The likely impact of Brexit
The choice made by UK citizens to leave the European Union means that local areas are tasked with thinking about how and where the country’s membership of the EU directly effects their local economies, and what the impact of leaving might be within that. To support places, in 2017 the Centre led a major programme of work focusing in on 10 local authorities with diverse local economies to help those individual areas understand the impact Brexit is likely to have, and to consider how they might prepare and respond with more effective policy. The conversations and analysis also offers lessons for other UK LEPs, local authorities and combined authorities, and the following briefing sets these out.
The project was supported by LSE’s Knowledge Exchange and Impact fund and we worked together with colleagues from Birmingham, West of England LEP, Cambridge, Enterprise M3 LEP, Hull, Leeds, North East LEP, Peterborough, Preston, and Sheffield to do just that.
Below you can download the full briefing outline the project and its findings.
Using our evidence reviews and toolkits to respond to Brexit
Given our focus on local economic growth, we place particular emphasis on outcomes that most directly capture change in a local economy: wages, employment, and productivity. There are, of course, many other important ways in which places differ – in terms of the quality of life that they offer and the cost of living, for example. But, ultimately, if a local economic growth policy is not having a positive effect on wages, employment or productivity it’s pretty hard to claim that it is improving local economic performance. That is why this is the main remit of the Centre.
This is not a recipe book. Local context matters and local objectives differ. But areas that are aware of the evidence we present here will be better placed to design cost-effective local interventions that can help drive local growth and better respond to Brexit. We certainly do not know all the answers, and a key message that emerges from our work is that we need to do more to understand policy effectiveness and to improve the use of evidence in policy making. This is true for many policy areas, but especially important for local economic growth, because on the basis of existing evidence too many schemes have no, or only modest, measurable impact on policy objectives. We need more piloting and testing to better understand what works, where and for whom.
Improved policy design is key to raising both success rates and improving cost-effectiveness. The online reviews and toolkits listed below will be of use to local policymakers when thinking about how to respond to the impact of Brexit.
Skills policy is an important way to support individuals and businesses in responding and adapting to the changes that Brexit is likely to bring to labour markets. In the UK, area level differences in skills are the most important factor driving differences in local economic performance.
Employment training programmes for adults can have a positive, although modest, impact on earnings and employment.Employment training
Apprenticeships can improve young people’s prospects of earning better wages and securing long-term employment.Apprenticeships
What is it and what does it aim to do? Careers counselling can help individuals choose the most appropriate training.Careers counselling
Places will need to respond to the changes in trade patterns brought about by Brexit by helping firms adjust and take advantage of new opportunities. As discussed above, in the UK, area-level differences in skills are the most important factor driving differences in local economic performance. But, even if we could equalise skills across areas, disparities would persist because of area-level differences in productivity.
Business advice can help improve firm performance, particularly firm productivity and output.Business advice
Access to finance programmes are business-focused interventions that can help improve firm performance.Access to finance
Support for innovation, including tax credits and grants, loans and subsidies can have an impact on activity, but effects are not always positive.Innovation