Neil McInroy
All posts tagged: Total Place
Cuts with a future
Ok, cuts in Local Government are underway. Many areas are worried and do not know what to do. Now before time pressures mean that we start madly slashing away, we in the local government community urgently need a plan, not just for the short term cuts, but also for the long-term.
In my view, cuts without due regard to longer term place stewardship and retaining an ability to think and act strategically are potentially pernicious and deeply damaging. If they are implemented clumsily, with narrow value for money as the sole concern, they have the potential of hollowing out the longer term capacity to act. They could irrevocably weaken core services and put locations in peril by leaving local government ill-equipped to deal with future economic turbulence, environmental change, planning adaptation requirements or social events.
Therefore, whilst accepting some public sector cuts, we must also look to the longer term and think about what the challenges could be. There are clear red lines which we should not cross. These red lines are ill thought through cuts which result in loss of power and a reduction in corporate research, strategic planning and intelligence functions.
Local government is and should remain the glue, the connector with capacity which ensures strategic place stewardship and the effective delivery of public services. We cannot irrevocably denude the ‘corporate brain’ of local government. That would be a disaster. At this time, corporate research and strategic planning is of more not less importance.
For example in economic development terms, we need to retain an understanding of how the commercial and the social sectors operate within a place and how they can contribute to service delivery. It means delivering on the Local Economic Assessment. Non - statutory service areas such as Economic Development may look like easy pickings. However, this service area contains future economic success of a locality and to to cut may just stoke up problems and it is a is a false economy.
In Total place - the whole area approach to public services, cuts are viewed as an opportunity, as a chance to do things differently, to be more efficient. This is correct. However, I am not sure or convinced there is enough focus on the longer term challenges, corporate power and function, capacity, place making and resilient capabilities in dealing with future shocks and change.
Cuts need to be intrinsically linked to power now and in the future. Total place cannot be solely about the public sector coming up with cuts and making the harsh decisions, whilst ultimate strategic power dissipates in an uncoordinated way. We cannot have a cuts which merely create a warped equation which means less resources = less power. As Total Place partially indicates, in a time of less resources we need more power over them, not less. We need an escalation of local government influence, power and place stewardship. However, it should not be about some perverse ‘race to the bottom’, or some tortuous horse trading to get more central resources where the harder you cut the more plaudits you will get.
Therefore, before any cuts should be made, we need a coherent plan. This plan needs to consider what to cut, for how long and what its consequence on power and strategic place stewardship could be. We must acknowledge that all cuts are not efficiencies and recognise the difference and be honest. By making a cut, are we irrevocably retaining or undermining future strategic capacity? Cuts cannot jeopardise the capacity which ensures expertise in a particular area. It may be about reducing direct service delivery but the cuts must not reduce confidence to act, including leadership capacity, intelligence gathering, understanding and power.
To ask this question is to start to create a system of cuts with a plan, which help to ensure effective place resilience in the future. These are cuts that acknowledge the strategic opportunity, but know there will be challenges ahead which will require understanding and leadership. These are cuts which recognise the ongoing need for more power. These are cuts with a future.
Local Government needs flexible geographies
Recently CLES have been working with Localis and RegenWM on localism in the West Midlands. We have had some stirring debate about local government, power and the regions. When I discuss economic governance with CLES members and local government, the abiding message, is that we need flexibility. In this, I believe we need to be very wary of placing too much of a focus on new forms and institutions, and avoid assumptions that there is an easy made spatial fix.
The recent report and commentary by Paul Carter, Leader,Kent County Council,is a welcome addition to this debate. Though the idea contained within an LGC article that there should be formal sub regions is problematic. In economic terms we need flexibility which allows local authority areas to work together and do different things at various geographic scales. We need collaboration which is labile, majors on effectiveness not just raw efficiency and is capable of economic and environmental change and dealing swiftly with this change. We need arrangements which major on local function (thepurpose) not form (institutions). For this to happen, we cannot get so hung up about fixed institutions at specific scales.
Take the tortuous opposition party political policy proposals on RDA’s. Firstly the Conservatives and the Liberal Democrats said they would scrap the RDAs, then when they start thinking about function - which should have been their starting point in the first place - they now see the need for some regional function and rush to suggest a new form. John Thurso, the Liberal Democrat spokesperson has now said they would introduce ‘Regional Enterprise Boards’, whilst Caroline Spelman, the Shadow Local Government Secretary now says that the RDAS will ‘therefore evolve into ‘local enterprise partnerships’.
From a starting position of getting rid of the form, they now have jumped into another form without really appreciating that we need flexibility and variation depending on location and functional need. In short, as Paul Carter rightly states ‘building blocks’ of groupings are required. However, these need to be linked to specific function.
In economic terms, the need for flexible institutions and a greater focus on purpose is vital for 3 key reasons.
We have polycentric sub regions and counties.
We do not have fixed geographies or single coherent entities. Our Urban Mets of Dudley and Bury and our towns of Bury St Edmunds, Tonbridge or Burnley have strong economic identities forged through centuries and need nurturing not squashing under overly clunky singular sub regional economic visions. Our counties, sub regions and cities are not ordered neatly. They do not always have a central county town or a comparatively even growth and economic identity based around the CBD (see previous blog).
Societal and environmental trends are moving us to localisation.
Societal trends, environmental concerns and cultural moods are telling us that we should we thinking about localising, reducing economic footprints andmaking economic decisions which are closer to people and communities, not just aggregating them up. As its stands we are in danger of hollowing out our appreciation of district shopping areas and local economic activity - delocalising our economy.
Economic themes have a variable spatial fit.
The correct scale for delivering on skills is not the same for transport, or for the benefit system. The best and most efficient scale at which to deliver onpolicy and services is not the same scale for all topic areas or the same by geographical location.
We therefore need forms, which are more able to be temporal, differentiated and nuanced by place. Assumed blanket solutions such as sub regions or Statutory City Regions will not be the way we need to progress in all locations, and I suspect many urban local authorities who are part of emergent cityregions have significant doubts.
To progress to a greater flexibility, we need to build on the existing power shift toward local government, allowing local government to drive county,regional and sub regional agendas, moving power over economic decisions away from Whitehall. This required variable and flexible geometry cannotcome with fixed institutional strings attached. A flexible form must follow function and power must be transferred to collaborating local authorities in this.
So can we now please start having more of a debate which at its core majors on flexibility and appreciates that form must follow function – creatinginstitutions if need be, but as an end point of a process which local government gets the power to shape.
Neil McInroy is chief executive of the Centre for Local Economic Strategies
Doing ‘more for less’? We are going to need more!
As recent figures from the Office for National Statistics reveal we are still in recession. Furthermore, as the reports from the Joseph Rowntree Foundation and the Industrial Communities Alliance reveal, unemployment and inequality is rising. A Local Government Association report in March also pointed out that 41% of Local Authorities were experiencing an increase in demand for services for the unemployed or those at risk of unemployment and 57% were experiencing an increase in demand for social housing.
We are now and in the future, going to have more social need and demands on public services, just as the proposed cuts start to bite. We are in a horrible absurdity – in a time when demand on public services is going up and likely to rocket - there is going to be less capacity and a reduction in supply of funding for projects and programmes to help soften the effects.
With no signs of a focussed Keynesian stimulus on frontline services fuelled by tax rises, there is now a growing consensus around a recognition that we just need to get by on ‘more for less’. However, let’s be frank, this is not going to work on its own.
‘More for less’ whilst helpful as regards to driving greater levels of innovation, and cutting down bureaucracy, is likely to be hopelessly inadequate to a significant increase in social need. It will not be enough to avert a new wave of social and urban decline, and all its consequences.
We cannot trust ‘more for less’ to squeeze out more from a reducing purse. In all likelihood, we are going to need to start averting the problems and getting ‘more’ to frontline services and activity in the short term.
I am not arguing agin the whole concept of ‘more for less’. Initiatives such as ‘total place’ are important as a means of assessing the total contribution of the public economy and assessing how more can be done, with a declining overall public sector spending purse. There is also the need for progressive procurement processes and a greater understanding of the beneficial multiplier effects of public spend, as indicated in work undertaken by CLES and APSE.
However, there is a real need to lift our heads up and frame this era around a broader discussion and prioritised debate around paying for much needed local services. In the absence of short-term political will to achieve more through taxation - what is open to local government and localities faced by rising demand for its services and less money to provide them -how can it get more?
It’s not going to be easy, but here are two things we need to look at.
More of a local state: More local power and resources
At present, we have an inadequately ‘tooled up’ local government to deal with the issues on the front line. We need more powers and resources to local government so they can tailor local economic, skills and welfare policy which are bespoke to local circumstances and allows them to shape their own economic destiny and avert decline.
I agree with the New local Government Network in their recent publication –Capital Contingencies, in which they argue for a need to increase the amount of money available to Local Authorities through new funding mechanisms to aid infrastructure.
However, alongside infrastructure, we also need more powers and resources deployed locally to allow local government to harness wealth creation so it can invest more in welfare, skills and education.
More commercial investment
This is not just about the public sector, it is time to see the commercial financial markets doing more. They, like us in the public sector are interested in averting decline. This week, I was at the launch of the New Economy Working Papers, published by the Commission for the New Economy and heard a presentation of a paper on the equity market in Manchester and the North west, co written by my one of my CLES colleagues- Adrian Nolan.
In this paper, it is clear that in thinking about the local economy, Local authorities need to improve their approach to capital markets, but more importantly commercial investment needs to change its attitude.
We need more ‘patient capital’ which sticks around and is more responsive to localities and does a lot more than be spatially footloose and hone in on fast returns. For example, the research found that the average financial deal size in the North West is the lowest across all the regions at £290k, compared to a £790k national average and £2m in London.
Furthermore the introduction of a Community Reinvestment Act as advocated by Urban Forum, and others supported by CLES research, is a practical change which can assist in addressing financial deserts and financial exclusion in communities.
Overall, new behaviours and culture from investors and the capital markets are required as well as new legislation to support this change.
Lets not sleepwalk into a belief we will be OK through a narrow strategy of ‘more for less’. The scale of need is going to be too large.
Local government needs an empowered context for public services with financial levers coupled to investment markets which deliver more!
