Economic Growth & Poverty – LEPs take note!

There is no guarantee that economic growth will reduce poverty – that’s the conclusion of some excellent work by the Joseph Rowntree Foundation on cities, growth and poverty. I was so pleased to see this report published recently because it reflected the exact point I had been trying to make about the Strategic Economic Plan currently being developed by our Local Enterprise Partnership in the West of England.

My initial views on the West of England LEPs plan for economic growth are set out here in a comment piece for Bristol 24-7 and in an earlier blog here – they’re quite critical about the lack of any attention to inequality of opportunity and the lack of an overall inclusive vision for the city region. The main point being that the plan seeks to focus on GDP/GVA and jobs growth, through key sectors and key locations. None of which does anything directly to address the fact that key areas of the Bristol city region suffer from multiple deprivation and poverty. My contention here is that you can’t have  a plan for economic growth that ignores poverty, the plan needs to be based on that very issue and grow from there. Instead of which what we have is a plan that neatly seeks to sweep whole geographical areas and difficult issues under the carpet and pretend they don’t exist.

The answer of course according to the LEP is to create jobs and grow GDP because that solves all our problems and makes Bristol a more prosperous place. However, as the JRF report points out, productivity and output growth have little short term impact on poverty, and jobs growth will only have a positive impact on those in poverty if the sectors, type and location of jobs are targeted and focused in a way that makes them accessible to those that most need them. I see little evidence in the Strategic Economic Plan for the West of England that suggests this is either their focus or their intention.

To my knowledge, the same areas of Bristol have been in the bottom 10% of the most deprived wards in the country for some considerable time now, they include Ashley, Filwood, Hartcliffe, Lawrence Hill, Southmead and Whitchurch Park. These are all areas where we know there are problems, where unemployment is high, food and fuel poverty are real issues, educational attainment is low and there is a generally a more low skilled workforce. These are also areas that have been the focus of significant levels of regeneration funding and resource over many decades, but yet the problems persist despite these interventions, possibly because we can only ever touch the surface with short term funding or maybe because the interventions were the wrong interventions and not enough has been invested over a long enough period of time?

To my mind the Strategic Economic Plan currently being developed by the business led, unelected, unaccountable quango that is our Local Enterprise Partnership should be where these issues are addressed; where the focus of our attention is on jobs, skills, housing and infrastructure improvements to bring opportunities to the areas that really need them. The reality is that what we have in the West of England is a plan that will merely reinforce the status quo. It will provide jobs in sectors and locations less accessible to those that really need them and will invest funding and opportunities in areas where development is already happening. Why do we need to support and invest more resource in the Science Park, Avonmouth/Severnside, Bath Riverside when these areas are already being developed? Why are they more worthy of infrastructure, funding and support than South Bristol? One has to seriously question the logic that says we will support what is already happening rather than use new resource to make real change where it is most needed. Add to that the fact that the plan is somewhat reluctant to talk about housing which is surely a major cost of living issue for many. Some serious work is needed in this plan to address issues of housing supply and affordability, but once again the plan is found lacking in this respect – perhaps another issue that is just too difficult to deal with?

The danger of the LEPs current approach is we fall into the trap of tackling growth separately to poverty, rather than using growth as an opportunity to address issues of poverty. By doing this we miss the opportunity to really make a difference and we also miss the opportunity to get the most out of growth and realise the true potential of the Bristol city region. With a focus on poverty reduction the economic plan could boost economic growth, productivity, income and spending power as well as reduce the welfare burden. By not addressing poverty we reinforce existing divides and consign whole areas of our city to ongoing poverty and all because we don’t have the vision or ambition to really do something about it.

So what can we change and what needs to happen? It is probably too late to really influence the LEP plan, because let’s face it, they don’t really want to know and will maintain their inherent bias and focus on extracting money from government, to the government’s agenda rather than a local agenda based on need. The answer – an alternative plan? or a groundswell of activity to boost jobs and growth where it is needed? Or just maybe, enough of a challenge to our politicians to make them listen, to be brave enough not to just go along with the LEP and its plan, to change it? One can live in hope!

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11 thoughts on “Economic Growth & Poverty – LEPs take note!

  1. Excellent article that hits the nail on the head. If the poorest are better off, we are all better off. That’s not an economic fact, just a common sense fact!

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  2. Thanks Tessa. This a hugely important discussion, with wide applicability (I speak from South Africa), and we urgently need a different way of looking at the economy and poverty.

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  3. The LEPs need to provide away of articulating both the GDP/GVA growth dimension and ensure that the poorest groups are helped. The ‘trickle down’ seems to be weak ~ if you don’t focus on it how can you expect it to improve.

    The Cabinet Office – Standards Hub have published a Challenge: Open Strategising to achieve benefits http://standards.data.gov.uk/challenge/open-strategising-achieve-benefits. These OpenStrategies (NZ) principles are summed up by Phil Driver, the founder, when he states that ‘anyone can design a complicated strategy system but a good designer will develop a simple one’. The resulting OpenStrategies’ system is compellingly simple yet powerful, even for very complex, large scale strategies. Crucially, OpenStrategies doesn’t just underpin the design of strategies – it also guides their validation and implementation.

    The OpenStrategies approach can be explored in the book Validating Strategies, published by Gower http://www.gowerpublishing.com/isbn/9781472427816.

    PRUB it or BURP it! OpenStrategies gives you a validated strategy with a rationale AND an Action Plan.

    I hope this catches your interest – just PRUB it!

    Ian

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    • thanks Ian, very helpful. I’ll take a look. The more we can encourage LEPs to focus on poverty and growth together the better, so any information to back that up helps.

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  4. Economies are stimulated if the lowest paid have more disposable income.

    That doesn’t mean more salary per se. It means more money left after essentials like housing, heating and lighting, clothes and food, transport to and from work have been accounted for.

    The UK economy won’t recover because it can’t escape from the rentier economy. Each time people earn a bit more, landlords put up rents, so all that happens is that they get richer and everyone else stays flat. There isn’t a free market in property because for that to occur, you need a significant over-supply of property and that’s unlikely as unit costs are too great to justify it. So landlords can charge ‘uneconomic’ rents because they can get away with it. That’s why rent controls are an essential part of a proper economic recovery. Same with selling houses to foreigners. That benefits estate agents, property developers and those who couldn’t care. All that does is push prices up to global wealth levels, not local salary levels. It’s unethical, immoral and wrong. Don’t expect it to change soon….

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    • thanks for your comments Rhys, I agree with your points about housing and the economy and why it probably won’t change quickly! There seems to be quite a bit of debate about the housing crisis at the moment which may at least spark some change, but the real change that is needed will probably be unpalatable politically.

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