The trouble with economic recovery is that someone else always has to do it – the bankers, investors, industrialists or mandarins. What about the rest of us – and what about the places we live? Are there no economic levers they can pull to improve their lives?
Manchester is to get new powers, and the same powers have now been agreed for Sheffield – but what will the cities do with these powers when it comes to economic revival? Or will they just let the Treasury decide economic policy on their behalf?
The trouble is that there is no communication, and little understanding, between the economic localisers and the mainstream national policy-makers, who are very sceptical about local economics – at least more local than LEPs.
People Powered Prosperity is the result of a project (thanks to the Friends Provident Foundation) to translate between the two worlds, interviewing a range of leading economists, including the Treasury, to see what was causing the logjam between central economic policy-makers and the energy of local economic activists. The book is the result.
It sets out a new narrative for very local economics, based on local financial and enterprise institutions, which might be embraced by national politicians – and by the Treasury. It is a potentially important intervention to kickstart a vital debate – about why mainstream policy-makers are so suspicious of revitalising local economies, the only basis for the real devolution of power.
The book also proposes two reforms:
- Small business now earns 51 per cent of value added in the UK economy. 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. In the interim, the Government needs to track these numbers regularly – comparing profitability and investment by size of business – and to report on them.
- The Treasury needs to develop a body of practical knowledge about ultra-local economic solutions and local economic resilience. They need to set up an ultra-local policy and delivery unit, learning the lessons from the experience of local authorities in urban and rural areas which are succeeding in developing working solutions to their economic difficulties.
You can download the book here: People Powered Prosperity (WEB).