The need for local economic activism
Neil McInroy- LGC, 1st June 2009
Recently the Department for Business Enterprise and Regulatory Reform (BERR) published a report entitled New Industry: New Jobs part of the wider Budget 2009 documentation.
This and speeches by the Secretary of State, Lord Mandelson, reflect a desire for a new wave of ‘industrial activism.’ I believe this call for activism needs to be matched by a new local economic activism.
I have been struck over the last few weeks about how the problems our local economies face, mirror those of the recession of the 80’s.
Then, there were three great issues in the British economy.
Firstly – sectoral. Then it was deindustrialisation, now it is the collapse of the financial services and investment markets.
Secondly – spatial. Then it was our major cities, now it is the polarisation and the dual economies within our cities and beyond.
Thirdly -social. Then it was the labour markets, unemployment via deindustrialisation.
Now it is still labour markets, unemployment and worklessness and the need for new skills.
Furthermore, flicking through some old economic strategies and publications in our CLES library, there was also a strong recognition that economic problems related to social unrest, lack of cohesion and the rise of extremists. Therefore it was recognised that economic development was also about creating good, neighbourly and cohesive places.
In the 80’s, there was a spirit of progressive change. Progressive and far sighted local authorities such as Manchester, Birmingham, Sheffield, and the GLC, saw economic development as core business and a progressive and creative force. They knew that times were changing, that the market had its faults and they needed to act for the benefit of their communities.
The long heritage of local government and economic development, stretching back to the 60’s, has been about intervening in the economy, not standing back and letting the winds of change blow us away.
We must rekindle this approach and act to ensure that an economy grows and grows sustainably in the right places for the right people. It is about spatial and social fairness within environmental limits.
From the local government activism of the 80’s came some great strategy and policy and it created a culture of proactivity which allowed municipalities to take advantage of the global economic buoyancy in the late 80’s, forging the socially and environmentally imperfect but nevertheless significant physical urban renaissance.
Economic development was never easy, but in the booming 15 years up to the present recession, economic development has been for some areas a walk in the park compared to the steeplechase now required.
What is the future? We are going back to active strategy and we do have the new economic assessment duty and an appreciation of the role that local authorities can play.
We also have the new statutory city regions and perhaps some fiscal decentralisation from the centre and the regions to the local. Economic development cannot be just some nerdy policy and peripheral activity.
It is already happening, but we need to do more so it becomes core corporate activity and local government finds new ways of working and doing.
Recently the impressive Manchester Independent Economic Review (MIER) published a series of documents detailing the state of the Greater Manchester economy with some broad principles as regards the direction for the city regions economy.
In this the stand out document Sustainable Communities, details the sectoral, social and spatial disparities and polarisation within the city region. This stands as a state of play which strategy, policy and a new wave of local government economic activism must now work to address.
For inspiration, we now need to dust down those old strategies. The projects and interventions will be different but the ‘can do’ and economic development culture and creativity should be rekindled.
I know that the oppressive centralism and the risk aversion and target driven mentality has squeezed out creativity and progressive policy to some extent. However a new wave of local economic activism must be found.
It will be found in local government, but it also needs the involvement of communities and residents.
In this we need to ground economics and economic activity in the nature of local places and engage local people in shaping local economic futures.
Local politics and local government is a force of good and we need to get back to being local economic activists. The fizz has now gone out of the global economy and the investment market. The present set of economic and social issues mean local government must provide the new fizz.
Our places, communities and residents demand it.
Available on the LGC website- click here.
