In the Budget, wealthy businesses in thriving parts of the country were granted a smoother transition to their new higher business rates bill. This easing-in period for successful businesses will be subsidised by a “fair” increase in National Insurance Contributions by 1% to 10% for the self-employed – raising £145m a year by 2021/22.
Budget day for the Centre for Local Economic Strategies (CLES) used to be one of intrigue and relative excitement. In the 2000s, the Budget was supplemented by a specific annex focused on economic development and regeneration. Indeed, the Budget was where we saw exciting new renewal initiatives announced; reviews of sub-national economic development formulated; and new duties and funding initiated.
For many years, economic development has been a thin gruel for social inclusion; based overly on economic growth (sometimes at all costs), trickle down and spatial agglomeration. So, it is heartening that the commission seems to have partly picked up on the ideas of CLES and others (you can read our RSA submission here). This includes the understanding (if not a truism) that investment in social institutions and people is as important as investment in economic infrastructure; or, how the spheres of the economic and the social are not separate, but linked. They also highlight the excellent practical work CLES are engaged in: Community Wealth Building and Anchor Institutions.
CLES chief executive Neil McInroy published a blog last week reviewing the Inclusive Growth Commission’s final report. He recognised the value that the Commission has added to policy and public debate about these issues, but also asked some important questions. This post is my rebuttal to some of the challenges posed, having worked as lead researcher on the Commission (I am not representing the Commission’s ‘official’ voice here – just my own). The thrust of my argument is that the Commission has offered a strong alternative to the economic orthodoxies of the past, and has advocated a set of reforms that would be genuinely transformative.
Around ten years ago, the Centre for Local Economic Strategies (CLES) started undertaking work around public procurement. Our interest in procurement was three-fold. First, we wanted to understand more effectively where procurement spend went and the impact in particular it had upon local economies. Second, we wanted to shift the behaviour of procurement officers so that a wider range of factors informed the procurement decision. Third, we wanted to influence the behaviour of suppliers so that they delivered greater benefits for local economies and people through the provision of goods and services.
Financing house building presents a stumbling block especially for social housing providers, with housing associations and local authorities locked out from accessing mainstream government funds. The £3bn Home Building Fund, the £1bn Build to Rent Fund as well as the hundreds of millions devolved via the Housing Investment Fund to Combined Authorities can only be accessed by private sector companies.
The function of local economic development needs to evolve. Understanding and working with the wealth of local anchor institutions is one way forward, says Matthew Jackson
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.
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.
An interview from Neil McInroy’s recent trip to Barcelona
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.
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.
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.
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.
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.
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.
