September 15th 2011
The crisis in local economic development
Sometimes a collection of conversations and snippets of policy shifts add up to create a mood. I am worried! Progressive local economic development in England is in retreat.
I wrote three months ago that there is a prevailing ‘voodoo’ element to economic development policy in England. A sorcery is stalking England, hindering economic localism, by focusing singularly on economic growth for England plc (and to date failing!), and a belief that the elixir for economic revival is getting the public sector and planning bureaucracies out of the way and tax breaks.
I’ve been banging on about this for far too long, but local economic development must have an eye on growth, but should not be synonymous with it. Trickle down is far from a torrent. Growth should never be seen as an end in itself. What’s the point of that? Growth must be used for social purposes, or where growth is not achievable or not happening, we must develop the local economy in different ways for social benefit.
All of us interested in creating great places must gaze beyond the present and look at the possible progressive future. We must look beyond crude capitalism, materialism, and an overreliance on public spending and seek local economic alternatives. This is a future where local economies contribute to making people happier and less likely to get ill. It’s about nurturing and protecting the environment, supporting artistic and cultural richness, creating a good or big society and above all making places resilient to change.
This is a progressive interpretation of local economic development and one I admit has never been mainstream to all working in the field. Progressive principles of economic development were growing but were often marginal within the now abolished regional development agencies. Also, lots of the progressive learning, evidence and knowledge developed by the RDAs is being lost or rejected. Furthermore, there are just less people working in the field.
It’s probably a good thing that the institutional architecture and ‘bloated industry’ has now been removed, but it’s a crying shame that there now seems scant possibility of true economic localism or a progressive approach. Whitehall and the Treasury continue to dominate economic thinking, with local economies reduced to merely serving the god of national economic growth.
Furthermore, through financial pressures and policy mood, institutions such as the business led local enterprise partnerships (LEPs), are often narrowing economic development practice onto business growth. Consequently, progressive local economic development thinking is being squeezed.
I’m worried, but I work in hope, buoyed by practitioners and communities who despite the national policy context, know the difference between economic growth and great places and society. They are busy and active. From this great things can happen.
Many areas remain distant from economic growth and the hope of trickle down. High levels of deprivation, growing unemployment are a real worry. But many communities, voluntary and community sector organisations, business and economic development practitioners in these places know the limits to economic trickle down and have seen and have fretted about the patchiness of growth even in the good times.
During a recent visit to Northumberland County Council, I was impressed by their deep appreciation that the towns within the county must all have bespoke local responses building unique economic destinies. And that this cannot be done through policies which advance economic growth alone.
Even in those more affluent areas, where growth is easy, there are some who continue to question the drive, type and speed of local economic growth, as they see great places, with unique identities, become swamped by inappropriate investment and development.
Perhaps LEPs – as the chief executive of Voluntary Sector North West – Richard Caulfield states – are ‘doomed to success’. Government, driven by their avowed localism, cannot afford LEPs to fail and will accelerate decentralisation from Whitehall to LEPs, broadening their scope.
LEPs themselves may well become key local connectors, linking up with the health agenda via health and wellbeing boards, local strategic partnerships and public service boards, arts organisations, voluntary and community sector infrastructure bodies, and environmental organisations, and in so doing forge a whole new set of plural local economic destinies for England.
I’m still worried though!
Lots of stuff happening in Leeds that should encourage you Neil. The Leeds Community Accelerator (Elsie) has so far trained up almost 60 people who come together once a month to support local people and projects with advice, guidance and support.
Culture Vultures and others have built vibrant networks of artists and artisans in the city that is starting to yield really interesting collaborations and projects.
New spaces are being created for enterprise and endeavour such as the exciting Munro House and Test Space Leeds amongst others.
While the LEP bangs on about old school ideas of high growth, job creation and employability, you let me take you by the hand and lead you through the streets of Leeds and I will show you somethings to make you change your mind.
It may be tough times for us professionals in the regeneration industry – but others are stepping up and putting us to shame.
Regeneration in my patch overlaps heavily with community development and economic development and planning to create a heady mix of action. In one case the local heritage of Bruton has created a good image which has attracted a colony of writers and artists. A specialist consultant in restaurants saw the potential and has created an exciting place for eating, meeting and events (At the Chapel) and additional retail shops have opened with unique character despite the downturn. We have used press specialists and web developments to promote the area and have been working to develop more employment sites to reap the benefits of five local highly successful schools.
All set in marvellous countryside an hour from the sea. Why should anyone want to live anywhere else? We also have a thriving small business but high technology industrial base which has attracted more companies to locate in a growing cluster across Southwest Somerset, with major companies such as Westland and Hewlett Packard in Yeovil as economic role-models. All in all a thriving and well-hidden exception to the rule that money is what you need – we never found we were deprived enough to get any!!
Mike
Points well made by Neil. The adaptive nature of growth policy is a must for localism and economic renewal debates over the next 10 years and policy tension hamperes a sensible discussion on this. I have blogged on similar lines for the upcoming Solace summit thread on this – see more/get involved via http://solacesummit.wordpress.com/category/proposition-5-local-government-can-drive-economic-growth/
I’m worried! But comments like these serve to assuage it a bit.
The two Mike’s. There are great places and local innovative active which keeps progressive economic development alive, in mnay places. And more please!, But its also about scaling them up and have policy which nurtures and creates the conditions for acceleration.
Tom: its heartening that at certain moments many people are thinking the same. So your fine article assuaged some worry! We do need a paradigm to how we think about growth, with an honest reflection of how some places wont have it. Its madness to continue on as if they will. Advance of localism and bespoke adaptive local economic strategies are key. Economci development orthodoxy is nowhere on this.
My impression is that large part of the enthusiasm for and dynamism behind the idea of social enterprise stems from a disquiet with the slow pace and convoluted approach to making a difference on the ground adopted by governments and their agencies. The recent case study research we’ve undertaken regarding the role of social enterprises in public service delivery suggests that they offer a route to lever in not only funding from sources other than government funds (that are subject to fairly narrow objectives), but also create an opportunity for many more people to have a real stake in developing an understanding of what their needs are and how they can best be met. By definition this implies a highly localised approach.
This is something which is beginning to be recognised by public service commissioners (even though the tension with a belief in economies of scale from rationalisation hasn’t gone away), but does not feed through to economic development at all yet. As a result, just as it has not been possible to reconcile the tension between people’s desire to transition to more sustainable lives and the unquestioned belief in economic growth as the be all and end all, social enterprises are struggling to overcome deeply embedded concepts of what ‘doing business’ is all about.
As you suggest, it seems to me that the only solution will be to instill all businesses with much more of a social enterprise ethos that commits them to engaging with and looking after the communities where they work. A tall order, no doubt, but the only way forward.
As I’ve always had an unfashionably holistic view of the factors influencing local economic development I would welcome the idea of LEPs becoming “key local connectors”. However, whether they would be in any position to truly influence a joined up approach to local economic and socio-economic issues is another matter.
Here’s to hope triumphing over expectation.
Some interesting thoughts particularly; “Whitehall and the Treasury continue to dominate economic thinking, with local economies reduced to merely serving the god of national economic growth.”
But is it not more a case of serving the god that is the multi national corporate business interests, and removing any obstacles that stand in their way. And if that results in a negative impact on communities so be it, it’s a price worth paying?