We cannot allow powers to move too far ahead of the institutions and people required to deliver them effectively, writes the executive director of the Institute for Economic Development.

For those of us who’ve spent years making the case for greater devolution, the government’s current direction of travel should be welcomed.

Giving places greater control over the decisions, funding and interventions that shape their economies is something the Institute of Economic Development (iED) has long supported, and there is much in the Rewiring the State programme – due to be shared in more detail in line with the autumn Budget – that we welcome.

Commitments to more stable, multi-year funding, targeted skills provision and autonomous decision making from those who understand their economies best, reflect changes the iED and our members have advocated for over many years.

But attention now needs to turn from the principle of devolution to the practicalities of delivering it. Because the question is no longer whether government should devolve. It is whether places have the capability to turn those new powers into positive outcomes.

Economic development professionals are the people who turn policy and funding into impact, bringing forward investment, engaging employers, unlocking sites, developing regeneration programmes and connecting national priorities with the needs of local communities.

But as long as economic development remains a discretionary local authority function, that vital expertise will continue to be vulnerable as soon as budgets come under pressure.

As the scale of devolution grows, that contradiction becomes increasingly difficult to ignore. The government’s planned white paper is an opportunity to address that.

The government itself recognises the capacity challenge when it comes to devolution. Rewiring the State promises a blueprint for the capabilities strategic authorities will need and proposes greater interchange between central and local government.

We think that needs to a step go further. The iED has long called for economic development to become a statutory function, with requirements put in place to properly resource the function, and authorities obliged to publish their individual five-year economic strategies.

Local practitioners should have opportunities to spend time in the departments designing policy

A statutory duty would provide a stable foundation for local delivery, rather than allowing capacity to fluctuate according to short-term financial pressures. It should also be backed by the transfer of funding and resources as functions move away from central government.

Additionally, there should be investment in CPD, accredited career pathways and succession planning so expertise is retained rather than repeatedly rebuilt.

Years of under-investment have thinned the economic development profession, and central government does not necessarily hold all the expertise required for local delivery either, which means the government’s plan should be built alongside the profession – those who know best what it needs now to make positive change.

Local practitioners should have opportunities to spend time in the departments designing policy, bringing direct experience of what works, and what does not, into Whitehall.

This is not about protecting a profession for its own sake. It is about creating the accountability, continuity and capability necessary to use devolved powers effectively.

Another important point to address is that giving places the people and skills to deliver is only useful if they are operating within a framework that enables every place to succeed.

When it comes to devolution, areas with already strong tax bases will be naturally better placed to benefit than those starting from weaker economic positions – where, more often than not, intervention is most needed.

What’s classed as success cannot default to aggregate GDP and jobs figures alone

Without mechanisms to address that imbalance, there is a risk that devolution reinforces the disparities it is intended to reduce. The government’s strategy should therefore provide clarity on equalisation, establish multi-year settlements as the norm and ensure funding for good growth can reach varied economies across the UK, not simply places where returns are easiest to demonstrate.

Furthermore, if devolved leaders are going to be held accountable for delivering economic development, what’s classed as success cannot default to aggregate GDP and jobs figures alone.

We need to understand the quality of employment being created; who and how many are accessing new opportunities; where within a place the benefits are being felt; the environmental outcomes being achieved, and more.

Local businesses also need to be part of that process.

Greater control of skills, employment and innovation funding can only improve productivity if interventions reflect the needs of the employers that will ultimately recruit, train and invest. Structured business engagement therefore needs to be an integral part of the machinery of devolution, rather than something that happens around its edges.

This government has made the argument for devolution more forcefully than any administration in decades. The ambition is there and the timetable is demanding.

The risk now is not one of ambition, but of capacity. We cannot allow powers to move too far ahead of the institutions and people required to deliver them effectively.

Rewiring the state cannot simply mean transferring responsibility from one tier of government to another. It has to mean building the local capability to turn that responsibility into better jobs, stronger businesses and genuinely good growth.

The iED now calls on the government to work with us to achieve that, in a way that benefits all.

Nigel Wilcock, executive director, Institute for Economic Development

The Institute of Economic Development recently announced the shortlist for its 2026 iED Annual Awards. Find the shortlist here, and book your space at the upcoming iED Conference which takes place on Wednesday 18 November.