Economic Development in Britain: A Vacuum in Central-Local Government Relations

Local authority involvement in economic matters has become widespread since the early 1970s. Recent developments in the pattern of local economic activity have been the increasing use of section 137 of the Local Government Act 1972 to fund local programmes, the spread of local authority involvement from the Assisted Areas to the more prosperous regions, and the increasing interest shown by the smaller shire districts, often in rural areas. The portfolio of possible interventions has also changed, bringing a new diversity to the practice of local economic development. Whereas central government has in the past eschewed the temptation to exercise close controls over these activities, the new diversity of local economic initiatives presents it with new dilemmas. It can no longer be assumed that such initiatives will be supportive of central government's spatial or sectoral policies. This vacuum in central-local relations is unlikely to remain, and renewed pressures to grant specific economic development powers to local authorities can be expected. If these claims are accepted, central government will be drawn inexorably into local economic affairs by the need to develop the capacity of local authorities to intervene effectively in pursuit of economic and employment goals.