Local Power, National Mission: Lessons for Local Government Leaders Driving Economic Growth

Economic growth is often framed as a national endeavour shaped by Treasury decisions, infrastructure strategies, and central government reforms. But in reality, the places where growth happens are local. Councils sit at the heart of this challenge, tasked with translating broad ambitions into tangible outcomes for communities. Yet the question remains: Are councils truly equipped to deliver economic growth in a way that is meaningful, inclusive, and sustainable?

In a recent episode of Truth About Local Government, we sat down with Joe Fyans, Head of Research at Localis, to explore this very question. Our conversation was both provocative and practical, cutting through the noise to examine what economic growth really means at the local level and what it demands of those leading it.

Joe brought a wealth of insight from Localis’ research into place leadership, community empowerment, and the evolving role of councils in shaping economic futures. Together, we unpacked the tensions between national policy and local ambition, and surfaced lessons for senior officers and elected Members who are navigating this complex terrain.

This episode wasn’t just a discussion it was a call to action. For those in local government who want to move beyond reactive service delivery and become architects of thriving, resilient places, the insights shared offer a roadmap for rethinking growth from the ground up.

1. Two Competing Visions of Growth

Joe began by distinguishing between two conceptions of economic growth:

• The Government’s agenda, focused on planning reform, infrastructure acceleration, and institutional overhaul exemplified by the Planning and Infrastructure Bill and the 10-Year Infrastructure Strategy, which together aim to unlock 1.5 million homes and 150 major infrastructure projects by 2030.

• Localis’ perspective, which emphasises placemaking, environmental quality, and community wellbeing a “whole place” approach that prioritises lived experience, preventative investment, and collaborative service design.

“The government's view is about planning and infrastructure,” Joe explained, “but our view is more about placemaking and the quality of environments. Councils' ability to provide and regulate that is crucial.”

This tension between top-down infrastructure delivery and bottom-up community development is more than philosophical it’s structural. Councils are increasingly equipped to deliver on the former, thanks to reforms and funding tied to national priorities. But they remain poorly resourced for the latter, with placemaking and wellbeing initiatives often reliant on fragmented, competitive, or short-term funding streams.

Even with new programmes like the £1.5 billion Plan for Neighbourhoods, which offers up to £20 million per area over a decade for regeneration and community-led development, the ability to foster holistic, place-based growth remains constrained by fiscal pressures, workforce capacity, and the legacy of austerity.

Lesson: Councils must define their own vision of growth one that resonates locally and goes beyond infrastructure to include the lived experience of residents.

This means:

• Embedding placemaking into economic strategy, not treating it as a soft add-on.

• Leveraging community power through co-design, local partnerships, and inclusive engagement.

• Advocating for funding reform, so that preventative and wellbeing-focused initiatives are valued alongside capital projects.

The Local Government Association recently estimated that councils could unlock £276 billion in untapped economic potential if empowered to tackle place-specific barriers to growth. But doing so requires more than ambition it demands a rebalancing of national-local priorities, and a recognition that growth is not just about GDP, but about pride, purpose, and possibility in every place.

2. Uneven Capacity Across the Sector

Joe highlighted a growing divide in local government capability:

• Mayoral Combined Authorities (MCAs) are accelerating, empowered by strategic powers, devolved budgets, and direct access to central government. These authorities are increasingly able to shape long-term economic strategies, attract investment, and deliver major infrastructure projects.

• Other councils, especially those undergoing Local Government Reorganisation (LGR) or operating in non-devolved areas, face resource scarcity, leadership churn, and institutional instability. Many are still adapting to new governance models and funding mechanisms, which can stall progress and reduce their ability to engage with national policy agendas.

Joe described this as a “Matthew Effect” where those already equipped continue to advance, while others fall further behind. According to the Local Government Association, non-devolved areas represent at least £77 billion in untapped economic potential, equivalent to 12.6% of their local economic output. This figure underscores the opportunity cost of uneven devolution and the urgent need for inclusive growth strategies.

Lesson for Directors of Growth: To succeed in this landscape, Directors must become architects of strategic capacity. This means:

• Leveraging partnerships with universities, anchor institutions, and the private sector to supplement internal capability.

• Building coalitions across neighbouring councils to share expertise and resources.

• Advocating assertively for fairer devolution settlements and investment in under-resourced areas.

• Investing in leadership development and organisational resilience to weather structural changes.

Even in constrained environments, Directors of Growth must act as convenors, storytellers, and system leaders ensuring their place-based ambitions are not lost in the noise of national policy or overshadowed by better-resourced peers.

3. The Hidden Barriers to Growth

Joe pointed to a set of overlooked obstacles that quietly undermine local economic development efforts:

• Fragmented funding streams: Councils often rely on short-term, competitive grants with differing criteria and reporting requirements. This patchwork approach creates inefficiencies and limits strategic planning. The LGA has called for reform, noting that councils must navigate over 300 separate grants, often requiring up to 90,000 pages of documentation.

• Poor enterprise architecture and tech integration post-LGR: Following reorganisation, many councils inherit legacy systems that don’t communicate well. This leads to data silos, duplication, and a lack of real-time insight. The LGA’s 2025 report stresses that successful councils are those that challenge legacy systems and invest in scalable infrastructure.

• Basic service failures: Issues like missed bin collections and unmanaged fly-tipping may seem minor, but they erode public trust and civic pride. Joe warned:

“You can repurpose a High Street, but if bins aren’t collected or fly-tipping is rampant, it draws down on the benefits of regeneration.”

This isn’t just anecdotal. According to Smart Cities Dive, trust in local government has dropped eight points in the last three years, with leaders now citing it as the biggest issue facing councils even more than funding deficits. Meanwhile, the LGA’s digital infrastructure review found that over 60% of councils cite digital infrastructure as a major barrier to transformation, while 9 in 10 councils are facing increased demand for core services.

Lesson for Directors of Growth: Economic growth is built on operational credibility. Directors must:

• Champion investment in neighbourhood services to ensure visible, everyday improvements that build public confidence.

• Push for digital transformation that integrates systems, improves data quality, and enables smarter decision-making.

• Treat service reliability as a strategic asset, not just a delivery function because the success of regeneration depends on the public believing in the council’s ability to deliver.

Growth isn’t just about big projects. It’s about creating places where people want to live, work, and invest and that starts with getting the basics right.

4. Investment Zones: Potential and Pitfalls

Joe was cautiously optimistic about the potential of Investment Zones (IZs). When strategically located in areas with existing economic activity, infrastructure, or sectoral advantage they can act as accelerators for growth. But when poorly placed, they risk simply displacing activity rather than creating it.

“They work best as part of a package,” Joe said. “If you put one in an industrial park, it might just shift activity from one part of the Midlands to another. But in city centres, they can be transformative.”

This concern is backed by research from the What Works Centre for Local Economic Growth, which warns that deadweight and displacement effects are real risks. If firms were already planning to invest or relocate, the incentives may simply subsidise existing behaviour rather than stimulate new growth.

According to the Spring Budget 2023, each Investment Zone in England will receive £80 million over five years, split between tax incentives and targeted interventions. Zones are expected to focus on high-potential sectors like green industries, life sciences, digital tech, creative industries, and advanced manufacturing. However, a National Innovation Centre for Rural Enterprise (NICRE) report found that the current IZ model has limited applicability in rural areas, where infrastructure and sectoral clustering are weaker. Without adaptation, rural economies risk being left behind.

Lesson for Directors of Growth: Use Investment Zones to amplify existing strengths, not as a one-size-fits-all solution. Urban centres with strong transport links, research institutions, and sectoral clusters are best positioned to benefit. Councils should:

• Conduct displacement risk assessments before proposing IZ locations.

• Align IZs with local growth plans and sectoral strategies.

• Ensure community engagement and transparency in site selection.

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5. National Strategy: Coherent but Vision-Lite

Joe described the national growth strategy as coherent in structure focused on simplifying funding, fixing infrastructure bottlenecks, and crowding in private investment. But he noted a critical gap:

“It’s a strategy, not a vision. Growth for what reason? That’s where councils must step in.”

This critique echoes findings from the UK Growth Survey 2025, which polled over 100 economists and policy experts. While many supported the government’s focus on infrastructure and planning reform, they warned that the strategy lacks a compelling narrative about the purpose and direction of growth.

The National Security Strategy 2025 also links economic competitiveness to national resilience, but again, it’s light on how local places fit into that picture.

Lesson for Directors of Growth:Councils must fill the vision gap. Use corporate plans, local plans, and skills strategies to articulate:

• What growth means for your place.

• Who it benefits.

• Why it matters socially, economically, and environmentally.

This is not just about economic metrics. It’s about place identity, community wellbeing, and long-term resilience. Councils are uniquely positioned to define and deliver that vision.

6. Community-Led Visioning

A strong local vision must be rooted in meaningful community consultation. Joe cited Wigan and Preston as examples of councils that have successfully embedded inclusive growth strategies by listening first and building around what matters locally.

• Wigan’s “Progress with Unity” strategy emerged from a borough-wide engagement exercise that built on the legacy of The Deal. It prioritised tackling inequality, improving basic services, and fostering collaborative relationships with residents and the voluntary sector.

• Preston’s Community Wealth Building model has gained national recognition for its focus on local procurement, cooperative development, and fair employment practices all shaped through sustained community dialogue.

“Listen first,” Joe advised. “Understand what matters locally whether it’s skills, housing, or public services and build your strategy around that.”

This advice is backed by a Localis survey, which found that 72% of residents feel disconnected from local economic planning, highlighting a widespread perception that decisions are made by “the usual suspects”.

Lesson for Directors of Growth: Engage residents early. Understand their priorities whether it’s housing affordability, skills, or public services and build your growth strategy around them. This means:

• Using citizen assemblies, online platforms, and local forums to gather input.

• Ensuring diverse voices are heard, especially from underrepresented groups.

• Translating community insights into actionable priorities within corporate and local plans.

Community-led visioning isn’t just good practice it’s essential for legitimacy, trust, and long-term success.

7. Public Services as the Foundation

Joe concluded with a powerful reminder: public service delivery is the foundation of any credible growth strategy. If basic services are failing, residents won’t buy into grand visions no matter how well-funded or ambitious.

“You can’t talk about transforming the area if people are still struggling with the basics,” he said. “Public services must be laser-focused and efficient.”

This is echoed by the Association for Public Service Excellence (APSE), whose polling shows that three times as many people trust their local council (51%) over central government (15%) to make decisions about local services. However, trust is fragile and basic service failures like missed bin collections or poor housing maintenance can quickly erode it. The Local Government Association also emphasises that councils are uniquely positioned to deliver place-based leadership, improve social mobility, and foster community cohesion but only if core services are functioning well.

Lesson for Directors of Growth: Before talking about transformation, ensure your council is delivering high-quality public services. This builds trust and creates the platform for meaningful engagement. Directors should:

• Prioritise operational excellence in frontline services.

• Use performance data and resident feedback to drive continuous improvement.

• Treat service delivery as a strategic enabler, not just a statutory obligation.

Growth begins with credibility and credibility begins with getting the basics right.

Final Thought: Growth That Serves People

Growth for growth’s sake isn’t enough. In local government, the pursuit of economic development must be rooted in purpose not just metrics. Councils must ask themselves a deeper question: What does success look like for our residents? Is it more jobs, better transport, and increased investment? Or is it safer streets, stronger communities, and a sense of pride in place? Defining a local vision of success means moving beyond national targets and embracing what matters most to the people who live, work, and raise families in our towns and cities. It means:

• Investing in the basics clean streets, accessible services, and safe public spaces.

• Engaging communities not just consulting them, but co-creating solutions and empowering local voices.

• Measuring what matters wellbeing, belonging, and opportunity, not just economic output.

Councils that lead with this mindset can shape places that thrive economically, socially, and emotionally. They become more than service providers; they become stewards of local identity and ambition. If you’re a senior officer or elected Member, I hope this reflection helps you navigate the challenges and opportunities ahead. And if you’re interested in the research Localis is doing to support this shift in thinking, I strongly recommend reaching out to Joe Fyans directly. His work offers not just analysis, but inspiration for those ready to lead with vision and courage.

This blog post was sponsored by Alliance Leisure, the UK's leading leisure development partner, specialising in supporting local authorities to improve and expand their leisure facilities and services. Click the logo above and check out their website and services.onsored by Alliance Leisure, the UK's leading leisure development partner, specialising in supporting local authorities to improve and expand their leisure facilities and services. Click the logo above and check out their website and services.