Overcoming barriers to inclusive growth in practice

November 29, 2017   By Jessica Studdert, Deputy Director, NLGN

Last week’s Budget confirmed more grim economic news. Downgraded forecasts predict sluggish growth into the 2020s and productivity remains stagnant, and with it living standards which have now plateaued for a decade. So there is a twin challenge to achieve not just sustainable growth – which expands the overall level of economic activity in our economy – but also to ensure access to the opportunities of growth, with prosperity for everyone.

The concept of Inclusive Growth has become increasingly popular as an ideal strategic goal to meet these two objectives – championed by national policy advocates including the JRF and the RSA. They advocate growth strategies that stimulate both demand in the labour market for higher value employment and sectoral mix, and the supply of skilled labour through better training, connectivity and housing. Because of the interconnectedness of the different aspects that formulate a comprehensive inclusive growth strategy, the local or sub-regional level is deemed the right scale at which to have an impact. Increasingly, local practitioners are considering how to apply the concept of inclusive growth to their area.

The NLGN’s latest Innovation Briefing, which is published today, explores how inclusive growth is being pursued in practice by different local authorities. The challenge of achieving it is not simple, for a number of reasons:

Firstly, the levers available to local authorities are not clear-cut. Despite some areas benefiting from growth-related devolution deals, the local architecture of public services and infrastructure is still largely influenced by different government departments. So for example, in terms of meeting the objective of getting people into high skilled jobs, responsibility falls across three major government departments – the DWP (employment support), DfE (skills) and BEIS (the Industrial Strategy which includes skills). In practice, this leads to fragmentation in places, and a huge amount of energy on behalf of local practitioners in patching together different parts of the system to achieve a more complex objective than Whitehall distinctions allow.

Secondly, national policymaking can all too often be a barrier rather than an enabler to achieving inclusive growth outcomes. Nationally-devised strategies for growth clearly focus on the headline figure gains, ignoring the different experiences of places. So for example, the new Industrial Strategy promises a focus on those areas where there are the quickest productivity gains to be had, with only micro remedial action planned for those further behind. A “low-hanging-fruit-first” growth strategy might make sense for a national politician determined to demonstrate results, but this can work against the priorities of localities, none of whom have less ambition for their area.

And finally, it is hard to establish exactly what works – how to have impact and how to measure that impact. Different places have different barriers and opportunities in practice – for example some parts of the country need to stimulate economic demand in the first place, whereas others such as London and parts of the South East are highly productive, but that productivity relates only to a few industries and the opportunities to benefit from those rewards are narrow. In the context of these different starting points, there needs to be a clearer understanding of how local policies have impact and how to measure progression.

Our Inclusive Growth in Practice Innovation Briefing reflects this need to consider different approaches, how they have been devised to respond to identified local priorities, how different levers have been used, and where learning can be shared between councils based on what works.

The challenges of achieving inclusive growth in practice is an issue which NLGN will remain engaged in, through our changemaking programme of research. If you have an interest in this area, or are developing particular activity, I’d love to hear from you on jstuddert@newlocal.org.uk.

The latest NLGN Innovation Briefing – Inclusive Growth in Practice – is launched today and is available exclusively for our members. For more information about the range of benefits of joining our community of innovative councils, please contact Richard Nelmes, Head of Network, on rnelmes@newlocal.org.uk.

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