From time to time a new phrase is coined. Sometimes the new phrase articulates a new solution, at other times it reinvigorates an old one, or – more cynically – masks it. In economic development we now have the phrase ‘inclusive growth’. Does inclusive growth represent a step change or is it just a new oxymoronic phrase for the failing cycle of growth and exclusion? Maybe it’s just semantics, a new term for the toxic ‘trickle down’?
We are facing a huge challenge to keep pace with skills requirements of rapidly developing industry and technology. The UK Commission for Employment and Skills reported that just over one fifth of job vacancies were considered heard to fill due to skills shortages.
I have spent the last three weeks in Cleveland, Pittsburgh, Philadelphia and Providence exploring how those cities have responded to economic decline and indeed economic opportunity. I have been fascinated by the levels of collaboration, the role of anchor institutions, the scale of foundation resource, and the ability to raise and redistribute taxation as means of enabling that response. While I have seen lots of good work in those localities, I have also been amazed by the scale of the remaining challenge, particularly in terms of addressing inequality.
Cleveland, Ohio has faced significant challenges over the last 20 years. The crash of the manufacturing industries in the 1990s led to a reduction in the number of jobs to the sum of some 150,000. This had associated consequences for the local population, which reduced from around 800,000 to 400,000 as people headed elsewhere seeking opportunity. It also had consequences for the physical and social feel of Cleveland: there is a myriad of vacant and derelict property and, for those remaining, high levels of unemployment and limited opportunity. The downtown area became a ghostly area embroiled in economic decline.
CLES has been working as part of a consortium with Carnegie UK Trust, University of Stirling and the Scottish Towns Partnership. Commissioned and funded by Carnegie UK Trust and the Scottish Government, the consortium have now devised the UK’s first and unique online tool, which has facts and figures for all 479 towns and cities across Scotland.
Public sector organisations like councils and colleges can do much to work with suppliers on their doorstep and stimulate local economies. In Lancashire work is underway to ‘repatriate’ spending. Anchor institutions are crucial components of our towns and cities. Commonly including local authorities, further and higher education providers, and housing organisations, they are key employers and procurers, embedded in their communities and unlikely to leave. In a UK context, the potential of anchor institutions to contribute to wider local economic development has been untapped – until now.
The cuts imposed on councils are too steep, happening too fast and unfairly distributed. There needs to be real-terms growth in the resources given to local government and distribution according to social need.
In recent years there has been no shortage of reports about how bad austerity is and how it is affecting the poorest the most. However, while much of this is well meaning, it is short on what we need to do differently. In the new manifesto for local economies, the Centre for Local Economic Strategies (Cles) sets out ideas which breaks out of this austerity narrative and the present timidity of some proposed alternatives. For us, decent public services and fairness work with and for prosperity and against poverty and inequality. Cles draws on a range of experiences to reclaim a local economics which work for social justice.
The announcement that the £6bn NHS budget in Greater Manchester will be devolved to the city region has taken many by surprise. The government has already devolved £2bn of spending to the city region. This proposal (the details of which still need to be worked up) is worth three times that amount, devolving nationally controlled structures such as hospitals and GPs to merge with local support and community care services. Greater Manchester will create a new ‘health and wellbeing’ commission to control the flow of money across the system, and to create links between primary and community and residential care.
Too often policy has little empathy toward the poorest. We already know that the policy default settings, such as trickle down and a ‘rising economic tide will lift all boats’ are just not strong enough to tackle poverty, even in times of growth. But increasingly, some policy seems alarmingly detached from the plight of the poorest. We don’t need to look very far to see this detached lack of empathy. It’s in the words of politicians, who denounce the benefit claimant as ‘a shirker’, but applaud the virtues of elite greed.
The UK is in the midst of a low pay crisis. Over 5 million people do not earn a wage which is sufficient to afford them a ‘decent’ quality of life. Wages across a raft of sectors are not rising in line with the cost of living and particularly costs associated with housing, fuel and food.
The biggest beneficiary of the living wage is not people or places, it’s HM Treasury Low pay is the fastest-growing reason people in the UK are poor: an estimated 5 million people are not paid a wage that enables them to live a decent quality of life.
Ill health is not just a social problem, says the chief executive of the Centre for Local Economic Strategies. For the past four months an independent inquiry has been sifting through evidence to examine why health inequalities are growing both within the north of England and between the north and the rest of the country.
Local enterprise partnerships are dominated by large businesses to the detriment of growth in our communities. Small businesses account for 47% of the UK’s private sector employment and around a third of turnover, but they are being left out of the loop when it comes to shaping and nurturing local economic growth.
This connectedness with the social sphere should be central to any local economic development. What is the point of local economic development if it does not deliver social outcomes or address poverty? In this we need to think about building a local civil economy – an economy which is decent, fair and works for people.
