The Disraeli Room

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Building Community and Opportunity: A new approach to local growth

5th March 2013

Recovery must begin with a stronger economic localism, argues Julian Dobson, author of ResPublica's new report

Politicians of all shades should be pleased that the latest report from the think tank ResPublica is about Britain’s strivers. While researching it I was struck by the amount of striving that goes on, often in unexpected places.

In half-abandoned streets in west Hull, for instance, families are striving to make ends meet and bring up their children. In Rochdale’s social housing estates volunteers are striving to support their local communities in the face of the loss of local services and personal benefit entitlements. In Lostock in southwest Manchester residents are striving to support their neighbours, sharing skills and talents.

Look behind the stereotypes of poverty and depression and you’ll find plenty of striving. Often, in the face of rising costs of living, lower incomes from work, real-terms cuts in benefits and a job market so desperate that 1,700 people recently applied for just eight jobs at a Costa coffee shop, getting from one end of the week to the other takes all the striving a man or woman can muster.

Incomes and standards of living have not recovered as they did after previous recessions. The Office for National Statistics recently found that net national income – the total income available to citizens – had fallen by 13.2 per cent four years after the onset of the 2008 recession, whereas in the early 1980s and 1990s it had returned to pre-recession levels at a similar stage.

More than one fifth of British workers are low-paid and the proportion is higher than in comparable economies. Nearly 10,000 more working families every month require housing benefit to help pay their rent. The Trussell Trust, which provides food banks helping people in crisis, fed twice the number of people in 2011/12 as it did the previous year.

In these circumstances, bullish talk of economic growth and investing in infrastructure is not enough: the benefits will take too long to reach those living in and on the edge of poverty. Neither is it enough to expect the policies of localism alone, which seek to devolve powers to local communities, to make a difference in our most deprived neighbourhoods. We need localism that creates work and opportunity, rooting recovery in the communities that are most crying out for it.

The route to a more productive, dynamic and sustainable economy in the UK begins when people can live lives that fulfil their potential and sustain their wellbeing. That will not happen when many are unable to contribute fully to the public good.

ResPublica’s report is called Responsible recovery: A social contract for local growth. The title takes the current political debates about fairness and places them in the context of real people’s lives, arguing that reciprocity and contribution are at the heart of any sustainable recovery, and that government policy needs to be geared to enabling all to contribute to the best of their resources and abilities.

For that to happen, policies need to be people-centred, locally accountable and locally responsive. The report takes the ‘sustainable livelihoods’ model that has been tried and tested in the context of international development, and picks up on work by Oxfam and Church Action on Poverty to apply it in the UK. It views the journey out of poverty as a shift from surviving to coping, from coping to adapting to change, and from adapting to accumulating.

The assets people need to accumulate to escape poverty are not just material. They include social assets such as family, friends and neighbours; human assets such as practical skills; and public assets such as local services, infrastructure and community organisations.

Undermine one set of assets through policies such as the ‘bedroom tax’, which forces individuals with ‘spare’ bedrooms to move or lose benefit entitlement, or through funding cuts to local voluntary organisations, and it becomes harder to build the others. The loss of affordable childcare, for example, can make all the difference between a job being worthwhile and becoming a poverty trap.

The report proposes three interrelated approaches designed to build and sustain individual and community assets in order to enable people to contribute fully to society.

Secure and affordable housing is the first building block. By developing intelligently, with a view to long-term community sustainability rather than short-term completion targets, housing providers can lay the foundations for well-functioning communities.

Second, the public services that support poorer communities need to be opened up to them, providing job and training opportunities for those who are on the edges of the labour market. The Fresh Horizons social enterprise in Huddersfield shows how local people with limited experience and qualifications can provide locally sensitive and accountable services such as home repairs, childcare and youth work, and managing community facilities. In doing so they bring income into the community and provide positive role models for friends and neighbours.

Third, government needs to localise employment support and the Work Programme so that it is sensitive to local labour market conditions and trusted by local people. Current policies make little distinction between looking for a job in Surrey and trying to find work in Sunderland. Local accountability and conditionality must be coupled with an approach that encourages all to contribute to their communities, valuing the time spent volunteering, not just the time spent filling out job application forms.

The paper puts forward a raft of recommendations to help put these approaches into practice. These include extending participatory budgeting schemes; ‘community deals’ devolving services to locally accountable organisations; selecting housing providers on the basis of their long term investment in communities; and using procurement and contracting to create local social and economic value.

None of these proposals are magic bullets. But all involve a shift of mindset that values and supports people living in our poorest communities and views them as equals. That’s why we call it a social contract for local growth.

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