Could regional institutions deliver growth for Labour?

Posted on: 11 September 2025 by Ian Wray and Jim Steer in Blog

Ian Wray and Jim Steer discuss whether John Prescott's approach should be revisited.

On economic growth and regional inequality, the late John Prescott hit the ground running. Before Labour took office in 1997, Prescott had developed his ‘Alternative Regional Strategy’ [1]. As soon as Blair was in office, a Regional Development Agency (RDA) Bill was in progress and budgets for the RDAs were being agreed with the Treasury [2].

Despite the recent Cabinet reshuffle, Keir Starmer’s Government still seems up in the air. How can the government secure the growth it needs?

So far, Treasury has apparently decided on more of the same, concentrating infrastructure investment in the wider South East. Rachel Reeve’s speech of January 29^th 2025 [3] advocated major transport investments in the Ox-Cam Arc (Oxford, Milton Keynes, Cambridge), investment in a new lower Thames road crossing, and more runways for London’s major airports. 

The lesson of the financial crash of 2008 was meant to be that the UK can no longer rely on its strength in financial services centred on London; in future it would need a broader economic base. 

In the highest productivity parts of the North such as the ‘Northern Arc’ (Manchester-Cheshire-Liverpool) [4] investment can build on success, South East England style. But tackling the intractable social and economic problems of industrial era towns in remoter locations (like Workington, Barrow and Blackpool) is a different matter. Places like this are the true victims of de-industrialisation, although some retain critical skills in advanced manufacturing. They are isolated, so improving transport connectivity really matters, and they often have large-scale social problems in health, education, literacy, parenting skills, and much else.

What they need is a long-term commitment from the state, perhaps in the form of ‘social development corporations’, able to help turn these towns round over a 20-year timescale. For Labour this surely is becoming a crucial political imperative too: these places need hope and stability before the next General Election.

Back to the regions?

Success more widely across the regions cannot be achieved without some level of public investment. In transport it’s surely no longer wise to rely on mega-projects, with delivery timescales running into the 2050s.

Maybe it is time to reconsider John Prescott’s approach, re-visiting the Regional Development Agencies (RDAs), swept away by David Cameron’s enthusiasm for localism. The evidence is that these institutions actually worked – ‘a breath of fresh air’ it was said at the time – and here’s why.

First, RDAs were business-led, employing expert teams dedicated to making things happen: only the biggest and best of the city regions are able to match this competence. Second, RDAs had substantial and flexible investment funding in a single pot (which the RDA chairs had to fight for). Third, they had a strategic overview, alongside convening and advocacy powers. Fourth, they enjoyed close working relationships with government and local government, as well as the private sector [5].

All that the RDAs had has gone: leadership, expertise, flexible funding, advocacy and convening powers. There is no home any more for a strategic view at regional level, especially for infrastructure.

The government’s more recent commitment to Strategic Authorities (SAs) with directly elected mayors at county level appears to offer a simple solution to the problem of democratic legitimacy [6]. But they’ll need to act together to be of relevance to transport infrastructure plans, operating across the old metropolitan and shire county boundaries. The five counties in the North West for example could convene as the core of a democratic board for new style RDAs. The ‘Sub National Bodies’ have done a good job in the interim, most relevantly, Transport for the North (TfN), that has built an evidence base that should be a valuable asset as SAs move onwards in regional collaborations.     

Prescott’s RDAs lacked a critical ingredient. They missed out on the fast-track planning system enjoyed by Urban Development Corporations and the New Town Development Corporations. But now, working together, the SAs could be given powers for specified purposes such as these, like a roving Urban Development Corporation.

Transport and the regional dimension

Cities have overlapping catchments across much of the North, so infrastructure plans for rail, for example, need to be examined at a broad regional scale, informing plans at the city-region level, and forming part of a joined-up national plan. Most likely, the larger scale investments will be needed anyway in the major cities, which form the regional hubs of the national network and are places where capacity limits are most keenly felt. Addressing the problems in these hubs will spread benefits across the wider regions, with service reliability uplifted and the benefits of ‘south eastern-style’ integrated services and ticketing – a true network approach – brought nation-wide at last.

John Prescott had the need for a strategic overview of the national rail network covered when he set up the Strategic Rail Authority (SRA) [7]. It took a national network perspective but this did not inhibit its commitment to devolution at the time. So, for example, the SRA oversaw the transfer of the Mersey Electrics network to Liverpool city region’s passenger transport authority. 

A change of Secretary of State in the Blair Government, had seen the early abolition of the SRA. Preparation of its route by route ‘utilisation strategies’ continued, successfully passed to Network Rail who have developed them ever since, and these will likely continue in the new world of the (soon to be fledged) Great British Railways (GBR).

But the SRA’s formal examinations of wider policy ambitions a region-by-region basis, were dropped and not replaced. These were designed to set out the wider challenges, opportunities and ambitions, the wider economic development context and the contextual link with business and local authorities. The SRA wanted a two-tier approach to ensure that the rail sector didn’t narrowly pursue self-serving objectives.

Today, instead of validated and joined-up long term plans, rail finds itself buffeted by competing ideas from city region mayors and others.

GBR could benefit from a re-instatement of the approach developed under Prescott, taking for itself responsibility for individual route utilisation strategies, with wider regional aspirations set for it by the relevant Government Departments and the new SAs, acting together to provide the regional planning assessments and development priorities, which have gone missing since Prescott’s day.

For infrastructure investment and economic regeneration, we need to reinvent regional institutions. They are key to securing social cohesion, to raising productivity and increasing growth across the whole of the UK.

Ian Wray is Honorary Professor in Liverpool University’s Heseltine Institute and was Chief Planner, Northwest Development Agency. Jim Steer is a Director of Greengauge 21 and was Strategic Planning Director, Strategic Rail Authority

Image credit: Andrew Skudder, CC BY-SA 2.0, via Wikimedia Commons

[1] Alternative Regional Strategy: A Framework for Discussion, Parliamentary Spokesman Working Group,  September 1982

[2] Regional Development Agencies Act 1998, Chapter 45, London: HMSO

[3] https://www.gov.uk/government/speeches/chancellor-vows-to-go-further-and-faster-to-kickstart-economic-growth

[4] https://www.liverpool.ac.uk/heseltine-institute/blog/therealityofthenorthernarc/

[5] Securing the resurgence of the UK’s provinces – eight lessons from a former Regional Development Agency Mike Shields and Ian Wray, Town and Country Planning, November 2019

[6] English Devolution and Community Empowerment Bill, 2025  https://bills.parliament.uk/bills/4002

[7] A New Deal for Transport: Better for Everyone – White Paper on the Future of Transport, Cm 3950, July 1998; The Strategic Plan, Strategic Rail Authority, January 2002