Exploring progressive frontiers in Newcastle’s local economy

This article originally appeared in Connected Voice Magazine. 

In Newcastle, as in many places in the UK and beyond, there is a tension. Our collective desire to celebrate the city’s opportunities, cultural richness and economic potential sits alongside a widespread recognition that many people are not able to access the wealth we have created.

“despite the value of foreign direct investment increasing […] child poverty in Newcastle has risen sharply”

Despite in the North East the value of foreign direct investment increasing from £16.2bn to £24.5bn between 2014 and 2020 (ONS, 2021 ) child poverty in Newcastle has risen sharply in the same period, from 28% to 41%, rising further to 42.4% in 2021 (North East Child Poverty Commission, 2021). These figures are now the highest in the region and 7th highest in the whole of the UK. Other measures are also heading in the wrong direction. Life expectancy in Newcastle as a whole is already lower than the national average and this is even more starkly felt in the most deprived wards, where men can expect to live 13.1 years less than those in the least deprived (8.8 years for women) (Public Health England, 2019). Byker and Walker wards, in particular, consistently appear on datasets showing the most deprived wards in the UK in terms of health patterns (Oxford Consultants for Social Inclusion). This would suggest that the growth of inward investment in the city is not materialising in better outcomes for all of its people, with those of the greatest need feeling the sharp edge of the knife.

Research from CLES (A Light in the Dark: Progressive frontiers in local economies) reveals a similar story in the majority of English city regions: despite growth-led approaches enabling inward investment, alongside broader economic successes in the region (Invest North East England), deprivation levels have continued to increase.

It’s clear, then, that any discussion on economic inclusion in Newcastle needs to start by understanding the flows of wealth within it. How is wealth owned, created and traded in the city? Who benefits as a result? The city now has the opportunity to interrogate its wealth and, by doing so, to join the growing number of local authorities who are exploring alternative economic models.

“cultivating place-based assets and harnessing their power to develop economies from within”

These alternatives – rooted in ideas of economic inclusion – mean that, rather than competing to attract and retain outside investment, economic strategy commits to cultivating place-based assets and harnessing their power to develop economies from within. Newcastle can take inspiration from the living examples of places across the UK (CLES: Community Wealth Building) that are positively influencing important determinants of health and wellbeing through progressive, place-based economic development. Preston, where such an approach is being implemented, has seen improvements in socioeconomic deprivation (Demos and PwC, 2018) as well as mental health (B Barr et al, 2022).

“establish a vision that re-thinks the metrics of economic success”

This process begins with greater collaboration between key “anchor institutions” – local authorities, the NHS, housing associations, universities and colleges – and communities and the VCSE sector to establish a vision that re-thinks the metrics of economic success, beyond inward investment and towards universal prosperity.

For these visions to succeed, they require cross-sectoral engagement in key interventions, including using functions like procurement to influence the behaviour of the city’s business base toward greater social and environmental purpose. In Newcastle this could include exercising the levers available at the North East Combined Authority to provide business support for local co-operative, mutual, social and community enterprises and unlock community investment (following the example of Greater Manchester Combined Authority’s proposed Community Wealth Hub. The city’s anchor institutions could also work with the VCSE sector to target entry-level employment toward disadvantaged areas or demographics, as witnessed through the creation of the I Can programme (CLES: Anchor Institutions Sow the Seeds of Change) developed by the Birmingham & Solihull Integrated Care System. The VCSE sector’s collective on-the-ground expertise and generative business models are indispensable for the delivery of these anchor interventions.

“stronger and deeper relationships between the local state and community rooted VCSE organisations can enable real innovation”

There is also a key role for the VCSE sector to play in public service delivery. We know that the sector is made up of countless organisations that share the passion for public values that local governments are built on, while offering unique contributions to public services, such as adult social care. While it is important for commissioners to guard against outsourcing these services to an already stretched VCSE sector as a cost-cutting exercise, stronger and deeper relationships between the local state and community rooted VCSE organisations can enable real innovation, as seen in the Newham New Deal Partnership’s bespoke and personalised services for people with dementia (CLES: Reshaping Ownership within Adult Social Care).

Newcastle is now at a pivotal moment, having already begun on this journey with their own Social Value Commitment to “think, buy, support Newcastle” , and can lead by example on more interventions. The VCSE sector is an invaluable asset to develop the vision and to deliver the interventions to build community wealth and economic inclusion. To maximise impact, the sector should build and engage in purpose-driven spaces of sectoral collaboration. It is only through a joint ambition and commitment across sectors and organisations, that the city will be able to navigate the tension between growth and inclusion in order to build community wealth and resilience in the long term.