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Listening to local leaders in Sheffield on Wednesday at the Inclusive Growth Commission’s first evidence hearing it seems that the referendum result wasn’t a surprise for many.

We could’ve told you our communities would’ve voted leave before Christmas,"  said one Councillor, who had heard on the doorsteps of his ward that Vote Leave and its invitation to take back control struck a heavy chord with people who, over the last three decades, have felt disempowered, disenfranchised and disconnected. This time, instead of rioting in the streets, we saw rioting at the ballot box.

The statement of intent from 52% of the British population has rocked the UK’s economic, political and constitutional footing, sending a warning signal across the world. The lesson that UK and international policy makers must draw is that we can no longer afford for inclusive growth to be an aspiration. Inclusive growth will be the only way to heal divides that undermine economic prosperity and social sustainability. If we don’t create the conditions for inclusive local economies we risk our social cohesion and continue to erode the identity, self-belief and agency of communities.  

To do this we need to put place back into place-based policy, capitalising on the distinctive assets of a locality and its role within its functional economic area and beyond. We need to move beyond HM Treasury’s cookie cutter approach to making deals, in which Whitehall effectively starts with what works for Greater Manchester and works backwards - what might be called the ‘Manchester Minus Model’. We need to go beyond the economic narrative, which has been a necessary step in getting thus far, and integrate investment in public services so that – as John Mothersole, Chief Executive of Sheffield City Council said, we “see economic and social policy as indivisible”.

Devolution deals have created the platform for enhancing local economic growth, but attempts to combine the social dimensions of economic development – including health and wellbeing, quality housing, skills and education – are either few in number (e.g. Greater Manchester’s devolved NHS spending) or relatively small in scale (e.g. adult skills budgets). Even then it is not clear how these examples will unlock the range and complexity of social challenges in their respective city-regions; “Project Fear over the economy crashing if we voted to leave fell empty on the ears of many people for who the economy crashed ten years ago,” one councillor said.

As many people have argued over the course of this week, failure to adapt within our post-industrial economy has left a deep scar on generations since the 1980s and 1990s. What’s most worrying for policy makers is that, even during the years of plenty, many of the same families have continued to experience the same entrenched levels of poverty. The “confetti of initiatives” has failed. A new model is needed.

If government were serious about inclusive growth it would invest (rather than simply accrue cost) in social infrastructure in the same way it currently does in physical infrastructure, assuming the same long term multiplier effects on the nature and size of economic growth.  Devolution deals based on this approach, tailored to the needs and assets of their place, designed with communities and backed by a mutually reinforcing central governance and accountability structures, would have the potential to create transformational change.

In the wake of Brexit some people have questioned whether the process of devolution will have to be sidelined or slowed. Will the Northern Powerhouse survive the Conservative Party leadership change and Cabinet reshuffle? Will this matter, with cities in the north collaborating formally and informally already? What of other places beyond the major metros? 

Questions such as these and many more will continue to play out over the coming months and years as the UK finds its footing again as a nation – federated or otherwise. The Inclusive Growth Commission has started the process of listening and learning from local authorities, business, think tanks, academics and civil society organisations, across the UK and internationally.  From this we won’t claim to find the answer. Instead we will strive to identify a number of ways places might rebuild their own foundations for prosperity from the ground up, reconnecting our politics and renewing communities’ sense of value, identity, purpose and belonging.  The temptation to fall back into old habits, to steal growth – any growth – will loom large, particularly as the next belt buckle of austerity tightens again post Brexit. But only by creating the conditions for inclusive growth might we begin to heal the rifts within and between our towns, cities and nations of the UK.

Charlotte Alldritt is RSA Director of Public Services and Communities and Director of the RSA Inclusive Growth Commission. You can find her on Twitter @calldritt.


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