.
They were relieved to see next year’s transport settlements largely protected in the Budget. But they have bigger ambitions for their networks, including for bus services. Outside London, these have declined steadily since they were deregulated in 1986 and as central grants have been whittled away.
In South Yorkshire the network has shrunk by 42 per cent in the last decade, reducing labour mobility. Like other mayors, Coppard is moving to bring the network back under public control — but improving services is likely to require considerable subsidy.
Fundamentally, mayors do not know how far this Treasury’s tight fiscal envelope will stretch to significant investment outside of the country’s more productive South East.
“Everybody has recognised that high growth is crucial for everything else the government wants to achieve,” says Akash Paun, a programme director at the IfG. “But it’s notable to me that they aren’t really talking the language of closing regional inequalities as an objective in and of itself.”
If the government allocates “scarce resources simply through the lens of return on investment . . . history would tell you that might not lead to allocations to the poorer regions,” he adds.
Many mayoral institutions — some of which were only created in May — lack economic development expertise, according to the IfG. Previous attempts at growth plans often had to be outsourced to consultants due to a lack of in-house capability, says the think-tank.
One interviewee told the IfG’s researchers that this resulted in strategies from different areas looking “nearly identical”, making them “a complete waste of time”.
The government should consider creating a floating resource capability in an existing institution such as the UK Infrastructure Bank, suggested the IfG’s report, and embed experts from the Office for National Statistics locally to ensure robust evidence bases.
Capacity is one of the “fundamental challenges we face”, agrees Coppard. The devolution agenda is “often looked at through the prism of bigger mayoral combined authorities” such as Greater Manchester, where four members of the cabinet — including the deputy prime minister and business secretary — are MPs.
“I always say to government, ‘Now we want the batteries included,’” adds Coppard of his desire for more local fiscal levers alongside additional powers.
The sentiment is backed by other mayors. Liverpool city region, the West Midlands, West Yorkshire, Greater Manchester, South Yorkshire and the North East all want the ability to raise a tourism tax. But so far, to their disappointment, this has not featured in the the forthcoming devolution white paper.
There is some hope in the chancellor’s plan to consolidate the country’s fragmented £354bn local government pension scheme into larger entities better equipped to invest in infrastructure. In a speech at the London Stock Exchange last month, local government minister Jim McMahon said mayors would play a key role in drawing up a pipeline of investable projects.
For Coyle, money is still the “difficult ask” for mayors, after years in which local government has been “starved” of funding. But it will be essential, she says, along with a seat at the table on central policymaking, including on infrastructure and foreign investment.
“It’s a combination of [having] money and a voice,” she says, pointing to the decision to cancel HS2’s northern leg under the last government without consulting metro mayors.
There also remains a need for stronger governance and accountability mechanisms to provide more clarity and assurance over the value of expenditure, believes Coyle.
Nevertheless, Haldane, who went to university in Sheffield, argues that local growth strategies “aren’t the icing” on Labour’s national economic ambitions. “They are the cake.”
South Yorkshire hopes to capitalise on its modern advanced manufacturing expertise. That will be possible, he says, so long as its mayor is allowed the necessary powers, capacity and funding.
“I’m optimistic that all those things can be made good on,” says Haldane.
“But that will require a large-in-scale and [long-term] commitment from government, the like of which we, regrettably, have not had since the second world war.”
