Time for local economic development to muscle up

This article originally appeared in the Local Government Chronicle

For some in the local economic development community there is talk of a post crisis “bounce back” – reflective of an idea that the economy is on a purely temporary freeze, but will eventually thaw, and whilst an unprecedented situation, we will get back to something akin to “normal”. While this may be comforting for some, it is fanciful. Instead, we are going to need a massive reset to our local economic development thinking and practice.

We are experiencing irreversible structural and societal change. Our local economies are collapsing; we were trundling along with stagnant growth even before Covid-19 arrived and now a growing recession with unprecedented levels of business failure and unemployment is heading down the tracks. The economic and social geography of the crisis is emerging, and where before we may have had to battle local economic sluggishness and poverty, we will now be fighting dereliction and destitution.

If we are to maintain vital everyday sectors within our economy and protect families and communities from social meltdown, the levels of state support mandated by the crisis will need to remain indefinitely. While the public health policies of lockdown and social distancing will not last, they will have an enduring economic and social legacy.

“There is no going back, neither to the economy of the past, nor the local economic development practice that went with it”

The crisis has exposed the vulnerability and fragility of our economy. Presiding over this was an economic development discipline that had become too accepting of a narrow focus: on growth, inward investment, trickle down and efficiencies gained through squeezing wages and working conditions.

Economic development had become far too reluctant to intervene in progressive ways, and as such our economy was riddled with wealth extraction, inequality and insecure work. Across a number of areas there is now an urgent need for a fundamental shift in practice and mindset, moving rapidly from the old to the new. We must seize the moment. There is no going back, neither to the economy of the past, nor the local economic development practice that went with it.

As CLES and the Democracy Collaborative have recently written, mainstream economic development must now have community wealth building ideas and practice – a “new common sense” which had been developed at pace prior to Covid-19 – at its core.

In this, it must prioritise generative activities, in pursuit of the wellbeing of people, places and planet, over extractive ones which prioritise the short-term pursuit of shareholder profit.

In order to accelerate the pace of this transition, the local economic development profession needs to have more importance and power. Therefore, among other things, we call for a new national funding settlement and redistribution programme for local government with new forms of fiscal devolution (i.e. land value tax) and a wholesale adoption of industrial strategies with a Green New Deal at their heart.

THE NEW: Post Covid-19 economic development THE OLD: Pre Covid-19 economic development
Keynesian, developmental economics Neo classical economics
Wellbeing and inclusion Increase in GDP and GVA
Community wealth building Wealth extraction
Circulation of wealth Trickle down of wealth
Real and everyday economy Financialisaton and high growth sectors
Development through local assets Inward investment
Good employment Productivity
Supports democratic economy (co-operatives etc) Supports private business
Social infrastructure Hard infrastructure

For the economic development discipline, we should not shy away from recognising that we are in a moment of epochal change.

The siren song of a return to normality or a bounce back must be resisted. How we live, how our local economies function, and the role of local government are being reassessed and we need to make the change with urgency.

Across much of this land – and for far too many people – the last few decades have represented a kind of ongoing economic crisis. As more of us now share the uncertainty that the precariat has long been familiar with, we owe it to each other to reject the past and ensure that there is no going back.


CLES recognises the challenge of this work. While there is much to draw on from a decade of community wealth building practice across the UK and beyond, our thinking will continue to evolve and there is the imperative to accelerate both pace and scope, which will necessitate new approaches. We now have packages of support we can offer to local authorities taking this work forward, focusing on three areas:


Supporting councils to build comprehensive analyses of the impact of the pandemic on their local economies and the levers to respond to the specific issues arising in each place.

New local economic recovery and reform strategy

Supporting the development of local economic recovery and reform plans, reviewing and stress testing existing plans and advising on local economic development capacity and ways of working.

Policy development in specific functional areas

Working with localities to understand and analyse place-specific requirements for policy development.

If you want to know more, get in touch.