Inclusive growth is a no-brainer. But how can cities make it happen?

The argument for inclusive growth in our towns and cities has been won. But what does an inclusive growth policy look like and what can places do to drive it forward?

At this week’s Joseph Rowntree Foundation’s event ‘How can cities deliver inclusive growth?’, city leaders from across the UK, the US and Europe came together to answer that question.

Bruce Katz from the Brookings Institution in the US opened the event, with a call-out to cities to take the lead as the capacity of national government to solve problems – in the US in particular – becomes apparent.

‘We are now in a world where cities have to compensate for a national government that could scale back basic safety nets for disadvantaged populations. New localism is the only way forward.’

A burst of innovation around a ‘new localism’ is happening in the US, as cities rethink the norms of growth, governance, finance and participation.

All recent data points to the failure of current policies to help the benefits of economic growth spread more evenly around cities, with wages and upward mobility in decline and disparities within regions getting worse.

Expanded local networks

One solution, he says, is a more networked approach to local problems, with the public, private, and civic sector working together and using their assets to build inclusivity. Examples include community benefit agreements with universities and hospitals around local procurement and hiring, and the creation of a more social economy, with social enterprises running contracts.

He calls for ‘innovative inclusion’ policies, such as localities making interventions around local wages or raising local taxes to invest in infrastructure like libraries and parks.

His third key area is ensuring access to opportunity, through the provision of good transport links and affordable housing, financed through what he calls ‘metropolitan finance’, made up of a range of new intermediaries and institutions that can unlock public, private and civic capital.

How does this translate in the UK context?

Bruce Katz had four key points of advice for UK cities:

1. Pursue fiscal devolution: ‘Without fiscal powers, devolution doesn’t matter’
2. Bolster local networks
3. Accept regional variations: ‘Work out what makes your place special and pursue that’
4. Maximise public wealth: ‘Learn from Germany and Scandinavia to capture local wealth for the public good not private gain’

He argued that most governments are operating through a twentieth century perspective, and it is up to cities to embrace innovation and increase local participation, thus creating the conditions for more powers.

‘We need to accept a radically different networked economy’, he said.

New forms of local leadership

UK cities are signing up to the inclusive growth agenda and figuring out what it means for their places.

Josh Stott, head of policy and research at the Joseph Rowntree Foundation, said that cities can use inclusive growth as the organising principle of their local economy, the lens through which they devise new policy, reform the public sector and make decisions around local investments. They can start by:

1. Getting the metrics right: Measuring their economies beyond GDP and GVA
2. Improving political leadership: Finding new ways to join up local policies and organisations. E.g. By creating an inclusive growth cabinet portfolio position which is properly resourced and has power
3. Reviewing the local economic story: Moving away from the traditional focus on high growth and trickle-down and towards investment in core foundational sectors like care and hospitality. Driving local productivity and increased wages.

The JRF has developed an inclusive growth monitor and is working on a tool to appraise the costs of local investment decisions. It launched a new report this week featuring inclusive growth policies in ten cities across the world, and setting out ten principles of inclusive growth.

These principles include seeing economic growth not as an end in itself but as a means to achieve inclusion and shared prosperity, and seeing citizen engagement as a way to generate knowledge from the bottom up.

Can UK cities challenge the status quo?

There are dangers that inclusive growth could be used as a way to rebrand what is already happening in cities rather than helping them transform their places through the lens of inclusion. There are fears that the UK is still too centralised and too much driven by Treasury to forge their own economic paths.

Event participants shared some of the questions that emerged throughout the event on Twitter:

Lizzie Insall: If we need collective action for #inclusivegrowth, how are we going to unlock the human potential and individual agency to built it?

Anisa Haghdadi: #inclusivegrowth at the mo in the UK is an oxymoron. Western perspective is that for someone to grow, someone has to lose. Shift the lens.

Neil McInroy: If #inclusivegrowth is to tackle poverty it must change not acquiesce to the prevailing economic and social model.

As the event went on, more stories emerged of initiatives across the UK that are pushing forward a new local economics.

The push for a Living Wage in Glasgow. Preston Council’s work bringing together local anchor institutions. Shifts towards a more social economy in Manchester and elsewhere. Bradford Council using its procurement powers to create skills academies, apprenticeships and jobs.

As Josh Stott said: ‘Cities are where the opportunities for inclusive growth are greatest. They need to lead by example.’