“Sustained growth is a MacGuffin”: Why councils must find other ways to prosper

This article first appeared in the LGC briefing.

Alongside the drive for growth, tapping into the wealth of insight, energy and tangible assets in communities will help us solve our most formidable challenges, writes Adam Lent.

Thriller writers call it a ‘MacGuffin’: something all the main characters in a movie desperately want to get their hands on. Think the Ark of the Covenant in Raiders of the Lost Ark or the mysterious briefcase in Pulp Fiction. Now Westminster has its very own MacGuffin: sustained economic growth. It has become the answer to everything that everyone claims they can secure. Jeremy Hunt is slashing taxes to deliver it and Keir Starmer went so far this week as to declare his “obsession” with it.

The hard truth is that sustained growth is rarely in the gift of governments.

Like the best MacGuffins, growth offers so much – rising living standards, more funding for public services, technological advances. But what makes thrillers thrilling is the fact that getting hold of the MacGuffin is often way more challenging than the protagonists expect.

The hard truth is that sustained growth is rarely in the gift of governments. Unless a Chancellor has the fiscal room to release vast sums of money into the economy via tax cuts or spending, any prolonged period of expansion tends to be driven by benevolent conditions in the global economy. Those conditions, however, are at best uncertain. The International Monetary Fund says its forecasts for medium term global growth are “at their lowest in decades”. Betting the farm, therefore, on a solution to our mounting problems that looks very hard to deliver is a high-risk strategy.

Councils currently slicing millions out of their budgets should not give up hope that sustained growth may return soon…But neither should they assume it is only a matter of time before the good times roll.

This is as true at the local level as it is nationally. Councils currently slicing millions out of their budgets should not give up hope that sustained growth may return soon, enabling the Treasury to spend more freely. But neither should they assume it is only a matter of time before the good times roll. As the IMF report points out, some of the gloomy outlook for the world economy can be put down to normal economic cycles, but the greater part is due to the intractable specifics of our crisis-ridden era: military conflict, rising protectionism, extreme weather.

The wiser course is to seek out the non-financial resources to help us solve our formidable challenges, alongside the drive for growth. As an increasing number of councils are recognising, those resources are to be found outside the Town Hall. There is a wealth of untapped insight, energy and actual tangible assets in communities that can be used to address a wide range of challenges: health inequalities, demand pressures on public services, crime, poverty, the environmental crisis.

Releasing that community resource is not straightforward. It means councils working in a fundamentally different way, developing the mindset and skills to mobilise communities rather than just deliver services, to build social capital rather than just relying on their own dwindling financial capital.

Being a socially richer country is just as important a goal of policy and practice as being economically richer.

To some, investing in such a shift at a time of constrained resource feels like a risk. But wiser heads know that creating communities that are compassionate and confident enough to generate positive change on their own behalf is actually a very solid hedge against the high possibility of continued economic stagnation.

As any good screenwriter knows, the best movies reveal that even if the hero fails to seize the MacGuffin, they still gain something more profound: an insight into themselves. Maybe in a more considered drive for growth, we can enjoy a similar epiphany, recognising that being a socially richer country is just as important a goal of policy and practice as being economically richer.

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