Putting the social into a progressive devolution

Devolution needs to get social. For too long the poor, low-paid and unemployed have been seen as a cost, with successive national policies seeking to reduce welfare budgets and cut spending on community activity. This is folly. Investing in the poor and society should be seen as investment in economic potential and productive capacity. Moving forward, this inversion of thinking and action has to be a key part of devolution.

For all the positives of devolution, it’s been locked into austerity and a neo-classical framed economic model prescribed by Treasury – where a ‘rising economic tide will lift all boats’ is left as the main means of tackling poverty. Economic development policy has thinned and narrowed, under devolved economic thinking that has preferred the hope of trickle-down and broadly ignored the poor as an unrealised asset.

It is myopic to continue with this idea of devolution and northern powerhouse thinking. Public investment in hard infrastructure is not the sole ‘generator’ of wealth. People are too. Huge public service cuts with reductions in spending on education, social and cultural development should be seen as an economic development failure, not a public finance necessity.

Of course, public sector reform has started to make significant inroads, backed by the understanding that prevention is better than cure and that reducing frontline costs needs upstream – and early – intervention. It is now accepted wisdom that it costs less to be proactive, rather than be reacting to expensive and acute needs. Furthermore, the recent rise of ideas in economic development around inclusive growth acknowledges that issues such as ill health and low self-esteem can affect productivity and economic output.

‘Devolution needs to ‘up the ante’, and move away from traditional aspects of economic

development and onto a greater consideration of the social inputs to economic success’

However, we cannot just consider devolution in terms of public sector reform and economic development based on inclusive growth. What worries me is that many important social aspects to place success are still seen as a cost. Investment in welfare, cultural and arts activities, or supporting civil society and active citizenship policies will probably not be favoured, as the direct link to growth and economic return is less apparent. If we continue as we are, we will be excluding those activities which may advance inclusion and create a better society, as a precursor to economic success.

The new directly elected mayors (from May 2017), and the devolution agenda generally must seek a mandate and advance a progressive wave of devolution. They need to ‘up the ante’, start moving away from these narrow traditional aspects of economic development and public sector reform and onto a much greater consideration of the social inputs to economic success. In short, they should be placing the social aspects of peoples’ lives at the centre of future devolution plans. They must get up to international speed and acknowledge that to generate both social and economic freedoms and opportunities you need a progressive and socially just market.

So we must maintain the prevailing approaches to economic growth including capital investment, labour and skills. However, in addition, devolution needs to invest in human and social capital. These latter aspects are the basis to a new productive, inclusive society and increasingly considered as key elements to future cities and economies around the world. To do this, the next wave of devolution must look at gaining more control and power over national sources of social investment including welfare, education, funding from the social sector (from the Big Lottery?), employment policy, cultural policy and arts funding.

The progressive devolution future must see social investment as the new wave, in which inclusion is the goal (aided by, but not wholly dependent on growth). This approach opens up far more possibilities and room for sustainable social and economic success.

The original article can be read on the NewStart website here.