A Tale of Ten Cities

Last Tuesday, I went down to Birmingham for the launch of a report on “Creating Good City Economies in the UK”, jointly produced by New Economics Foundation (NEF), NewStart magazine, and the Centre for Local Economic Strategies (CLES), and funded by Friends Provident Foundation. Over the last 12 months, they’d visited 10 cities — Manchester, Birmingham, Cardiff, Belfast, Glasgow, Sheffield, Liverpool, Bristol, Leeds and Newcastle.

What they found was, on the one hand, not surprising. Standard “mainstream” economic approaches are failing to deliver positive outcomes for communities. Yes, there are great examples of thriving city centres with expensive high-end shops, offices, flats, cultural quarters and transport infrastructure. But the benefit of these doesn’t spread to the communities which lie just beyond the new and sleek and shiny. The inequalities are stark, and they are emphasised by proximity. Trickle-across, like trickle-down, doesn’t happen. If you live or work in or near any of those cities, you’ll be well aware of the disparities in income and wealth and well-being.

Alongside that though, they also found great examples of “ground-level, bottom-up” developments rooted in empathy and personal connection, addressing local need through local action and community enterprise, and demonstrating what will become the new mainstream approach. Organisations like Beautiful Ideas (Liverpool), Ouseburn Trust (Newcastle), Portland Works and Regather (Sheffield), are building with local people and local resources, and are a world away from Councils’ aims to attract private sector investment through competing financial inducements.

The report identifies 10 steps to a good city economy. For me, these 10 steps aren’t just about good city economies, but about all good local economies. And it may be that focusing economic development on cities and city-regions is doing things on the wrong scale. The current orthodoxy has failed people in towns like Middleton, Blackburn, Burnley, Blackpool, Oswestry, Daventry, ……across the country. Often, identities and relationships and communities are founded on much smaller geographical areas.For example, on Marsh Farm estate in Luton (also working in partnership with New Economics Foundation) they are trying to build a more local economy in a disadvantaged area — engaging the estate’s residents in looking closely at where their money is spent, and at how they can develop ways to keep that money circulating in Marsh Farm itself, rather than leaking out to more distant businesses and their shareholders. Their ideas to plug the economic leaks include setting up their own car repairs and MOT service, fast food delivery, a membership-based family-friendly social club, a building company, a children’s indoor playground, a community organic farm supplying fresh vegetables directly to residents, and a childminders’ agency. Achieving that would build more than an economy.

My summary of the 10 steps proposed in the NEF/CLES/NewStart report is as follows:

• focus more on making our food and energy and infrastructure more sustainable
• shift economic policy from supporting big business to facilitating grassroots enterprise
• stop big organisations sucking money out of local economies
• value empathy and citizenship and public service more highly, including in business
• encourage businesses to make strong connections with, and contributions to, the communities in which they operate and are based
• develop people’s natural sense of common ownership and stewardship for shared local resources and assets
• take economic planning and decision-making away from distant technocrats, and engage as many people in it as possible
• devolve resources to the scale at which people feel informed and empowered to contribute to how those resources are allocated
• revitalise economies through locally-run financial institutions — credit unions, peer-to-peer lending, co-ops and community benefit societies, mutual funds
• stop skewing economic development activity by measuring success through short-term economic impact, and measure it instead through longer-term impact on well-being, networks of diverse and resilient local businesses and community organisations, maximised use of local assets, money circulating locally and not leaking out.

Who’s going to do all that?

Some can be done by redirecting and refocusing existing activity in central government and Councils and structures like Regional Development Agencies and Local Economic Partnerships. A new focus could give them some new possibilities and some hope.

More can be done by tapping into — or, to put it better, helping to feed and grow and bring to fruition — the small organisations which are already working hard to address poverty and inequality in their communities. They are a welcome reminder that empathy and solidarity are actually the norm, not rare or unusual qualities.

Possibly most important, though, is local government. Hollowed out by budget reductions and privatisation, Councils need investment in their capacity to help progress the 10 steps — listening and discussing and working with local people to help make connections and build networks.

And then there’s the issue of money in people’s pockets.

According to the Bank of England, their quantitative easing (QE) programme between 2008 and 2012 added £600bn to the wealth of the wealthiest. I make that not far short of £10,000 for every single person — adult and child — in the country. Just one-tenth of that would have brought nearly £5,000 into our house, and thousands into every house on the street and in the town. Instead, most of it will either be sitting in off-shore accounts or inflating property prices.

That kind of money needs to go into local infrastructure and into the pockets of people who will spend it in their local economy — that doesn’t mean HS2 or motorway expansion or Tesco or Aldi or Sports Direct or McDonalds or Sky or Virgin or Amazon or Costa or the big 6 energy suppliers. I could go on.

It’s time for a new economics, Universal Basic Income and a beefed-up tax system