Preparing for Brexit

We had our first workshop on potential implications of Brexit last week. LSE’s Knowledge Exchange and Impact fund has given us a grant to work with ten places who have volunteered to collaborate – Birmingham, West of England LEP, Cambridge, Enterprise M3 LEP, Hull, Leeds, North East LEP, Peterborough, Preston, and Sheffield. We will spend the next six months working with them to hone our thinking about how the macroeconomic changes caused by leaving the EU will impact specific local economies, and what they might do to prepare and respond.

We focussed on three aspects of cities’ relationships with Europe which our initial analysis (led by Naomi Clayton) suggests will be most important: trade, labour , and investment, read her blog introducing the project last week. Naomi described how different local economies might be more or less vulnerable to each factor – as detailed in Centre for Cities’ Outlook last month, impacts will vary greatly between cities. For example, Bristol is particularly dependent upon the EU as a market for its exports. Some places are potentially vulnerable to one dominant EU based firm. And while loss of EU labour would affect a city like Cambridge by cutting into their high-skilled specialists, Peterborough would more likely suffer from a shortfall in labour to fill low-skilled jobs.

We also discussed the adjustments that will likely take place over the medium term. For example, a reduced pool of highly skilled EU migrants in the UK might mean that Bristol and Cambridge lose even more of their specialists to London. The uncertainty of exactly how Brexit will be implemented along with the complexity of the UK’s relationship with Europe means that predicting how each city will fare over the medium and long term is fraught with difficulty. As ever, we expect that those places with more diversified economies will be the most resilient.

Our goal isn’t prediction for prediction’s sake. We want to use this analysis to develop good policy responses to Brexit for local authorities, responses which are realistic in their ambitions and work with the powers that they have to hand. For each place, seeing themselves in context highlighted how they should be thinking about a policy response. Targeting interventions to the most pressing local needs, and building responses that are based on approaches that the evidence shows can work should be the first order of business.

The group will be looking at how Brexit gives us opportunities to combine experimental approaches with robust evaluation to make sure that programmes are working in the way intended. This will include looking for timely indicators of change within local economies to allow targeted support to areas that need it. Ultimately we hope tracking the impacts of Brexit and policy responses will contribute to the base of evidence of what works.

The massive changes coming over the next few years will be unsettling for policy makers, businesses, and workers. Rarely is such a major upheaval flagged up so far in advance, and currently uncertainty is the biggest challenge. We hope that this group will be able to bring some focus to the picture for local government. And we will make the most of this upheaval to try new approaches and learn 

By Meg Kaufman

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