Inclusive growth could help the poorest benefit more from economic expansion. This will require a state that invests in new infrastructure and backs local initiatives to support communities Inclusive growth is the new concept in town. The RSA have recently announced their Inclusive Growth Commission. They seek to identify practical ways to make the UK more economically prosperous and inclusive.
In recent months, there has been a global recognition that we must make growth more ‘inclusive’. In the UK, this has culminated in the RSA announcing an inclusive growth commission.
This is welcome. There is no doubt that in recent years we have neglected what we have known for decades – namely that economic growth does not guarantee poverty reduction and that inequality hampers growth. Indeed, high levels of welfare and low levels of spending power is a shaky basis to a local economy. An inclusive local economy needs the poor to not be poor.
The effects of youth unemployment are not an isolated temporary moment in the lives of young people. That is why we must push for a much stronger approach now
Crowdfunding isn’t the only way to get projects off the ground. There are other ways to encourage investment. With government grants disappearing and banks more reluctant to fund small businesses, local communities are seeking new ways to find investment.
ur local economic approach is working for the few, not the many. A dominant ‘growth at all costs’ agenda is not delivering socially or even working particularly well for local growth. Backed by the treasury, the agenda has worked for some areas, but, overall, growth is anaemic: low wages, insecure work, and inequality. However, there is change afoot. Inclusive growth appears to be slipping onto the mainstream agenda.
The UK was once proud of local government and its employees. Today, through a combination of disrespect and neglect, we are dangerously blasé. Today, a dark cloud hangs over them despite their great efforts in very hard times. Talented people have left, and, as services reduce, capacity is being hollowed out.
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.
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.