What now? Economic Development and Brexit
Whether you voted for leave or remain is no longer relevant. When, and possibly even whether, we eventually leave the EU is not even the most pressing problem.
The biggest issue that those involved in economic development are currently facing is the massive uncertainty caused by the referendum result. This has already been manifest in the rapid devaluation of the pound and the drop of all stock market indices in the UK, the rest of Europe and globally, so it’s not just our problem. In the short to medium term jobs will be lost and fewer new jobs will be created, even if growth is recaptured in the longer-term. There are already threats by global financial institutions to move some of their roles to mainland Europe, and inward investment decisions into the UK are being reconsidered. The government and opposition are in disarray and no-one is yet setting out a clear vision for how the UK will prosper outside, or semi-detached from, the EU.
Economic development is very difficult to deliver in times of uncertainty. So, what needs to be done? Here are a few ideas for some first steps in the wake of the decision to Brexit.
Economic forecasts that underpin investment decisions, local plans and economic development strategies will need to be revisited. Rather than focusing on a central scenario it will be vital to consider a wider range of scenarios, including the possibility of the second major recession of the 21st century. This may also have implications on the future requirement for employment land.
Population forecasts that underpin local plans and development strategies will need to be reconsidered. Will net migration reduce? If it does, what does this mean for local workforces? Will there be sufficient workers to satisfy replacement demand for labour and growth demand for labour? Even in a declining economy there will be a need to replace the UK’s ageing workforce. It is important to understand what changes were already factored in to forecasts and projections.
Housing affordability will need to be considered. Will houses become cheaper and therefore more affordable, or will wages drop and so houses become less affordable? What does this mean for an area’s ability to attract and retain workers if they can or can’t afford to live locally?
Economic development strategies will need to be reconsidered. If the UK is going to become a more innovative global exporter, how can local economies tap into this? Which sectors will be more buoyant and which less so? What mechanisms can be drawn upon to fund activity? Public and private sector strategies and action plans will need to be flexible enough to adjust to the range of potential scenarios that might play out?
We can’t tell you the answers to these questions right now, because the situation is changing so rapidly that any attempt to predict the future is fruitless. However, we can work with you to consider a range of future possibilities, and develop a range of responses. You will need to be flexible and responsive to change, and we will be too.