Can collaborative economics see Birmingham return to its glory days?

Chamberlain Square, Birmingham. Photo by Andrew Bloomfield

Birmingham is broadening its vision of good local government with a more collaborative, bottom-up approach. Can local economics in the region be similarly expanded through a shared vision of the common good?

It’s hard to avoid Joseph Chamberlain as you travel through Birmingham. From the Joseph Chamberlain College in Highgate to the Chamberlain clock in the city’s Jewellery Quarter, his legacy endures more than one hundred years after his death.

But as the city and its regions undergo a transformation of their economies similar to that seen during the reign of its famous mayor, it is ‘civil’ power rather than ‘civic’ control that is at the forefront.

As the city’s mayor from 1873-1876, Joseph Chamberlain took over the gas and water works and funded libraries, parks, art galleries and housing for the new industrial classes. In today’s era of austerity the region’s leaders are forging a new partnership with their citizens, and shaking off paternalism in favour of collaborative and collective leadership of services and places.

‘We don’t need a new age of Chamberlain and the mythologies are holding us back and making us more civic than we need to be’, Birmingham Council’s chief executive Mark Rogers told New Start. ‘If Chamberlain was an arch-exponent of local government, we now need an arch exponent of civil government.’

Civil – not civic – government

What ‘civil government’ looks like in the city is gradually emerging as Birmingham council sets out its plans in the wake of the government’s damning report into its operations. Sir Bob Kerslake was asked by the Department for Communities and Local Government to conduct a review of the council after a series of problems from the Trojan Horse affair to mis-managed finances and poor performance of children’s services. The underperformance of the city’s economy was also criticised; as Europe’s largest borough, Birmingham punches way below its weight economically and is home to a low skilled population and the highest child poverty levels in the country.

Indeed, the city’s heat map of poverty has barely changed in thirty years: more than one in three children in the city – 84,000 – live in poverty and youth unemployment is almost double the national average.

‘We don’t need a new age of Chamberlain

and the mythologies are holding us back’

The Kerslake Review – unveiled in December 2014 – didn’t hold back, criticising the council for investing in city centre projects while residents in out of town neighbourhoods were left without jobs or skills, shutting out local partners and maintaining a culture of ‘the council knows best’.

The city’s leaders have embraced Kerslake’s criticism as a wake-up call. Rogers wants to preside over the emergence of enabling council, one that devolves power to its local communities and that works with – not against – the city’s strong civil sector.

A raft of new initiatives is aimed at shifting the balance of power. Through the Stand Up for Birmingham programme, community conversations have taken place across the city around how citizens, businesses and charities can play a bigger role in their local areas.

A number of Social Innovation Zones are being planned, which will facilitate innovative approaches to public services and regeneration within a designated area, and a whole city approach to time banking is being unveiled.

Birmingham market in central Birmingham

A collaborative approach to local economics

In terms of economics, Rogers is keen to move beyond the one-size-fits-all policy that has seen local authorities and local enterprise partnerships (Leps) work primarily with private sector providers to boost growth and inward investment.

Just as the paternalism of the city’s past now feels outdated, so too does an economic strategy that is increasingly out of synch with the needs of its young population and that has failed to turn around its poorest places.

In a borough the size of Birmingham, focusing on high profile inward investment schemes has meant large swathes of the city have been left behind. Birmingham and the broader west Midlands region are splintered geographically and have failed to have a strong narrative about where their economic destiny lies. Mark Rogers has vowed that his council will do more to stimulate grassroots local enterprise and involve a plurality of actors in economic strategy, but has yet to set out that vision. What would a broader, more collaborative, local economic policy for the region look like?

That was the question posed by a New Start event held in the city last month as part of its Activating Local Alternative Economies programme. Led by Localise West Midlands, it brought together council officers and third sector and social enterprise representatives from Birmingham and its regions to discuss how greater collaboration between sectors could improve economic outcomes. For while the region’s local enterprise partnerships are working well at boosting the region’s growth, they are rarely looking beyond the growth agenda – at the health of the small businesses sector, for example, and how it can be joined together and linked with local supply chains. Or towards greater collaboration with the region’s social economy.

What would a more collaborative, ‘civil’ approach

to local economics in the region look like?

Karen Leach, co-ordinator at Localise West Midlands, opened the event with findings from her study into the impact of a local economic development approach that, rather than looking outside of a city for investment, makes the most of the networks, small enterprises, supply chains, community assets and human potential that already exist within a place.

Her Mainstreaming Community Economic Development report proved that businesses that come from and are rooted within their local areas help circulate money within a place and unlock greater economic power than inward investors that have no links to place and tend to extract money for shareholder value. Locally-led businesses are linked to better performing local economies with higher levels of job creation, social inclusion and civic engagement, the report found.

It cited examples of locally-led businesses including Birmingham Wholesale Markets, one of the largest in the UK, which sustains around 15,000 jobs; the Jericho Foundation, based in Balsall Heath, which sets up social enterprises to help disadvantaged people into work; and Encraft which provides support for low carbon projects.

These organisations – and many others of a similar scale – play a vital role in the economic health of Birmingham and its regions but do not currently feature in their economic strategy. Linking small businesses and social organisations together, allowing them play a greater part in local supply chains and the region’s overall strategy would change the economic picture.

‘Government is like an absentee landlord, focusing on inward investment which leads to a cycle of decline’, Leach said. ‘Good practice is the opposite. A virtuous circle of greater money circulation and greater commitment to a local area.’

A mural on the wall of Jericho Foundation

What is local economic development for?

A need for a broader vision of local economic development, one that includes and values small businesses and social organisations and that has a wider sense of what local economic development should be, emerged from the event. As Manchester has set out a civil economy strategy to broaden its vision of economic success, and Enfield is focused on its foundational economy, so too Birmingham and its regions are seeking a vision for a different type of local economics.

‘We have to shift the goal from one of maximising GVA to one of understanding who benefits’, one delegate at New Start’s event said.

The scope of current economic policies – set by the Leps and local authorities – is restrictive: businesses and organisations that could stimulate greater local wealth are left out of the picture; the fixation on growth leads to a narrow set of outcomes.  A broader vision and wider range of actors would create a local economics that works much harder for people and places.

One model for a collaborative approach to local economic development comes from RESO in the south-west of Montreal. Since 1989 this community economic development corporation has brought together the community, private and public sectors and trade unions with the socially explicit aim of being ‘a movement for good economic development’.

RESO’s collaborative approach creates a bridge between

the needs of the poor and of the local business community

When it formed, its mission was to halt the cycle of social and economic decline in its neighbourhoods. Today it is ‘abuzz with renewal’ after 30 years of a localised approach, working in particular with young people and the unemployed and providing hands-on support for local business, through training, advice and an early warning system of potential business loss. It joined-up economic approach creates a bridge between the needs of the poor and of the local business community, increases local procurement and leads to a virtuous circle of success.

But in Birmingham and the west Midlands, competing goals and a lack of opportunity for the ‘small’ to play a part have held back a more inclusive approach to local economic development. Small and social businesses are left out of the region’s local economic strategy and are treated differently to the private sector. One delegate called for a ‘level playing field’ between small and large, social and profit-motivated.

As the West Midlands Combined Authority gets off the ground, it needs to develop a shared vision of ‘good’ local economic development around which the region’s stakeholders – large and small – can unite and work together. Some starting points could be the inclusion of small businesses and social organisations within its strategic thinking – be that the local enterprise partnerships or a broader regional body; having the same offer for voluntary organisations as for private; and changing the expectations of local economic development from that of maximising growth to building the common good.

Co-working and incubator space at Impact Hub Birmingham

Working together for the common good

Birmingham and its city region does not yet have that vision, but it does have plenty of best practice around a more collaborative local economics, and ideas for what’s needed for change to come about.

Sandwell Council and its local NHS trust are embedding the proposed new Midlands Metropolitan hospital within its local economy, through the creation of localised supply chains before building has even started.

In the city’s new social enterprise quarter in Digbeth, a former industrial building has been turned into a co-working and incubator space for civic enterprise. Early participants in its Civic Foundry initiative were Black Country Make, a group of young adults building a digital factory and civic enterprise zone on their Wolverhampton estate, with help from a range of public and private providers.

Housing provider Ashrammoseley was one of the earliest to put economic activity at the heart of its housing offer and now has programmes to build skills, enterprise and social capital among its residents and across the city. It is helping the council develop the skills and employment opportunities of the eastern corridor development running from Birmingham city centre to its airport.

Its chief executive Jas Bains wants more to be done to join the dots between the social economy and the city’s economic strategy.

‘For me it’s a cultural issue. The social economy doesn’t have a place on the board of the Lep and the city council doesn’t always get it. I would like to see the sector collaborate around research and development and have access to a funding stream that helped find solutions to deep-seated problems.’

Other commentators have in this edition of New Start dedicated to Birmingham and its regions, shared examples of how public services can be re-framed and reformed and the need for more localised control.

Just as ‘community conversations’ across the city are building a more collaborative approach to improving neighbourhoods, so conversations between those playing a role in the economic fortunes of places should also be happening, to build a shared understanding of what good local economic development looks like and how – through collaboration – the region can get there.

• Read the rest of our articles from New Start in Birmingham and the west Midlands here.