Councils’ licensing powers seen as key to driving inclusive economic growth

The Local Government Association’s (LGA) latest report A force for growth highlights the pivotal role of councils in enabling inclusive economic growth, with licensing emerging as a critical lever for shaping local economies and ensuring prosperity is shared across communities.

The publication underscores that councils act as “growth facilitators” by creating the conditions in which businesses can thrive. Licensing is central to this role: from alcohol and taxi regulation to planning permissions and event licensing, councils use these powers to balance economic opportunity with public safety, community wellbeing, and fair competition. By exercising licensing functions, councils help ensure that growth is not only dynamic but also inclusive, reflecting the needs of residents and local businesses alike.

Licensing as a growth enabler
Licensing regimes allow councils to manage the local environment in ways that attract investment and support innovation. For example, streamlined licensing processes can encourage new enterprises in hospitality, leisure, and retail, while proportionate regulation ensures that established businesses can expand without undue barriers. The report stresses that councils’ ability to shape transport, energy, and digital infrastructure is complemented by their licensing powers, which directly influence how local economies function day-to-day.

Balancing growth with community priorities
The LGA notes that licensing is not simply about regulation but about convening stakeholders and setting standards that underpin trust and sustainability. Councils act as democratic leaders, ensuring that licensing decisions reflect community priorities—whether safeguarding health, promoting cultural vibrancy, or supporting small businesses. This balancing act is vital to inclusive growth, as it ensures that economic expansion does not come at the expense of social equity or local identity.

Unlocking untapped potential
The report identifies £276 billion of untapped economic opportunity across England, much of which depends on councils’ ability to remove local barriers to growth. Licensing frameworks are highlighted as one of the mechanisms through which councils can unlock this potential, particularly in non-devolved areas where councils remain the primary source of economic leadership. By modernising licensing systems and aligning them with local industrial strategies, councils can catalyse investment and innovation in sectors ranging from hospitality to professional services.

Recommendations for reform
To maximise the role of licensing in inclusive growth, the LGA calls for sustainable funding, greater fiscal flexibility, and improved collaboration across tiers of government. It argues that licensing should be embedded within Local Growth Plans, ensuring that regulatory frameworks are not treated as isolated functions but as integral to wider economic strategies. Councils in non-devolved areas, in particular, need targeted support to strengthen their licensing capacity and influence regional investment decisions.