‘The size of the prize is huge’
Unlocking higher regional productivity could add £208bn to the UK economy over the next decade, according to the latest Confederation of British Industry (CBI) research.
That’s equivalent to an economy that is 10% bigger than it would have been otherwise.
Productivity is vital for long-term, sustainable economic growth as it is the foundation for prosperity. However, while some parts of the UK have seen world-class productivity gains, too many cities, towns and regions have been left behind, limiting opportunities for millions of families across the country.
The CBI’s new project, ‘Unlocking Regional Growth’, draws on special access to ONS data to identify the four main drivers of regional productivity differences across the UK: Educational attainment of young people at 16 and skills; transport links that widen access to labour; improved management practices; higher proportion of firms that innovate and export.
In the Autumn Statement the Chancellor set out to tackle regional imbalances by pursuing an industrial strategy fuelled by infrastructure and innovation spending. Now the CBI has calculated the potential gain to the UK economy if each local area can increase its productivity at the same rate as the top performer in their respective region or nation.
The size of the prize is huge – £208bn to the UK’s nominal gross value added over the next decade and roughly equivalent to the combined GVA of Wales, Scotland and Northern Ireland. This would lead to more jobs and higher standards of living right across the UK.
To achieve this goal, business and policymakers must work together to place increasing productivity and economic growth at the heart of further devolution efforts. This could include building the right skills across the UK and producing the best opportunities for young people, reduce the numbers of poorly performing schools, improve transport links between cities in the north of England, reduce urban congestion, improve management practices and simplify the number of business support initiatives, and greater government support for firms with the potential to export at a regional level.
Irwin Mitchell is sponsoring the CBI’s regional growth project. Vicky Brackett, CEO of Irwin Mitchell’s Business Legal Services division, said, ‘Increasing productivity across the UK’s economy is a subject Irwin Mitchell is passionate about, particularly as it can drive greater prosperity and ensure all businesses are able to reach their full potential. We are fully supportive of this CBI campaign and welcome their evidence based approach which looks at each region closely and identifies tailored solutions to boosting productivity.
‘There are some significant challenges ahead but if businesses and government can make it a priority and work closely together, then I genuinely believe that economic growth within our regions can be unlocked.’