Daniel Goodwin

Geography and public sector macro-economics

Most of the discussions I have been involved in recently have been focused on analysing the emerging governance framework in the run-up to the Comprehensive Spending Review (CSR). In particular they have considered the underlying macro-economics of the public sector. By necessity perhaps, the national discussions have been largely geography and social analysis free. Quite a large proportion of the discussion has therefore ignored the impact of proposed change on different geographical communities, working against the flow of several years work in local government on the question of ‘Place Shaping’.

Obviously this is not just about the money, it is about how each community works and its exposure to risk arising from change in the governance framework. I believe that there will be trouble ahead if the macro-economic changes are not evaluated to assess how they will take into account geographic variation. For example, to what extent should any solution take into account the reduction in local GDP that it causes? Or, with the suggested changes in benefits to enable people to more easily access work, what if that does not create an employment pool that employers are prepared to engage with? It is clear that we need to be able to model how this might vary by place and how the various sectors might interrelate in solving local problems and challenges.

Amartya Sen’s wonderful book The Idea of Justice is of great relevance here. It goes beyond the apparent fairness of equality of opportunity to consider the question of capability, both in individuals and communities, and how it can be created and developed. Accordingly a further consideration for us should be the local capability quotient and how it varies by geography. The recent BBC/Experian review of economic resilience is a useful starting point.

How will the local population engage with and take advantage of change? Here we’re not simply considering the impact by area of budget reductions and service changes but also relates to the percentage of a population that want to volunteer, their personal capabilities and networks of influence and the impact that they in any case can have on an area. How close is the place to a positive or negative social, economic or environmental tipping point?

Consideration of these issues prompts thoughts on what the vision is for civil society, and indeed who should be having it. This can lead to differing views within all three major parties, ranging from ‘we need to develop ground-up initiatives from communities’ to ‘that’s what elections and elected representatives are for’. In my view, these are not mutually exclusive, but there needs to be a commonly held understanding about how the locality works, to support the development of both community and democratic capability.

For local public sector leaders, there is also the question of how to engage with such changes, because their implementation will have a major impact on how to balance the books in the public sector accounts of place. With cost savings potentially biting hard, there is also a need to consider the local impact of supply side matters, such as national tax and benefits reform and flexibilities, changes locally to commissioning and charging mechanisms, and capacity and capability of workforce to engage with emerging local strategies.

The timescale for such conversations is very tight, there are many distractions and we are all interdependent on the success of each other. I am alarmed that some are not yet at the stage of developing outline strategies and some appear only now to be starting to recognise the potential scale of change. I’m therefore interested in exploring the following questions:

  1. What will be the unforeseen policy consequences of emerging proposals?
  2. In particular, what seeds of future capability, capacity and social change are we planting now?
  3. How can we best evaluate risks relating to these approaches?
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This entry was posted on September 20, 2010 by in Local Government Futures, Place and planning and tagged , , .
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