Where do you find deprivation in England today? The North? Coastal towns? Inner cities? The depressing answer found in today’s newly published Index of Multiple Deprivation is clear: everywhere.
The creative sector represents a huge employer in the UK. It contributes billions to the economy, employs thousands, and is a key export of our economy. Yet the sector faces enormous challenges in UK cities. The cost of rent, poor connectivity, and licencing problems resulting from city centre residential developments are just some of the issues cultural operators face.
The spectacle of this year’s Sunday Times Rich List has revealed, yet again, that Britain’s richest are getting richer still. Published yesterday, the list shows that Britain’s 1,000 richest individuals and families are sitting on record wealth of £771.3bn, up £47.8bn in a year. The UK’s billionaire count has climbed to 151, up six on last year. The threshold at which the super-rich make the list has risen £5m to £120m.
In other news (from the same paper on the same day) we learn that an emergency food bank has been set up in the Whitehall offices of a government department, after cleaners and other support staff became the victims of a payroll blunder by one of Britain’s biggest outsourcing companies. The human cost of this incident adds to the growing number of people in the UK who cannot afford basic needs such as food.
The Social Mobility Commission has confirmed what many have long known – governments have failed to significantly reduce inequalities. The Brexit vote and the subsequent soul searching has finally brought many of these issues to the fore. The growing sense of disenfranchisement in the country and increasing gap between “haves and have nots” is now penetrating mainstream discourse, prompting a political rhetoric of an ‘economy that works for all’ where the benefits of growth are shared among the ‘many, not the few’.
What we have been doing has clearly not worked
The UK economy has not worked for all for a long time. Indeed our economic models for decades have tolerated, and been somewhat unconcerned, by high levels of socio-economic inequality. What we have been doing collectively to address challenges of poverty and inequality over the past two decades have clearly not worked. In its report Social mobility policies between 1997 and 2017: time for change, the Commission argues that successive governments have failed to make social mobility the cornerstone of domestic policy, and that long-term progress has too often been sacrificed to short-term change. A piecemeal approach has bought some advances, but a failure to develop a holistic policy approach has meant that gains have been lost as efforts have waxed and waned.
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.
The economic crisis has turned into a social crisis and local economic policy is failing. Poverty, inequality, affordability of housing, low wages, insecure work are now ingrained in our cities. We need a new radical urbanism so that we address these issues and deliver better social outcomes at scale.
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.
For too long, we have either turned a blind eye to poverty and disadvantage or hoped that a general rising tide of economic wealth would trickle down. It’s time to reboot prevailing local economic policy – argues Neil McInroy – which is failing the poorest in society.
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.
More devolution of powers and budgets from Whitehall offers councils the chance to tackle poverty and inequality by ‘doing things differently’.
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.
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.
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.
Many local places face significant challenges. On the one hand, sluggish or no growth, coupled to rising inequality and poverty is placing significant pressure on public services. On the other, austerity and cuts to local government and public services are reducing the ability by which the public sector can act. There is a lot of commentary about the causes of inequality and poverty but a lack of real action.