There is virtually no local economic data available in the UK – nothing that might be useful for the next Joseph Chamberlain. We need a new narrative for local economics, one that might be embraced by national politicians and maybe even the Treasury.
Back in 1989, I found myself putting a television programme together with the help of Roger Daltrey of all people, attempting to calculate the ‘dirtiest city in Britain’.
It causes such a fuss that I don’t dare name the guilty place again, but the main reason I remember it was how difficult it was to find any data at all.
Every other city in Europe had data on air and water quality, litter and so on. In the UK, there was air quality data under the smoke control legislation, and there was quite a lot of information about London. But almost nothing about the great provincial cities.
Perhaps 1989 marked the height of the great metropolitan snobbery which had rendered Manchester, Birmingham and Leeds despised outposts reduced to the role of putting detailed instructions from Whitehall into effect, forbidden to use their imagination – and certainly not to aspire to take any kind of control of their economic destinies.
What remains of this attitude, even after the devolution of £6bn of NHS spending to Manchester, is the economic element.
Almost no economic data is available at local level (though the banks are reluctantly now providing lending data down to postal district level) – not even, in this case, about London. Nothing that might be useful for the next Joseph Chamberlain to use.
Nothing that could inform an ambitious and imaginative mayor who wants to use the resources he already has, rather than waiting hopelessly and passively for the external investment or the external grants that so rarely arrive.
Not only is there no local economic data to speak of – nothing about the money flowing around local economies – but mainstream economics has the same attitude to local economies as the government did to pollution data back in 1989. They don’t believe it is meaningful.
Because of the way these things are measured – as Gross Value Added – the Treasury tends to believe – at least without remonstration – that efforts to revitalise a local economy just moves the activity from one area to the next. Only the national economy counts and the keys to that ignition are well guarded in the Treasury.
Why? I have just finished a project for the Friends Provident Foundation to find out, and to identify the intellectual barriers to asking this crucial question: what does my city or neighbourhood or district need to do to build a more resilient, and a more energetic economy?
There needs to be a new narrative for very local economics, based on local financial and enterprise institutions, which might be embraced by national politicians – and even by the Treasury. It is a potentially important intervention to kickstart a vital debate – why mainstream policymakers are so suspicious of revitalising local economies, the only basis for the real devolution of power.
I am proposing two reforms:
- The Treasury must develop a body of practical knowledge about ultra-local economic solutions and local economic resilience. It must set up an ultra-local policy and delivery unit, learning the lessons from the experience of those local authorities in urban and rural areas which are succeeding in developing working solutions to their economic difficulties.
- Small business now earns 51% of value added in the UK economy. In theory, they should therefore be getting a similar proportion of the business investment available in the UK. If they are not doing so, then it is a sign of serious market failure and we need to provide the intermediaries and institutions which could make this possible.
I have come to the conclusion that the reason the term ‘local economics’ is confusing is that it suggests protection and borders. If we talk instead about the kind of local institutions we need to nurture ‘small’ business – to increase competition, not curtail it – we might get more meeting of minds between centre and regions.
The solution to an unbalanced economy, and serious market failure in regional cities, is only local in the sense that local is where the levers are to encourage ‘small’.
But we are an intensely practical nation. If we develop small economic institutions and techniques that work, the mainstream will embrace them. All we have to do is try.
David Boyle is co-director of the New Weather Institute. His and Tony Greenham’s book People Powered Prosperity is available from today and can be downloaded for free at http://www.newweather.org/projects/towards-a-people-powered-prosperity/
