Wednesday 2 July 2014

The next kind of localism will be economic

Should we be suspicious that Osborne and Adonis seem to be of one mind when it comes to devolving economic power to the cities?

There is a faint worry in the back of my mind that, when things are bad enough for both the two biggest parties to agree, then probably the world has moved on and it is too late.  That certainly seems to be Simon Jenkins' view this morning.

But don’t let’s be too hasty. There is no doubt that there is a head of steam behind the basic idea that cities should be encouraged to be creative, responsible custodians of their own economies.

This despite the fact that the mere whiff of the idea is anathema in some corners of the Treasury, where the idea of The-Bank-of-Our-Friends-in-the-North keeps them up at night. Despite the fact also that local government recruitment for a generation has tried to weed out entrepreneurial innovators (they didn’t always succeed).

Both the main engines of devolution under the coalition, the Localism Act and City Deals, have shared the same weakness – they are too often stymied in practice by Whitehall. In the same way, the Treasury stymied an ambitious plan for tax increment financing (letting cities pay for projects by keeping the tax revenues that result).

When I worked in television in the late 1980s, I tried to construct an environmental index for all the biggest UK cities. I found that the data was available for every big city in Europe except in the UK, where it was only available for London.

In other words, to take these ambitions seriously – and tackle this ingrained metropolitan snobbery – politicians need to go further than setting out their ambitions. They need to say how they will break through the restrictions of Whitehall.

They also need to say, not how this will work in Manchester or Bristol – that much is obvious – but how their plans will transform the economies of Bradford, or anywhere else where the economy appears to be passing by on the other side.

There is no point in the plans of Osborne, Heseltine and Adonis if all they do is help along the cities that can already look after themselves, and simply tie the less successful ones ever closer to the Whitehall embrace.

I’ve argued before that there is an ultra-micro economics sector emerging – new local banks, new local energy installations, new local enterprise institutions, new ways of procurement, and maybe even new kinds of money.

It is in the earliest stages, and designed to look afresh and what assets any neighbourhood has – wasted land, wasted people, wasted resources – and turning that into a sustainable economy that can provide some measure of economic independence.

Those are questions rather than solutions, though some solutions are beginning to emerge. This very local economics is potentially a basis for greater self-determination, and it needs to be at the heart of policy.

But what should political parties put in manifestos about it? The New Weather Institute has published a new report with some proposals, based on work funded by the Joseph Rowntree Reform Trust Ltd. It is called The Next Devolution and it was published yesterday.

See what you think.

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