Opinion Piece - Blog

We must accelerate the alternatives

The economic crisis has turned into a social crisis and local economic policy is failing.  Poverty, inequality, affordability of housing, low wages, insecure work are now ingrained in our cities.  We need a new radical urbanism so that we address these issues and deliver better social outcomes at scale.

However, there is an irony.  There is no shortage of wealth in our cities.  Whilst a few people and areas enjoy the huge benefits of economic success, many people and areas do not. Take a walk from any city centre.  Once you leave the global chain stores, buzzy restaurants, glorious public spaces, new urban living and high end retail, you will get to the district centres.  In these places, there is a different story.  You cannot always see the poverty and despair, as many areas have undergone a physical regeneration, but the signs are there.  Speak to people or an NGO and the daily hardship of surviving on low wages, youth unemployment and increasing housing costs, become evident.  This is not acceptable.  The future has to be about making existing and new wealth work better for local people and communities.

Community Wealth Building through Anchor Institutions

Places across the UK are striving to find new ways of attracting wealth, enhancing economic growth and addressing poverty. For the Centre for Local Economic Strategies (CLES), the attraction of wealth through inward investment is important; but of more importance is understanding and harnessing existing wealth for the benefit of local economies and communities.

The Importance of Social Value

Over the course of the last ten years, Manchester City Council has been at the forefront of progressive policy and practice around procurement. With an annual spend of over £600million, Manchester City Council has sought to ensure that every procurement decision it makes brings maximum benefit for the economy of Manchester and its residents. This means working with and utilising Manchester businesses to provide goods and services and ensuring that organisations providing goods and services (regardless of where they are based) bring social value including through creating jobs and apprenticeships, creating volunteering opportunities and reducing carbon footprint.

The work of Manchester City Council around procurement has involved a number of activities. First, they have developed a procurement policy statement which not only considers traditional factors such as cost and quality, but also ensure bidders for contracts consider social value. Second they have embedded the city’s corporate priorities into the procurement process, so that suppliers are actively encouraged to contribute towards achieving them.

What should a modern industrial strategy look like?

Does the modern industrial strategy published this week offer the radical departure our economy requires? While the Centre for Local Economic Strategies (Cles) welcomes the first industrial strategy to be published in more than a generation, we are concerned it will do little to fundamentally alter the fortunes of the people and places that have been ravaged by each wave of industrial restructuring since the late 1970s.

Social Value – the key role of Commissioning and Procurement

At the Greater Manchester Social Value Network (GMSVN) we are seeking to ensure that social value is embedded in everything that Greater Manchester as a place does. That means social value being at the heart of Greater Manchester strategy and embedded in the DNA of the public sector, businesses and the voluntary and community sector.

The devolved state we are in!

After decades of oppressive centralisation, many of us have welcomed the promise of a ‘devolution revolution’ for our cities and Local Authorities. We have been expectant, that this will herald a new local municipalism of economic success and social inclusion. However, with ongoing global economic issues, Brexit, the Treasury’s economic model and the endless yoke of local authority austerity, we may need to seriously downgrade our expectations.
Of course, there are positives. Devolution has heralded new powers and responsibilities to shape planning, hard infrastructure, skills and economic development policy. Greater Manchester has control of the health and social care budget. Devolution has seen a shift in some resources with an additional funding of £30M a year for city regions. We are to get new metro mayors, with some elections in May. And more devolution and deals will continue beyond the early adopters. There is hope and promise in all of this.
However, the positives should not blinker us from the downsides. For many local authorities, devolution represents a meagre ease on austerity and cuts. Any financial benefits of devolution has been outweighed by a 40% reduction in local authority spending, which is to get worse. No other area of government has been hammered like local government. It has shouldered the greatest burden for deficit reduction.
As regards economic development, the devolution deals are framed within the Treasury driven model of agglomeration economics and incentive competition. People and places are expected to benefit either through trickle down in the new wealth through jobs or a geographic ‘trickle outwards’ of wealth from city Centres and economic growth areas. In this, narrow version of economic development, social hardship is often wrongly perceived as a consequence of restrictive planning and interference in the market, rather than the consequence of austerity, lack of social investment or structural flaws in the national economic model.
The Brexit referendum, increased the recognition that too many people are being left behind. This has prompted a change in tone around ‘an economy for all’, and a ‘shared society’. However, (as yet), this has not resulted in a commensurate change in the economic model or the fiscal basis to devolution. Philip Hammond has reversed none of the previous Chancellors cuts. The Northern Powerhouse branded infrastructural investment still talks more than it financially punches. And the aspirations could be swamped by the costs of withdrawal from EU and loss of the EU structural funds. We can place some hope in the ‘inclusive growth’ agenda. However, this hope could be limiting itself to standard economic development practice where jobs and labour market are the main focus. They are important, but inclusion within a modern successful economy should be viewing social investment for entrepreneurialism and innovation as a basic and fundamental input to economic (and social) progress and resilience.
To advance a true ‘devolution revolution’ and inclusion agenda, we need to start by acknowledging devolution (as its stands) has little prospect of tackling the scale of the problems the country faces. As a start, the newly elected metro mayors in May, could ride an electoral mandate which forges a different path, where they seek to transform what is on offer. There is a new progressive deal to strike and CLES continues to make the case for a progressive devolution (here and here). This includes:
• a new constitutional conversation and settlement, rather than an asymmetric pattern of deal making (where Whitehall holds most of the cards).
• a devolution which actively coordinates regional imbalances, and not just leave them to the market.
• true fiscal devolution to local government but framed by national fairness, redistribution and reorganisation.
• greater devolution of the social inputs to economic and social success, including employment, education, welfare and funding for the Community and voluntary sector
The devolution ‘genie is out of the bottle’ and it can be transformed into a true ‘devolution revolution’. However, it is no good accepting the devolution as it is. Key is to confront the flaws and agitate for something a whole lot better. We have a lot of work to do.

Enhancing social benefits through procurement

This article was written by Matthew Jackson and first published by URBACT.
Matthew Jackson is the Lead Expert for the Procure network and the Deputy Chief Executive of CLES.
 

There has often been a misnomer that procurement processes cannot consider innovation in procurement and particularly criteria around economic, social environmental benefits because it contravenes the European Procurement Directives and specifically requirements around competitiveness. This misnomer has meant that procurers across Europe have often not considered innovation in procurement and have instead focused purely upon the cost of the product or the service being procured.

At the last meeting of the Procure Network in Albacete in December 2016, we explored how this misnomer could be overcome and particularly how social criteria could be built into the various stages of the procurement cycle. Indeed, the European Directives are now actively encouraging municipalities and others to utilise the process of procurement to achieve wider social and environmental goals and suggests three main ways of doing this.

The new mainstream

Brexit and ongoing economic and social troubles has exposed the choices. On the one hand, there is a progressive choice – greater inclusion, hope, social growth and a narrowing of the gap between the haves and the have-nots. On the other, there is a more reactionary choice – fear, more divisions, economic growth for a few, and a deepening hardship for many.

The social city

‘The only thing that trickles downward is the lives of people, not the wealth’. 

So said Oriol Estela-Barnet the Director of PEMB Barcelona during my visit to Barcelona. In this, I was reminded of the work of the British Geographer, David Harvey  – who wrote in the Limits to Capital that ‘The accumulation of capital and misery go hand in hand, concentrated in space.’

For 30 years, cities have ridden a wave of global economic buoyancy. This prompted a ‘good times’ urbanism which has worked for a few, but not the many – with inequality, poverty and misery now on the rise in many cities around the world. We need a new urban response. We need to build a more social city.

The importance of procurement to city economies

This article explores why procurement is increasingly being seen as a way of addressing some of the economic, social and environmental issues facing our cities. It does this through reflecting on: the legislative framework for procurement; the activities of the Procure network; the importance of understanding where procurement spend goes; and how social considerations can be more effectively embedded into procurement processes.