Daniel Goodwin

It’s the economy, so let’s not be stupid

This week’s announcements on the economy by George Osborne, whilst chilling, can hardly be a surprise to anyone given the trajectory of recent events world-wide and particularly in the Eurozone. Perhaps we could take a Micawberish view, in anticipation of Dickens bicentenary on 7th February, but that feels like too big a risk, particularly on this side of an economically cold Christmas.

With this in mind, I was struck today by the underlying theme of articles by Will Hutton (Sunday Observer) and Robert Watts (Sunday Telegraph), that of the need for a coherent vision for what future economic growth and survival might look like. For whilst Hutton predictably claims that Osborne et al are clueless, and Watts equally predictably asserts that there is an emergent vision, both are clear in their own ways that there needs to be a national agreement about vision and priorities.

I have also been thinking in the last week or so about what an intelligent local response to the challenge might look like, arising from a recent NLGN event on Local Government’s role in economic and social growth and the findings of Demos in its paper, Good growth, which concludes that:

…we now have an opportunity to respond to the recent economic crisis in a way that develops the type of economy that we want to see. We hope that by presenting this work in the context of the wellbeing debate we can sharpen the understanding of policy-makers on the various methodological and conceptual tools that are available to them as they seek to make progress in a way that is not only economically productive, but also socially and environmentally sustainable, and in tune with the wishes of the public.

In previous blog posts, as the extent of the economic crisis has revealed itself, I have reviewed a range of economic issues and questions as they relate to local communities and governance. The following also provides links to the posts: focusing on an area’s core economic offer and opportunities; rethinking the relationship with business as the taxation relationship change; exploring the relationship between economic sustainability and local culture; establishing local social care costs as a manageable overhead rather than a burden on the economy; seeking to create innovation in the public sector on the basis of what is affordable.

The simple foundation of this thinking is that we should take a strategic approach and consider together what sustainable growth might mean. That does not mean rigid five year plans which will only ever be over-prescriptive and aspirational, but it does mean taking a view at the local level which is more nuanced than simplistic responses to the market. Such an approach requires a strategic determination of economic direction which acknowledges the importance of geography, spatial policy, and demographics in setting a course for the future: Will the chosen economic direction address the longer-term, intergenerational implications of a decision’s impact on community and place? How will it contribute to quality of life and to social cohesion, both local and national? What does it do to address the three key  skills, wealth distribution and costs of social care, with their attendant future overheads? How will the various sectors join together to attain the right kind of growth for a given place?

These all have implications for the community dimension: How are we helping our communities to have a clear understanding of purpose? In the past some communities were very clear that trade, commerce or agriculture were at the core of their sustainability. Many have suffered from not being able to be nimble enough to recognise and adapt when global trade flows meant that this was no longer the case. Yet some are working hard to articulate just such a vision, Forward Swindon being a good example.

Whether it would be possible to set out such a clear purpose in the 21st Century is yet to be seen, however what is needed is an understanding of the determinants of capability, which are dependent on aspects such as culture and historical confidence, literacy and numeracy, advanced skill levels, the state of public health, the vibrancy of the third sector and the media profile of a place.

Whilst national government can help create the backdrop for all of the above, the drama takes place at the level of local economies and between them. It should be a key role of local government and other public sector actors to develop roles which bring them ever more closely together with the private and voluntary sectors. In this interplay, we need to address questions of opportunity and to take an entrepreneurial approach to the management of risk, rather than seeking to remove it. Vision, strategy and decisions need to be made together, in effective partnerships which are able to be both timely and considered in addressing key issues, and regulation of activities needs to be constructive, assertively contributing to the achievement of sustainable growth. The fostering of intelligent inquiry and an understanding of global flows are essential to ensure that this is achieved

Such an approach requires leadership, bravery, strategic alliances and a determined approach to governance which can make things happen. Whether or not there is a Mayor in place to engage with this, it is certainly arguable that this requires a mayoral approach to the needs and future of a place, which is not restricted simply to governmental functions. At present it is unclear whether the framework exists across the country to enable that to be achieved and the Government’s Local Enterprise Partnership initiative has yet to demonstrate its potential, with organisations such as the Centre for Local Economic Sustainability (CLES) fearful that the private sector will withdraw from LEPs in the absence of  resources and proven potential.

One of the most enjoyable parts of my year is an annual talk at the beginning of December for the local Chamber of Commerce. Last Thursday I put the following questions to them, because I think that answering them, for any place, is key to unlocking the conundrums outlined above:

1.  What does economic growth and sustainability mean in the context of our place?

2.  What does economic success look like for it and its people?

3.  How do we address capacity and capability in the community and the workforce?

4.  How do we identify the hard decisions that need to be taken, and take them together?

5.  As an economically resilient place, what is our responsibility to UK PLC, what should our district’s Corporate Social Responsibility (CSR) response to this challenge be?

6.  How do we ensure that we engage with business to address local economic sustainability as the relationship between business rates and local tax spend is re-established?

And a question I did not ask: Is it inevitable that the next ten years is a ‘lost decade’ or could it be a foundation decade, rebalancing the economy and our communities for a healthier future? Without being stupidly optimistic, I think an intelligent approach is to try our hardest to make it the latter.

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This entry was posted on December 4, 2011 by in Local Government Futures, Place and planning.
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