A compelling vision
This article originally appeared in the Municipal Journal, where our Chief Executive, Sarah Longlands, writes a regular viewpoint column.
Conversations with local economic development officers this week reminded me, once again, of how difficult it is to fund the desperately needed transformation of places.
This scarcity of funding means that councils have to be pragmatic. Many are attempting to develop funding packages from the many and various national schemes and there is an ever-increasing reliance on private sector investment both from the UK and abroad. But there is a bitter irony in a government thinking that they can continue to cut funds to local government yet still expecting them to devise top notch investment propositions for private investors.
“a perpetual state of crisis”
Place-based policy in the UK continues to rely on the assumption put forward by George Osborne’s 2010 budget: that investment in public services must be dependent on their ability to generate growth. This ouroboric logic has resulted in more than a decade of grinding austerity, leaving communities, and some local councils, in a perpetual state of crisis.
Recent comments from the Labour Party demonstrate that they too have bought into the idea. If politicians (falsely) argue that there is no money left, it should be taken as a signal that their extremely narrow way of understanding the role of the state and its influence on the economy has reached its limits.
Economic change doesn’t happen in a vacuum. Good economies are well supported through the provision of basic public services, particularly in education and health, while councils, hospitals and universities can deliver innovation in key sectors.
“long term planning gives investors and business greater clarity”
However, delivering this kind of public sector innovation requires long term thinking, skills, experience and the ability to set out a compelling vision which not only secures the investment (public and private) but the conditions required to make sure that the wealth is fairly shared and makes a difference to people’s lives. The ability of councils to undertake long term planning gives investors and business greater clarity about the value to be found in a place, its future and the ability of authorities to project manage and broker relationships. However, in an age of austerity, the people who can do this work are becoming an endangered species, and, with it, the well planned complex regeneration projects which can be vital in helping to secure long term impacts for community.
This is bad timing: there are currently an abundance of government-backed schemes to help attract and secure foreign direct investment, from freeports to levelling up partnerships – little bits of pump priming cash, designed to leverage the big bucks from foreign investors, including foreign states. Indeed, the government seem happy to leave it to other nation states to put the cold hard cash behind the UK’s levelling up agenda.
There are always risks to be managed when it comes to negotiating the redevelopment of strategic sites, particularly when the economic and social stakes are high. Research we published recently argued that mechanisms like freeports are – at best – imperfect tools for levelling up places, particularly those dealing with the worsening social and economic challenges faced by communities.
That said, in the course of our research into freeports we found that, despite a fairly bland national steer from the government, local and regional authorities were making attempts to push their boundaries. The leaders of freeports, we found, are using conditionality to do more than is expected of them to support well paid jobs and decent skills. Their ambitions for what success looks like goes far beyond sucking in foreign direct investment.
“more to be done”
But there is much more to be done. We set out an alternative way of thinking about investment schemes longer term. While we frame this in terms of ambitions for the future of freeports, the findings are applicable to many of the area based schemes that are being developed, including the new investment zones. Our recommendations include: a presumption in favour of retaining assets in public ownership to ensure that the benefits accrue to communities in the longer term; widening participation in the planning and delivery of new schemes to local communities; and working with partners to set out an ambitious plan for building and sharing local wealth.
“two ambitions for better local economies”
Whilst the current context and challenges require pragmatism, we cannot let that dampen our belief in better times ahead. So, here’s two ambitions for better local economies in the future: nationally, we need a conversation about the purpose and the role of public investment in our local economies and why it matters; locally, we must remain focused on the needs of communities and not get distracted by the interests of big capital.