Opinion Piece - Blog

Poverty: It’s about wealth, stupid!

For decades, our economic system has been based on a hope that a general rising tide of economic wealth will benefit us all. With the release this week of the annual UK poverty report 2018 by Joseph Rowntree Foundation, we should now firmly reject this idea once and for all.  For all the description and seemingly endless talk of inclusive growth and other policy reforms, we often ignore the fundamental determinant of poverty in this country: the unequal allocation of wealth.

We must accept that the UK political economy, with its market liberal economic growth model, is intrinsically incapable of ensuring that wealth is fairly distributed.  We are the fifth largest economy in world, but fifty-two percent of our wealth is held by the top ten percent, and 20% by the top 1 per cent.

Amazon’s New York deal; something rotten in the state of local economic development

Amazon’s cushy deal with New York State is further proof that local economic development has become dominated by a failed model; one which enriches global corporations and impoverishes local residents. We must be bold and recognise that agglomeration economics will not save our cities, writes Jonty Leibowitz.

Last week, Amazon finally announced that they would be building their $5bn new national headquarters in Long Island, New York, as well as a new national ‘Centre of Excellence’ in Virginia. The reveal of the location for ‘HQ2’ has been the culmination of a thirteen-month process in which Amazon received bids from over 238 cities to host the new sites, which will bring in an estimated 50,000 jobs.

Social Value is not enough – It’s time to restore Public Values

Last week the government launched a series of new initiatives around ‘Social Value’, a much vaunted policy agenda which started with the passage of the Social Value Act in 2012. Cabinet Office Minister David Lidington has announced that by summer 2019, government procurements will be required to take social and economic benefits into account in certain priority areas, as well as new transparency rules for those bidding for public contracts.

The government’s attempt to get businesses to consider their social impact can be understood as an acknowledgement that something has gone awry in the state of commissioning public services. The dramatic collapse of outsourcing giant Carillion in January 2018 has prompted a new wave of governmental thinking about how goods and services are purchased. With public opinion increasingly moving against poor provision of public services (most noticeably the much criticised railway system), this extension of the Social Value Act represents the government’s response.

Work is killing us. Here are five ways to stop it

Fourteen to sixteen hour shifts, six days a week; low wages; potentially fatal accidents a regular risk… this isn’t a description of working conditions at CLES, but of work during the industrial revolution. Thankfully, since then, capitalism and the world of work has been transformed. Child labour is illegal, employees have gained employment rights and health and safety regulations mean that going to any workplace is significantly less dangerous than it might have otherwise been.

However, just because the number of work-related accidents has fallen over the decades doesn’t mean that modern work is harm-free. There is mounting evidence of the dangerous effects on health of modern work practices. This is most severely demonstrated within the ‘gig economy’, in sectors where workers gain flexibility at the cost of employment benefits (sick pay, parental leave and the like) and work that is, more often than not, offering unstable hours and low-paid.

The secret to Preston’s success

Preston has been identified as the most rapidly improving urban area in the UK to live and work, according to the 2018 Good Growth for Cities index, but what’s behind its success and how can we build on it?

A bootstrap economic policy

While not playing an exclusive role, Preston’s adoption of a local wealth building approach to its economy has been a factor in the city’s success. In particular, by exploring the supply chains of some of the city’s largest employers and purchasers of goods and service, there has been a reconnection not with only the local economy but also with the local people at the heart of it.

Beyond the fringe: thinking seriously about wealth, power, and ownership

A general rule of thumb with fringe events during party conference season is that unless you are serving warm food, you can rarely expect attendance figures to rise above thirty people. This figure might reduce if your event is too early in the morning, and further still if on the last day of conference. Therefore, the fact that almost one hundred party members, councillors, and activists attended our ‘Future of Public Services’ fringe at 9am on the last day of Labour Party conference (without a sandwich in sight) suggests that there is significant interest and traction on this agenda.

The huge appetite for new ideas was palpable across the three days in Liverpool. On Wednesday morning, there was standing room only as CLES welcomed Shadow Chancellor, Rt Hon John McDonnell MP, Lisa Nandy MP, Jim McMahon MP, Mayor of Newham, Rokhsana Fiaz OBE, and writer and broadcaster, Paul Mason to discuss how we must restore ‘public value’ to public services if we want to transform British society.

What next for the Local Wealth Building movement?

Local wealth building has emerged as a powerful tool to democratise our economy and create wealth for all. From Barcelona and Bologna to Preston, Islington, and Kirklees, the movement is growing and helping communities take back control. Jonty Leibowitz and Tom Lloyd Goodwin suggest that whilst now is a good time to recognise and celebrate these achievements, we must also be restless and ambitious, asking ourselves – ‘what next’ for this dynamic movement?

It is no surprise that local wealth building has begun to gain traction in the last decade. Across the world, communities are beginning to fight back against a political and economic system in which wealth is hoarded by a narrow few, public services are cut to the bone, and the many are consigned to lives of economic precarity and political disenchantment.

Wonga’s demise is the tip of the iceberg in a rigged economy

Rather than seeing the collapse of Wonga as the end of the payday loan era we need to question the underlying factors that lead people to rely on such providers, writes David Burch and Matthew Todd.

Wonga did not collapse because of a lack of demand for fast credit. Instead, new regulations – such as limits on the daily interest rate and the total amount that borrowers could pay in interest and fees – created problems for its business model. Indeed, the macroeconomic factors that created the boom of payday lenders persists and there are worrying signs that, despite Wonga’s collapse, financial distress has risen – the number of people contacting the debt advice charity StepChange for assistance is at record levels, and the rate of personal insolvencies has also increased.

Birmingham prison: the neglect of public values

The blistering words of Peter Clarke, Chief Inspector of Prisons, about the appalling state of Birmingham Prison ring in the ears – drugs, violence, fear and filth. Accurate parallels have been drawn with the squalor of eighteenth century prisons. While many have pointed to staggering challenges facing Birmingham this is not a unique case.

Commentators have variously blamed the shortcomings of G4S, a failing policy of privatisation, a decade of unrelenting austerity (with cuts of over 40% to prison budgets) leading to systemic failures in the criminal justice system which is now on its knees. Underlying all of these is something more insidious and deeply pernicious: an abject absence of the values which should imbue public services, including human dignity, equality and allocation of resources to ensure that everyone is able to access public goods (such as security, housing, healthcare) regardless of their own, private means.

A new era for the UK economy?

On 17th July CLES convened the UK’s first Local Wealth Building Summit. Hosted by the University of Birmingham and funded by Barrow Cadbury Trust, the event celebrated ten years of work to build wealth in communities across the UK and posed the key question – how do we grow these ideas so they are no longer simply a powerful alternative but a new economic mainstream?

From Kirklees to Dagenham, Birmingham to Preston, and even across the pond in Ohio, delegates and speakers spoke passionately about the work being done in communities to counter the extraction of wealth from people and places, build greater equality and create inclusive economies.

Building an inclusive economy in Kirklees: the movement continues…

Neil McInroy, Chief Executive, Centre for Local Economic Strategies & Cllr Shabir Pandor, Leader of Kirklees Council

Kirklees Council and the Centre for Local Economic Strategies (CLES) have begun work to develop a more inclusive local economy through a new approach to economic development, ‘local wealth building’. In so doing, the Council joins a progressive movement of local authorities using this approach from Barcelona and Bologna to Preston and Salford.

Local wealth building’ aims to reorganise the local economy so that wealth is broadly held, with local roots, and where benefits are recirculated.  The local wealth building movement, of which CLES are at the forefront, seeks to provide resilience where there is risk, local economic security where there is precarity, and to ensure opportunity, dignity and well-being for all.  A key part of this is how established organisations (‘anchors’), from local hospitals and manufacturers to local authorities, can use their assets, employment practices, and spend to improve local economic and social we-llbeing. Through local supply-chains and responsible employment and asset-management practices, these organisations are partners in reshaping local places and empowering local people for a more inclusive economy.