Reversing the economic apocalypse (in every postcode)

Photo by Ivana Cajina on Unsplash

By Tim Thorlby

5 min read

When Prime Minister Burnham addressed the Labour Party Conference, he promised to turn the page on forty years of neoliberalism.

He signalled a clear intent to move the boundary between the State and the Market, giving the state greater control.

If it happens, this will be an historic shift of approach. What could it mean in practice for public-private partnership? And in particular, what might it mean for achieving ‘growth in every postcode’?

1 | A change of era?

I’ve been working in public policy and urban renewal since the 1990s. Over the last thirty years, I have lost count of the number of government reorganisations, initiatives and policy shifts I have seen. Nothing stays the same.

But as Pope Francis once discerned, we may not just be living through an ‘era of change’ but perhaps something more fundamental - a ‘change of era’.

He may have been right.

I recently listened to Andy Burnham’s first Labour Party Conference speech as Prime Minister. It was a decent speech, with some substance. What was particularly striking for me is that his analysis of what needs to change in the UK is really quite fundamental. He wasn’t just touting new policies, he was saying he wants to rip up the rulebook and play a different game. In particular, he wants to turn the page on “forty years of neoliberalism”. He has memorably summarised neoliberalism as:

“the four horsemen of Britain’s economic decline and political crisis - deindustrialisation, privatisation, deregulation and Brexit.”

In his analysis, Mrs Thatcher’s push for privatisation and deregulation in the 1980s created an economic and policy framework that we still live within, despite the many changes since. His pledge as Prime Minister is to overturn this framework and (in his words) bring back “stronger public control”.

He cites the privatised water industry as the bete noire of the neoliberal approach –

“where shareholders never lose and customers never win”.

So, are we entering a new era? Time will tell. But it made me wonder what shifting the boundaries between public and private might mean for our economy and our attempts to promote economic growth – ‘growth in every postcode’. In particular, what are the implications for the Councils and the Mayors charged with growing their economies?

To answer this question, we need to rewind the clock 30 years and blow some dust off a few old reports.

2 | Readers, I had some post

I recently caught up with a retired pal of mine who I used to work with in the days of New Labour and ‘neighbourhood renewal’, when Tony Blair was still PM and Andy Burnham was an unknown MP.

Rachael, and her hubby, the late great Geoff Fordham, worked on many urban regeneration projects from the 1980s onwards and as we chatted, it occurred to me that it might be interesting to look at some of those early reports to see what’s changed.

Such reports can be hard to find as they are pre-digital and mostly now in government archives or cardboard boxes in people’s garages. Fortunately, Rachael has a garage.

After our catch-up, Rachael kindly posted me a handful of government research reports which they had worked on in the late 1990s and had kept.

Firstly, I love getting post.

Secondly, the reports were reviews and evaluations of some of the UK’s earliest attempts at urban regeneration in the 1990s, over 30 years ago. I blew the dust off reports about ‘City Challenge’, a pioneering area-based regeneration programme which John Major launched. I marvelled at reports of the UK’s earliest attempt to build cross-sectoral regional and sub-regional economic partnerships.

I realise you may not have quite the same fascination for old government reports from the 1990s as I do, but here’s the point.

In the 1990s, the UK was still at an early stage in its ‘neo-liberal’ journey and the mindset was for the public sector to engage the private sector in ‘partnerships’. Every initiative had a partnership with businesses represented. It was all the rage. As the State retreated and the Market’s boundaries grew, this kind of voluntary engagement was the rational response – the best way to try to work together.

And we are still doing it today. Partnership working between sectors has become embedded in how every public sector institution operates.

Partnership working, on the whole, is of course a good thing.

But I noticed something else in these reports from the early years of the UK’s neoliberal experiment. Their summary of the pressing issues facing deprived areas and their account of what is ‘not working well’ appears to have hardly changed. You could change the date on some of these reports to ‘2026’ and they would still ring true.

One report notes how the partnership hasn’t been able to make much progress in linking economic growth to areas of need or ensuring that local communities benefit from new investments.

Well, thirty years later, their successor partnerships still haven’t made much progress on this either.

As I have written (regularly) in earlier blogs, we can see how the economic experiment of the last forty years, where we leave so much to the market, has largely failed. It has not given us a dynamic economy, north and south are further apart than ever and the economic distance between our communities is so toxic it has bred a whole new and divisive kind of politics.

Expecting the market to step in and fix social issues is naïve. It’s not what markets do. I have run businesses and they can be great, but they cannot do it all. Expecting voluntary partnerships to shoulder such responsibilities is also overly optimistic, despite the great efforts of a few. Such a laissez faire approach doesn’t work.  

It is time to turn the page.

I will put the reports down.

What might shifting the public-private sector boundaries mean? How are we to reverse Andy Burnham’s economic ‘apocalypse’ and do it in every postcode?

3 | Making and rewiring our cities

As devolution gathers pace, I think Councils and Mayors will not just need to get to grips with new funding and new responsibilities, but also a new mindset of how they work with the market.

Voluntary partnerships, laissez faire approaches and old-style inward investment is no longer enough. Hoping that investors and businesses will rock up and fill the gaps hasn’t really worked well for most. If the boundaries are shifting, the public sector needs to see itself differently, in two respects.

We are City Makers

Firstly, local and regional government need to see themselves as ‘city makers’ – purposefully designing and building economies for real places, not just attracting footloose investment for speculative projects wherever the market chooses. This is a more directive approach. This is less about ‘seeing who turns up’ and more about intentionally designing places that are ready for investment of a particular kind, with the public sector taking a more hands on approach to shape what it wants to see.

In practice, this means integrating planning, economic development, inward investment and fiscal incentives to regenerate specific places – with well-designed frameworks for particular places and a coherent approach where private investment is being offered well designed opportunities, rather than blank canvases and speculative ‘zones’.

This means that local government needs to build multi-disciplinary teams that bring together people skilled in planning, economics, investment and skills/training to ‘make projects’ for investors and businesses to plug into. Of course the private sector need to be involved in helping to shape these, but they need to be led by democratically accountable bodies.

This is shaping investment for ‘somewhere’ rather than ‘anywhere’.

We are City Re-wirers

Secondly, local and regional government need to do what the market has never been able to do, and that is to connect the economic opportunities of a city with the communities and people in need. Wealth never trickles down. We have to design and build pathways to ensure that the benefits of economic growth are shared across our communities. We need to re-wire our cities.

This has never really been done in a convincing way in my lifetime I don’t think.

When I look at the communities in my city, what do they need to be properly connected into the city’s opportunities? They need investment in their secondary schools. They need decent bus services so that they can actually get around the city, affordably. They need properly funded colleges and apprenticeships. They need a much better choice of housing. They need faster access to their GP. Some may also need specialist support to help them get back into work after time out of the jobs market.

This is a kind of ‘city making’ too but it is more about ‘re-wiring’ the city to make it work for everyone. This also needs a multi-disciplinary team which can address housing, skills, employment, health, schools and transport – a coherent approach to connecting real people in real places with real opportunities.  There are plenty of helpful projects out there, but we now need to bring them together and work at scale and do it neighbourhood by neighbourhood.

4 | State designed, market enabled

Adjusting the boundaries of State and Market offers us new opportunities. It presents government with a new role – to lead and design opportunities for the market to work within.

The best regulated markets have always worked like this, so this is not a new phenomenon, but it’s a long time since we have applied it to our town and cities.

This is not about going back to the 1970s where the State did everything and produced everything; there is still a large and productive role for the market, but serving social purposes, not just the profit margin. The State leads and designs opportunities and the Market works within it.

I think this opportunity presents serious challenges for local government and Mayors. It really is a very different way of thinking about the economy and about how we do government. It requires lots of new skills and ways of working.

Councils and Mayors must do more than just expand, they must evolve quite significantly too. We have never been here before.

Can we reverse Andy Burnham’s ‘apocalypse’ in every postcode?

Surely it’s worth a try.

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