All posts tagged: Local Markets
Local Economic Development is as much about setting the conditions for future success as immediate short term gains. Local Enterprise Partnerships (LEPs), have to look beyond the immediate national and global economic concerns, build up power and ignite a process toward a longer term shift in the economic destiny and resilience of local areas.
Of course, all the LEPs differ in size and history, and the challenge for each Local Enterprise Partnership (LEPs) is very different. In some areas, LEPs have emerged from pre-existing economic partnerships and groupings, with staff, some existing resources through Local government, and well established plans of action. However some LEPs are new, have no heritage, cover new economic geographies, and have limited experience of joint working.
In some areas, LEPs are building on existing growth, as they cover areas which have some economic success and a diverse range of successful businesses. However, in many locations, due to decades of de-industrialisation and the failure to tackle systemic local economic problems, there is no short term fix. Their journey will be harder and longer.
Nevertheless, they all share the possibility of doing good, through the ‘traditional’ standard fare open to them as set out in the Local Growth White Paper.
The 22 new ‘enterprise zones’, include incentives via tax breaks and simplified planning. There is also stimulus funding via Regional Growth Fund (RGF) and Capacity Fund, and greater connections with national priorities around digital and transport infrastructure. I am confident that some Local Enterprise Partnerships will be make a difference. However, even in relatively successful areas, these policies still need to avoid the pitfalls and be used effectively.
In other areas, these policies will struggle for traction and impact. This potential struggle for all LEPs is of course framed by national and global economic turbulence. However this is beyond their influence. Therefore, they must grab real influence on the key pistons of local growth- capital, labour and have a focus on local economic inputs such as innovation which are often ermbedded within local culture, place and society.
Many areas are starved of capital investment. The funds through the RGF are welcome, but for some areas, offer up a meagre appetiser, to the hearty meal which is needed. That is why LEPs’ working with Local Authorities and private finance must also strive to establish their own investment funds. Furthermore, the idea of an ‘area growth budget’, devolving Whitehall budgets to areas (as outlined in the city finance commission report), would be an excellent means by which LEPs, working with Local Authorities, could potentially achieve greater weight around investing for growth
Many parts of the England, in their industrial heyday, prided themselves on having a uniquely skilled, inventive and productive labour force. This is clearly no longer the case in many areas. The RDA’s made little impact into skills; and nationally we have reorganised and tinkered with the ‘skills game’ with little success. LEPs must not make the mistakes of the past. They must prioritise skills, forging significant links and influence over the Skills Funding Agency ensuring that employers lead on skills.
Finally, whilst mindful of mission creep, LEPs need influence over the life of place and place-based factors which nurture creativity and innovation energy. This includes relationships with the community and voluntary sector, and factors including social capital, investment in public realm, quality of life, culture and the arts.
These aspects, may be seen as irrelevant and a distraction by some. They are also clearly the kind of things which are most likely to be forgotten or ignored by LEPs.
However, the ways in which businesses identify and have connections with the ‘life of place’ are well established inputs and conditions for growth. These need to be seen as powerful and are exactly the type of things which can create real penetrative and enduring depth to economic development work. Place policy is economic policy.
LEPs must move one step beyond the opportunities afforded by the standard policy fare. Whilst short-term growth is sought, they must consider the deeper underlying economic conditions and be mindful of economic resilience in the long term.
I recently visited some local authorities in the north-west and midlands. These LA’s have had significant cuts and no longer received regeneration monies. These authorities had significantly reduced staffing numbers and were in the midst of transforming their services, working more effectively with reduced resources.
They are unenthused by central government and were rejecting much of the rhetoric around ‘big society’, or a free market for public services. However, they are not some local big state, refusing to change. They are embracing service pluralism and new ways of working.
These authorities were mindful that a rapid and hasty divestment and outsourcing of services would be folly and a bad use of scarce resources. Folly because they knew there was a lack of delivery capacity within their particular communities and Voluntary and Community sector. And a bad use of resources, because they knew that rapid outsourcing may bring short term savings but longer term costs in terms of hindering service integration, shared outcomes and benefits to be accrued through strategic direction.
They knew that to create outcomes which made inroads into an issue such as child poverty, they needed a transformation in cross departmental and cross agency behaviours, thinking and a new plural approach to the problem. They knew this was never going to happen by just letting out a contract to the lowest bidder.
For all the central government brouhaha around the transition from a big state to big society and the need to encourage more social and private delivery of local public services, some local authorities know what needs to be done and are grasping the nettle brought on by the cuts.
They know, as they always have, that in many instances, they are not always the most efficient or the most cost efficient provider, but they also know private or social delivery is no silver bullet.
They know that the demand on public services will continue to increase, but they also know someone needs to strategically oversee need and demand.
They know they cannot afford to work in the same old way, and are therefore, embarking on radical service change.
They want to and are actively encouraging community growth and building neighbourhood and resident capacity to do more themselves, but they also know this takes time.
They know that cooperatives and mutuals and a plethora of new delivery vehicles have potential, but they are wary of seeing them as cheap options.
They know that they must empower local people, but they also know that markets can disempower.
They are sharing services, but are mindful of democratic accountability and sovereignty issues.
Above all, they are creating a new era in local public service, inspired by an shared outcome focused place leadership, filled with a belief in public values. For them, commissioning of in-house or external activity is not just about balance sheets but about building social justice, addressing inequality, nurturing the environment and protecting the most vulnerable.
These authorities are acting big.
‘You know what, I am not sure I got into local politics to just manage contracts’. This statement, uttered to me a few weeks ago by an experienced local (Conservative) councillor, goes to the nub of fears around the future of local government
Should local government and elected members just outsource all service contracts to the ‘big society’ and commercial deliverers of services and/or should it play a democratically accountable place stewardship and coordinating role? I would argue that too much of the former, fetters the latter. Some areas may be fast approaching this tipping point and we need a much deeper debate about the consequences.
The cuts have created a dynamic and head of steam which make outsourcing a strong option. Firstly, the big society and commercial delivery are perceived as more efficient. Secondly, it gets the costs isolated as part of a contract and reduces the liabilities. These factors have created a dynamic where direct service delivery responsibility is moving away from Local government.
I am not suggesting that the use of the private and social sectors in service delivery is a bad thing. Quite the reverse, some services have always been delivered by a blend of public, private and social sectors. A plurality of service delivery is a good thing. However, there is a key place stewardship role, which too much willy nilly and short term outsourcing will kill.
This place stewardship role is about the qualities and values of public service. It is the ability to ensure a sense of fairness, and equality of access to services. It is also about governance and connecting up different services in creative ways. And fundamentally, its about sovereignty and maintaining direct democratic accountability over a service.
As a resident, in inner city Manchester, I quite like the fact that I can speak to my local councillor about a range of local services, knowing that she and local cabinet colleagues are accountable for them. Even if I don’t like how the service is run, I can even make a vote for an alternative candidate and party. I have a connection, I understand the connection, as does the councillor and all my fellow residents. In contrast, how would I influence a service, if all the local council does is manage a contract, I can’t vote against the CEO or the board of a large commercial company?
Also, are we weakening the power of local government to act as key lynchpins and actors in times of stress? All places are at the vagaries of unpredictable events and ongoing environmental, economic or social shocks. When these shocks occur, the strategic place steward role of local government is to mobilise quickly, harness resources, relationships and reshape services and activity accordingly.
Furthermore, what about opportunities? A major investment opportunity or securing a major sporting or cultural event, is achieved through strategic capacity across a range of partners, drawn together by local government.
Can these fundamental stewardship roles be achieved if all or the majority of our services are outsourced and part of legally binding contractual arrangements? It could well be that outsourcing on a grand scale, weakens the stewardship and strategic role of local government. In doing this we are making our places vulnerable to adverse change, and leaving our places weakened in attempts to realise fleeting moments of opportunity.
All of this is absent from present debate, and the localism bill is silent on them. The future has to be about a strong local government which creates the conditions and ensures the health and wealth of local places, communities, businesses and residents. It can’t do this alone, but it must retain the capacity to lead and steward place.
Good local economic policies are never enough on their own, we also need plans and strategies. This is not a new problem, local economic strategy and planning has been limping for a long time.Some places lost their economic and industrial raison d’etre 30 years or more ago, and despite lots of regeneration and economic effort, are still trying to find a new economic destiny. Furthermore, with the advent of economic recession, and with ongoing threats of peak oil and climate change our planning and strategy is woefully inadequate.
Some recent local economic policies are welcome. However, Local Enterprise Partnerships (LEPs) are not proven as a punchy economic planning vehicle and in many instances, are mired in capacity issues. The Regional Growth Fund is fine, but is dwarfed by the deep and rooted economic structural problems some localities face. Recent consideration of a return to some form of 80’s enterprise zones, smacks of a lack of ideas and is old thinking for very different times.
Furthermore,even if these policies, were sufficient, we are also seeing a thinning of local economic knowledge and capacity, via the loss of personnel and resources.Local authority economic development departments and associated activity are reducing, as money is being diverted away from them, to protect frontline and statutory services. This loss of capacity is also reducing the ability to make the vital networks and strategic links at various scales between economic, social, cultural services and policies.
How do we get a big (productive) society, if it is merely left to the understaffed LEP to forge the strategic connections between the social economy and large commercial investment? Or as a director of economic development said to me ‘where are the LEPs in matching large work programme contractors with a local understanding of demand?’
Let’s not be mistaken, there is an emerging crisis in local economic thinking, policy and strategy.
Some may believe that local economic development is insignificant to the UK Plc economic policy as a whole, or unnecessary state meddling. Strategies and plans may also be perceived as old hat and part of a public sector bureaucracy which has got out of control.It is folly, dangerous and wrong to think this.
To compete as a country, the constituent local parts play a vital role, and we need to do what every other country and successful locality does and strategically plan our local economies. Even in the more economically vibrant parts of England, we need to maintain an edge and restlessly assist economic success in perpetuity, through forward thinking strategy and plans. Our international competitors are.
Of course, the absence of strategy and some scattergun policy may give some economic success and growth, but lessons from countless localities at home and abroad, tell us that it will tend to be more spatially uneven, make existing social and economic divides worse and will be transient and footloose, moving on, come the advent of cheaper labour or costs elsewhere.
Sound economic strategies and plans and linked up development policy are not a predicated on large amounts of public resources. For instance CLES’s work on economic resilience majors on creating new place based economic strategies which focus on the conditions for success, reducing the need for heavy interventions in the future. This work highlights how place policy is economic policy. Who wants to invest, live or create wealth in a bad place?
Local and Central government needs to urgently start taking local economic development a lot more seriously and start thinking about new ways of delivering on it. Disconnected policies and thin narrow strategies will not do the job.
TheRochdale Pioneerswould be turning the grave if they thought cooperatives were about ‘more for less’! It is laudable of theCabinet Officeminister Francis Maude to set out his vision across public services of a ‘rights to provide’in which mutuals and cooperatives would herald in ‘radical shifts in ownership, accountability and financing’ in public services. I am all for experimentation, innovation and creativity in the delivery of public services. However, there are valid questions of creeping privatisation or whether the delivery of a public service such as a Sure Start centre can be likened to the retail offer of John Lewis. Furthermore, we cannot assume, that cooperatives and their rich heritage will be some elixir for public sector cuts.
I am not the best placed to speak up for the cooperative movement, but my raw enthusiasm for the movement is grounded in the core values of theRochdale Society of Equitable Pioneers, who first set out the principles on which co-operatives around the world operate to this day. These are now reflected in the International Cooperative Alliance, who state that:
‘Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others’
These values, to my understanding, must be reflected in operational terms to indubitable standards of effectiveness. Standards of employment, cooperation and of service. Efficiency is not the main driver here. We must ensure the proposed flourishing of cooperatives in the deliver of public services, reflect these values and standards. For example, they cannot be a Trojan horse for inferior employment terms and conditions.
Place leadership is something which you do not hear a lot about at the moment. We should be mindful, that local government performs vital overarching stewardship and coordination of activities and services within the places we live. However, the deployment of cooperatives, could lead to the atomisation of service delivery within any given locality, through splintered ownership. This will be recipe for a local government losing more strategic capacity. This indeed would be ironic give the cooperative movement is all about collaboration.
As Francis Maude says lets ‘challenge traditional public service structures and unleash pent-up ideas and innovation’. However, we must not unleash an abuse of cooperative traditions, which fragment and denude the standard of public service delivery, and create a hollowed out local government who can no longer effectively steward the destiny of local places.
For all the talk about how bad Britain is and how we need a big society not a big state, it is worth remembering that the communities and places of Britain have some great strengths. In the rush to cut and change, we need to be careful that we do not inadvertently start undermining some of the good things about the way we live and jeopardise the resilience and strength of many local places.
I write this having just returned from a trip to Australia. Invited as an international guest speaker to the Melbourne Place Making Series and having then kicked off another CLES economic resilience pilot project, followed by a lecture tour with villagewell and PPS - Project for Public Places, I saw, discussed and debated many old and new places which did or did not work well. Some places lacked things that we in Britain often just take for granted.
Economically Australia is in a much better place than the UK, buoyed by a mineral rich commodity based economy. However, many local places suffer from low density and car dependency dominated by housing with limited local economies and social networks. Australia and Melbourne in particular has great thinking and plans and is making strides in densifying urban communities as part of its population growth trajectories. With Aussie boldness, they know what they need to do and are doing it. Walkable, low carbon communities with centres of local economic and social activity are the aim. However, Melbourne craves for some of the communities many of us live in here in the UK.
A wee walk to the locally owned shop, community centre or voluntary group, a local community garden or a incidental meet with a neighbour, are things we take for granted. However, this is the social and economic activity which is important for creating a sense of place and vital for human well being. This is the Big British Society and we must make it even better, shield it where it is under threat, and grow it in suburbia, and those small towns and villages and inner city places where it has never existed or has been eroded.
We must be wary of assuming that this type of living is an indubitable presence, inscribed in perpetuity in the fabric of British life. At this juncture, this type of place and living is vulnerable to forces which ignore local economies and think the global economy is benign. It is threatened by centralism which thinks the economy is just about UK plc and our trade links with China. It is undermined by cuts to voluntary activity and the centres and buildings where community activity takes place. It is weakened by local government which no longer has the resource capacity to effectively steward and manage local places.
Many people in Britain do not enjoy living in great places. Inequality is growing. However, coming back to Britain has made me realise how precious (and vulnerable) some great places are and how we really need to cherish and create them for all communities. This is not some ‘good old blighty’ nostalgic trip. This is informed by best practice in what makes great places. For all the talk of big society, small state we need a big awareness about what we could be losing.
“We are the north”, “we are the south”, “we are the east” and “we are the west”, rang around the Etihad stadium in the regenerated Melbourne docklands two weekends ago as Melbourne Victory thrashed the visitors from the Gold Coast 4-0. The spatial references were based on the compass points of the old Melbourne victory stadium.
Whilst not a patch on our own football chants, it stimulated myself and my host colleague who directs urban revitalization at VicUrban (the Victoria state development agency), into another conversation about how cities are a melting pot of different places. We laughed, as we had already been having this conversation intermittently all the previous week. CLES work on place resilience had brought me here to Melbourne, and this soccer game was meant to be an opportunity to have some time away from the subject!
Like our own major core cities, Melbourne is characterised by renewal and managing change. Victoria State Government, the city and VicUrban are having a ongoing conversation about the changing function and role of the various places which make up this rapidly growing pacific rim city of 3 million people, made up of 31 local Authorities.
Their plans are to create a multi centred city, which aims to retain the recent renaissance and effervescence of the Central Business Disrict(CBD), whilst developing the various secondary centres.
Take one secondary centre - Dandenong. This is potentially the cultural jewel of Greater Melbourne, with waves of immigration having organically made this an underdeveloped microcosm of Australia’s multiculturalism. Like Bury in Manchester City Region or Bradford in Leeds city region, Dandenong is in bed with and part of Greater Melbourne and to some extent plays second fiddle to the CBD of the greater city region. However, it also has its own Local authority, and its own vibrant identity and economic functionality. Like our own ‘secondary places’, the trick is to create economic development activity in these places, which does not erode the success of the CBD. They can’t collide. They are forever joined and are in bed together and they need to cosily ‘snuggle’ together.
However, there may be a problem in the UK. In much thinking, economic success is often conflated to mean the CBD or the peripheral business parks. In the ongoing Multi Area Agreement process as well as with the new local economic assessment duty (where applied at a pan city regional basis), there is too little thought given to the 'secondary' centres.
City regions are as much about Bury, or Bradford as they are about the city centre. These places should never become economic dwarves and/or dormitories which merely serve the CBD. We cannot let CBD’s suck the economic identity out of our local places, or let economic development of the CBD weaken local economic regeneration. They need to snuggle with the dominant partner which contains the CBD.
If we are to forge new city renaissance, our enhanced city region thinking should create true polycentricity, allowing local place identity to shine through and support the forging of new economic futures in these localities.
In espousing this view, colleagues have said I am either on a nostalgic heritage trip, and/or running against the logic of economic success. Maybe, but the geography of economic growth of recent times has not really been all that successful. Spatial trickle down is exactly that and our city regions are more spatially unequal.
I believe a place based economic function which snuggles places together, makes future sense. It is in these ‘local’ centres where place distinctiveness is most evident. These places are the guarantors of a richer more meaningful aspect of a cities economic landscape.
We also need to nurture local economic activity. Local centres within cities are where the most vibrant manifestations of ‘localisation’ takes place, as regard land ownership, non chain and independent local economic activity. Bury market, like the Afghan Bazaar or Little India in Dandenong, are not some relic or weird novelty, but a demonstrable and important part of the cities economic identity.
The success of Bury and Dandenong and the wider city regions to which they belong are intrinsically related to all the places within a city region. The challenge is getting all places within a wider city region to economically snuggle.