Government actions can have a major impact on economic growth - locally, nationally and internationally. For example, government can make it easier to access finance, resources and innovation; it can improve workforce skills and competition; create infrastructure and make tax, regulatory regimes and planning systems easier. Growth also depends on many non-government factors, including changing technology and new international markets.
As the factors driving growth are so complex, it's hard to share lessons - as no two situations are the same. However, there are lessons to help government support growth. Growth programmes often need to be coordinated across government. They require careful planning and balancing between the long-term nature of growth and the shorter-term nature of policy decision-making - see also Managing major projects and Environmental sustainability. Although it will always be hard to assess how much growth has been affected by any one action, there are examples of good practice evaluation - which can then be used to plan future activities.
The Department for Business, Skills and Innovation has not used good quality information to decide which science capital projects to invest in to optimise scientific and economic benefits.
The Department for Education should set out the planned overall impact of the programme on productivity and growth.
“Once the downturn was apparent, the Government and the Department for Business, Innovation and Skills were under considerable pressure to act quickly and offer targeted support to businesses. The Department did well to balance the needs of businesses with protecting the taxpayer. However, it did not set out clear objectives, nor did it consistently record costs.
In the current fragile economic climate, the Department should consider the potential impact on business confidence as support begins to be withdrawn. In particular, it should consider action that could be taken to reduce any adverse effects and, if recovery falters, the circumstances in which support might be extended.”
Wave 1 City Deals encouraged cities to develop capacity to manage devolved funding and increased responsibility. It is too early to tell what impact they will have on growth.
Devolution deals to devolve power from central government to local areas in England offer opportunities to stimulate economic growth and reform public services for local users, but the arrangements are untested and government could do more to provide confidence that these deals will achieve the benefits intended
The GREAT campaign enables government organisations to adopt consistent and effective brand management. To date, Cabinet Office has reported a return of £1.2 billion on its £113.5 million GREAT campaign investment. This is based on anticipated as well as actual expenditure by business, tourists and students.
Local authorities have worked hard to manage reductions in government funding, but the DCLG needs to be better informed about the situation across England.
It has not yet been demonstrated that funding mechanisms for supporting local economic growth are capable of delivering value for money.
If the government is serious about increasing its use of small and medium – sized enterprises (SMEs), it will need to focus on those areas where SMEs can deliver real benefits.
The range of government initiatives to help small and medium businesses gain access to finance are not operating as a unified programme.