Within weeks, Andy Burnham will walk into Number 10 carrying a plan for the biggest rebalancing of power in Britain’s modern history. On the diagnosis, almost everyone now agrees. Britain is one of the most centralised economies in the developed world. But buying into the cure will be harder.
The basic case for devolution is that local people understand local conditions, so decisions taken nearer the ground will be better. There is something in this. Friedrich Hayek built much of his life’s work on the insight that the knowledge a society runs on is never held centrally but exists only as the particular circumstances of time and place, dispersed among the people actually on the spot. Whitehall cannot know what a mayor in Wolverhampton knows.
But knowing more is not the same as being made to act on it.
What makes the private sector work is not that entrepreneurs are wiser than mandarins. It is that competition, profit and loss, and the possibility of failure force a kind of discovery that no amount of cleverness can deliver. Give places the freedom to try different things, to keep the upside when they succeed and bear the cost when they fail, with voters and mobile investment standing in for the market. As Ryan Bourne argues in The Times this week, the postcode lottery is “a feature, not a bug”. A devolution that can’t tolerate a postcode lottery isn’t really devolution at all.
Mann Virdee, our Head of Science and Tech, set this out in our APPG for Entrepreneurship’s latest newsletter:
“There are really two kinds of devolution on offer. One hands money in the hope that local knowledge makes for better decisions. The other lets places keep the proceeds of growth — and bear the consequences of failure. Only the second changes incentives, and it is the harder sell. Letting places keep the proceeds of growth also means letting them diverge, and fears of a postcode lottery are the likeliest barrier.”
Charles Tiebout argued in 1956 that where people can move between jurisdictions, choosing the mix of taxes and services that suits them, local governments face something close to a market. Gabriella Montinola, Yingyi Qian and Barry Weingast went further, describing a system in which competition between regions for people and capital disciplines governments into behaving, and which they credit with a good deal of China’s growth.
Blöchliger’s work for the OECD finds decentralisation — and genuine tax autonomy rather than mere spending freedom — positively associated with GDP per capita, on the order of a few percentage points for a doubling of the local share. It is, however, a small and contested literature, so to some extent we’re relying on first principles here.
Of course, failure has its limits. When a firm fails, its customers walk away at no cost; when a region fails, most of the people living in it cannot simply leave, and would not want to. Exit is sticky. The evidence from Scotland’s divergent income-tax rates is that migration responses have been small.
But just because it’s not a pure market doesn’t mean it’s not better than the status quo. We are already bearing the brunt of failure. The levelling-up years were wasteful and dispiriting. Councils spent around £30,000 a bid to compete for grants from central government, with roughly three-quarters of them rejected, in what the Public Accounts Committee heard described as a “begging bowl culture”.
Local experimentation will uncover more of what works, voters and investors will back success, and over time good governance will be copied. There is no discovery without the divergence. If Number 10 North is to mean anything, it means letting Wolverhampton and Wakefield make different choices and reach different ends.
There’s more to The Entrepreneurs Network than a weekly email. A lot more.
First and foremost, if you’re not already a Member — which is free — sign up here. We now have thousands of founders in the network and this helps us direct things your way that you’re interested in.
Second, we send a weekly email inviting recipients to share events, competitions, programmes and surveys in the News and Views section below. If you run things like this, let us know and we will add you. And if you’re a particular fan of an organisation’s work, direct them towards this opportunity. This email goes out to over 13,000 people every Friday and we don’t charge for this.
Third, I have a fortnightly email where I share opportunities to partner with us. Sometimes this is sponsorship, but other times we’re just looking for a space to host us. We also include occasional requests from our Advisers so it can lead to interesting collaborations between entrepreneurs, corporates and charities. It’s a way of solving the coordination problem that afflicts the entrepreneurial ecosystem in which we all operate.
Finally, Advisers get a weekly opportunities email where I extend invitations to exclusive events, media opportunities and updates on our work well before it hits the press. This isn’t free, but the opportunities far outweigh the cost of joining. Find out more here.
On the topic of Advisers, David Herbada has joined us. David is an operator-investor and venture builder working at the intersection of deeptech, health innovation, AI and entrepreneurship.
Over more than 25 years, he has helped translate complex scientific and technological innovation into investable, governable and scalable companies. He is a Venture Partner at Zinc, where he supports science- and technology-led ventures across health, deeptech and medical devices, and a Founding Partner at Fikra Ventures, an AI-native venture studio focused on building technology companies around complex real-world problems.
David supports The Entrepreneurs Network for exactly the same reason we started it. He believes entrepreneurship is one of the most effective mechanisms for turning innovation into long-term economic and societal progress. Maybe you do too?
No Agenda Breakfast: Evelyn Partners
🗓 Thursday, 23 July 2026
🕐 08:45 to 10:00
📍 The City, London
ℹ️ Join us for coffee, pastries, and honest conversation with a dozen entrepreneurs — no agenda, no pitches and no panels.
⏩ Request a place
No Agenda Breakfast: Talking Tables
🗓 Thursday, 27 August 2026
🕐 08:45 to 10:00
📍 Stockwell, London
ℹ️ Join us for coffee, pastries, and honest conversation with a dozen entrepreneurs — no agenda, no pitches and no panels.
⏩ Request a place
APPG Evidence Session: Entrepreneurship in Financially Excluded Communities
🗓 Wednesday, 2 September 2026
🕐 17:00 to 18:00
📍 Online
ℹ️ An evidence session for the All-Party Parliamentary Group (APPG) for Entrepreneurship, on how the UK can better support entrepreneurs from financially excluded communities — chaired by Lord Kamall.
⏩ Request a place
Quarterly Adviser Roundtable: UCL School of Management
🗓 Tuesday, 15 September 2026
🕐 10:00 to 11:30
📍 Canary Wharf, London
ℹ️ Our quarterly roundtable for Advisers and Patrons of The Entrepreneurs Network.
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British startups and scaleups raised a record $17 billion in VC funding during the first half of 2026 — double the amount raised over the same period last year. It was driven overwhelmingly by large, late-stage funding rounds for AI companies
Technology Secretary Liz Kendall outlined her priorities for the next 24 months in the Substack launch for the Sovereign AI Fund
Chemical firms criticised funding cuts to the Science and Technology Facilities Council (Paywall — Financial Times)
The ruling Scottish National Party backed a moratorium on building AI data centres in Scotland
Tax guru Dan Neidle made the case against taxing foreign Brits
The FCA warned that it is in an arms race to keep up with the use of AI in financial services (Paywall — Financial Times)
The Government published its guidance on regulatory sandboxes for businesses
Shadow Chancellor Mel Stride pledged to slash taxes (Paywall — Financial Times)
Microsoft, Google, Amazon and Oracle will come under the purview of the BoE and the FCA after the Treasury designated them as “critical third parties” to the financial services sector (Paywall — Financial Times)
Critical Supply Group mapped the UK’s supply chains in its UK Supply Report 2026
20 policy wonks came together on policy recommendations for the incoming Burnham Government (Paywall — Arguably)
Our Supporters, Advisers and Strategic Partners are essential to helping us understand what entrepreneurs need to flourish, and are closely connected with our work. If you already support us — thank you. If you don’t, please consider helping us make the UK the best place in the world to start and grow a business.
50 Future Innovators
🗓 Friday, 17 July 2026
🏆 A place on the 50 Future Innovators list, including a published profile on the Universities UK website, shareable assets, and the opportunity to take part in a follow-up interview and spotlight content as part of a national campaign
ℹ️ Universities UK is inviting nominations for 50 Future Innovators, a UK-wide list recognising and celebrating fifty individuals whose innovative work has been enabled by a connection to a university
⏩ Find out more
We’re often asked where founders should turn for practical support beyond policy. So we’ve curated a list of government sites and trusted organisations we regularly recommend. Each week, we share a section from our Support for UK Entrepreneurs page. Are we missing something? Let us know.
National Cyber Security Centre (NCSC) provides free guidance and tools to help businesses improve cyber security.
Regional Cyber Resilience Centres provide free or low-cost cyber security assessments and advice to SMEs.
Cyber Essentials provides government-backed guidance on basic cyber security standards.
Best wishes,
Philip
Philip Salter
Founder
The Entrepreneurs Network
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