CLES’ Senior Researcher, Victoria Bettany, joined Dena Ryness, host of the ‘Divas Up North’ radio show, to discuss the challenges of successful devolution and the potential of the Northern Powerhouse to truly benefit women.
Financial investment and return has dominated the economics of devolution, hence the focus on property development and land value appreciation in city centres and other hotspots. Indeed, this focus has been over-egged in devolution deals through economic agglomeration and ‘earnback’ on growth. If this trickle-down approach is retained, we can expect the deepening of geographic divides across the combined authorities, with little significant increase in new or decent jobs. Of course, a focus on financial return is a universal component to city success but it should only be a part of the mix, and not take undue precedence over other forms of economic development and social investment.
For many years the dominant approach has failed to build a local economy for all. Brexit makes the challenge harder and we need to take a huge step up.
Under the auspices of devolution, mainstream economic development has followed traditional lines around investment in hard infrastructure, civic boosterism, city centres, planning relaxation and post-19 skills. Overall it has slotted into and complied with the Treasury economic model – favouring agglomeration economics and narrow wealth concentration. As a result, mainstream economic development has been socially failing, and presided over growing economic imbalances.
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.
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.
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.
Senior Researcher
Devolution needs to get social. For too long the poor, low-paid and unemployed have been seen as a cost, with successive national policies seeking to reduce welfare budgets and cut spending on community activity. This is folly. Investing in the poor and society should be seen as investment in economic potential and productive capacity. Moving forward, this inversion of thinking and action has to be a key part of devolution.
Voluntary sector leaders have said the devolution process should be reformed to ensure charities are properly represented as service providers.
Since Theresa May took office as prime minister of the UK in July there has been a great deal of speculation about how – if at all – powers over tax rates and local spending will be devolved to local authorities, as promised by the country’s former chancellor George Osborne.
One third of civil servants should be moved outside London as part of the devolution of powers to local areas, according to a new report from the Policy Exchange.
