National devolution and growth depend on business and talent

National devolution is the cornerstone of the new administration’s growth agenda, yet its success will depend on backing business and talent.

As Downing Street prepares to welcome another prime minister, the UK business community finds itself asking a familiar question: can this new administration break the cycle of political volatility and provide the stable environment needed for long-term growth?

Political short-termism at a national level has long acted as a drag on our economic potential.

In contrast, after decades of consistent leadership in Greater Manchester, most recently under the leadership of Andy Burnham, the city region has proved what can be achieved when political leaders are given the space to think and act in decades rather than deadlines.

To his credit as mayor, Andy Burnham has built on what went before and has overseen an innovation economy that is growing at twice the national average, powered by the consistency of long-term thinking and building strong ties with local businesses.

The Manchester model demonstrates that devolution can double the growth rate of an innovation economy compared with the national average, and a key test of the new administration will be whether the model can be replicated nationally. In particular, by re-engaging with the business community and creating the environment for it to unlock “good growth” from the ground up.

Investing in northern potential

In that sense, decentralising decision-making away from Whitehall is only the first step. To make devolution work on a national scale, the new administration must look beyond bureaucracy and put scaling, owner-led businesses at the heart of its strategy.

In the north alone, these businesses contribute £114 billion to the UK economy and are growing at an average rate of 8.5 % annually. Regional growth depends on providing these enterprises with the support they need to continue scaling, creating local jobs and drawing in fresh investment.

We can see this working successfully already in Liverpool and Manchester, where funds are aligned with growing sectors. The Invest LCR Partnership in Liverpool, for example, has a pipeline of £11 billion dedicated to growing health and life sciences. Meanwhile, Greater Manchester’s £50 million commitment to AI and advanced materials is actively creating the high-value jobs of tomorrow.

Bridging the national skills chasm

But to truly maximise the opportunity, an urgent first step must be taken in parallel, to address what is increasingly becoming a chronic skills shortage.

The Milburn Review recently found that young people not in employment, education or training (NEET) costs the UK economy £125 billion annually in lost taxes and welfare, while the talent inherent in nearly a million young people remains untapped. This crisis is compounded by a 40 % decline in youth apprenticeships over the last decade, leaving over a quarter of all vacancies unfilled due to a lack of relevant talent.

As AI adoption accelerates, the disconnect between modern employer needs and traditional education will only deepen. Policy alone will not address this, and while we need private partners and growing businesses, who make up 60 % of all private sector employment, to bridge the gap, they equally cannot navigate the fragmented skills market alone.

We need greater alignment between the skills and attributes these businesses need. Those are developed through traditional forms of education; better support in connecting the right talent with real-world, accessible opportunities; and greater government incentives that lower the financial and administrative barriers for providing training opportunities.

Partnering with grassroots organisations can help build this alignment, with respective business communities being well placed to provide mentoring and valuable training opportunities alongside the school or higher education curriculum , within their local communities.

This is a key focus of the Brabners True North network, illustrated by insights from our recent roundtable discussion with business leaders.

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