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Could localism, give a helping hand to the poorest?

What difference will more power to cities and local government bring to tackling growing inequality and poverty?  We hear a lot about the difference localism will make as regards economic growth or local power (such as elected mayors).  However, what about social and local economic outcomes? 

The great hope of economic localism is that Local Enterprise Partnerships, cities and ‘city deals’ will herald in more economic growth.  As Nick Clegg, the Deputy Prime minister said at the launch of city deals:

‘Firstly, cities will have greater freedom to invest in growth. Secondly, having power over transport, housing, broadband.  Finally, the power to boost skills and jobs’

This is a traditional economic growth message, with a localist flavour.  It believes that with new powers and decentralised resources, areas can make a concerted effort at creating better local inputs for growth.  Eventually, this will pay off and the rising economic tide will lift all boats.  The poor will reap the rewards.

If we get significant local economic growth, this will work.  However, it might not.  Let’s never forget, economic growth did not reduce inequality in the good times.  Indeed, it often got worse in the boom years up to 2008.  So even if we get growth, city deals should look to do a lot more than merely replicate failed national approaches in tackling inequality and poverty or rely on the central welfare state.

City deals must surely look to tackle poverty by heralding in new local ways of harnessing economic growth and the associated wealth.  This would mean that wealth could be redistributed for social, education and skills development.  But how? Business rates?  This is a flimsy place to start, and the poorest areas have a disadvantage anyway.  It’s hard to see how economic localism can make a difference to poverty, without an acceleration of city deals to encompass education and the welfare system.  Local taxation may be the answer, but that is not on anyone’s agenda at the moment.

Also, there is a lot of hope riding on the growth option?  Many places do not have growth and it is probable, that many places will not get growth in the near future or in 5 years, 10 years, 20 years or maybe ever.   How does localism help addressing poverty and inequality, when there is no growth?

In this scenario, we will need to face the economic realities head on, and use greater local powers to build an alternative economic vision, which is freed from economic orthodoxies around chimeric growth.  Therefore, there needs to be a focus on the ‘local’ economy, servicing local demand and working to bring about better environmental, health and social outcomes.  In this scenario, new local powers should be used to steward the economy in ways which max on lifestyle, local identity and economic resilience.  This is not managing decline, this is appreciating that in the absence of economic growth, we can achieve social and cultural growth.  A great place, is not predicated on a growing economy.

The advent of city deals and more economic localism, is an opportunity.  There is a chance to forge new ways of achieving alternative economic outcomes.  Outcomes which focus on poverty and move beyond simple notions of trickle down.  Economic centralism failed the poorest.  We cannot let economic localism go the same way.

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