Local elections, local action. It’s local election day tomorrow in England (and parliamentary elections in Scotland and Wales), so today’s Digest looks at what’s happening at a local level to build a fairer, more sustainable and more resilient economy.
~~Local elections, devolution and the North. IPPR North set out the importance of this year’s local elections, particularly for cities, towns and rural districts in the North of England, and argue that the Government’s forthcoming devolution and local recovery white paper offers an opportunity for a clearer, more transparent framework for allocating and distributing devolved powers.
~~Mapping local action. The New Economics Foundation’s ‘Change the Rules’ gathers together lots of resources on the policies needed at local level, and maps a wide range of local enterprises and projects including cooperatives, mutuals and community businesses.
Community wealth building. One of the most interesting ideas to emerge from local government in recent years has been that of ‘community wealth building’. Pioneered in the US city of Cleveland, and in Preston here in the UK, community wealth building is the idea that, as far as possible, local spending in a city or locality should remain in that city or locality, so that it can create jobs and wealth locally rather than elsewhere. Under a ‘CWB’ strategy, local councils and other ‘anchor institutions’, such as hospitals and utilities, commit to sourcing as much as possible of their services from local businesses, enabling jobs to be created and retained locally. Some cities, including Preston, have been particularly focused on supporting cooperatives and other community enterprises to meet local demand, ensuring that local wealth is even more equally spread.
~~Community Wealth Building after Covid-19. In their October 2020 report, think tank Common Wealth offered a vision for democratising the economy after Covid-19, with recommendations including the reform of procurement practices and the creation of a Community Wealth Building Act.
Local government and the response to Covid-19. CLES sets out a practical framework for local authorities to respond to the economic crisis and rebuild fair, inclusive and secure local economies.
~~Social value and procurement. Under the 2013 Social Value Act, local authorities are able to apply non-financial criteria to procurement contracts, thereby enabling them to support local businesses and insist on good working conditions. David Burch of CLES describes how Manchester City Council has been doing this (with CLES’s support).
~~A new model for local economic development. The Centre for Local Economic Strategies and the US-based Democracy Collaborative suggest that the economic shock of Covid should be an inflection point for a new approach to local economic development. With the pandemic having reminded many people of the importance of the community, they describe community wealth building as the ‘new common sense’ .
~~Insourcing. A key element of community wealth building is procurement of goods and service. Over recent decades many public services have been ‘outsourced’ to private providers, with mixed success at best, and some scandals of profit-taking and incompetence at worst. Tom Lloyd-Goodwin and Neil McInroy argue in the Guardian that outsourcing as a strategy has failed, and that ‘insourcing’ - taking services back in house - along with ‘social licensing’ of ethical businesses fit to provide public services - should increasingly replace it.
Climate action at local level. In the last few years a growing number of local councils have ‘declared a climate emergency’ and committed themselves to action on climate change, including the ultimate goal of ‘net zero’ emissions..Local authorities’ powers are limited, however, and most have few resources for non-statutory work. So in their place there is a great deal of imagination and innovation going into local authority action in this field - as well as a demand that central government gives local councils more powers and resources.
~~Net zero. UK100’s ‘Net Zero Local Leadership Club’ brings together those councils now committed to achieving ‘net zero’ emissions, as soon as possible and by 2045 at the latest. The UK100 ‘knowledge hub’ provides a series of case studies of how different local authorities are acting to reduce their own and local emissions and to adapt to the climate changes we are already experiencing.
~~Global local action. C40 Cities is the collaborative network of city mayors from the world’s largest cities committed to action on climate change and a sustainable future. Led by the mayors of Los Angeles and Milan, these cities last year committed to investing in a ‘green and just recovery’, and showcased what they are doing to deliver it.
~~Green recovery. Jonty Leibowitz, then at CLES but now adviser to Labour Shadow business and climate minister Ed Miliband, has set out how local authorities can build secure green recoveries at local level.
Local and regional banking. In pursuit of more locally and regionally governed economic development, there has been increasing interest over recent years in a more localised and regional banking system. Unlike many countries the UK’s banking system is more or less entirely national (and international), and the argument is made that this inevitably skews financing for business investment towards London and the South East of England. In other countries, notably Germany, local and regional ‘stakeholder’ banks, largely or wholly publicly-owned, have played a critical role in ensuring that investment and job creation are well distributed geographically, and that small and medium sized businesses which might be ignored by large private banks are provided with patient (long-term) finance.
~~Regional banking in Germany. Daniel Ticsher explores the benefits that regional banks bring to diversity and resilience, finding that Germany's more diverse banking sector weathered the global financial crisis better than the UK’s highly concentrated private banking system.
~~A more diverse banking sector. The New Economics Foundation establishes the economic case for a more diverse banking sector, arguing that this ecosystem would be more resilient, socially focused and give better returns to customers than commercial banks. Elsewhere NEF proposes that the UK government retains its majority stake in the Royal Bank of Scotland and transforms it into a public banking network.
~~Stakeholder banks. In OpenDemocracy’s e-book New Thinking for the British Economy, Christine Berry proposes a UK ecosystem of stakeholder banks.
~~A Post Bank network. The Communication Workers Union and the Democracy Collaborative propose the creation of a publicly owned Post Bank network supported by regional development banks.
~~Local banking in Scotland. Common Weal presents the case for a local, mutually-owned 'public-good banking network' in Scotland to restore bank branches to communities which have lost them.
~~Cooperative local banking. The New Economics Foundation explores the benefits of cooperative banking. It cites international evidence showing that mutually-owned banks are more focused on supporting high streets, are better at lending to SMEs, and are likely to be better managed and more stable in a crisis. It has published a guide for people and community organisations interested in establishing a new regional community bank.
Devolution. A decade of cuts to local authorities, sharp regional inequality and the continued effects of centralisation of power in Westminster (e.g. the Covid-19 response) has led many to argue for greater devolution of money and power to local authorities.
~~City-regions. Former banker and Tory minister Jim O’Neill argues that city-region mayors must be given greater powers if the Government’s ‘levelling up’ agenda is to work.
Net zero and greenwashing. A group of respected climate scientists branded the concept of net zero “a dangerous trap”, sparking an important debate within the climate community. The authors argue that net zero “helps perpetuate a belief in technological salvation and diminishes the urgency surrounding the need to curb emissions now”, pointing to the “fantasy” that bioenergy carbon capture and storage (BECCS) will allow for achieving net zero whilst avoiding the “difficult truth” of “immediate and sustained radical cuts to greenhouse gas emissions in a socially just way”.
~~In defence of net zero. Business Green’s James Murray described the article above as “a nuanced and in-depth assessment of the risks attached to the net zero concept” but gave a passionate defence of net zero targets as “one of the most successful environmental campaigns ever seen”.
~~How serious are we? The European Climate Foundation’s Joss Garman summarised the debate and pointed to the Treasury’s Net Zero Review next month as a “key moment” for the UK to demonstrate distance from greenwashing schemes that “lack integrity, transparency and detailed delivery plans”.
A rocky road to net zero? The FT’s Sarah O’Connor casted doubt over whether the green transition will create as many jobs as promised if the government follows its current path. O’Connor criticised the government for scrapping the Green Homes Grant as an example of “bluff and bluster”, where “seriousness and attention to detail” is needed, pointing to examples in Canada and Germany where policymakers have produced detailed sectoral plans for job creation and reskilling to secure a just transition for the most affected communities.
Business and net zero. 6 months ahead of COP26, a network of leading business groups launched The UK Business Group Alliance for Net Zero (BGA) to “increase political and business ambition”, with “a particular focus on enabling a successful delivery of COP26”.
Work
Working life in lockdown. The Centre for Labour and Social Studies’ (CLASS) Work in 2021: A Tale of Two Economies report brings together original analysis of ONS data, interviews with trade union reps and a survey of 2000 workers to paint a picture of workers’ differentiated experiences of the pandemic and how they are organising in response.
Four-day week in practice. The Communication Workers Union (CWU) struck an agreement with South Midlands Mail Centre to implement a four day week to boost productivity, create 37 “new full-time, four-day jobs” and reduce reliance on agency staff. The agreement came after a two year negotiation with the Royal Mail Group Board, which the CWU accused management of “managing decline through significant job losses” and introducing “dehumanising technology” with “unagreed productivity measures”.
Human-centred technology at work. The Institute for the Future of Work launched a project in partnership with the Carnegie Trust and the CIPD to develop best practice guidance for businesses as they introduce technology to balance employee concerns about work intensity, surveillance and work-life balance.
Increasing pay and working conditions through local government.Ahead of this week’s elections, the High Pay Centre published a report looking at what subnational authorities can do to support fairer pay and worker voice through schemes like the real Living Wage, employment charters and increasing public sector pay (Yorkshire Post coverage here).
Health and pandemic response
Focal point for NHS privatisation. We Own It launched the London Patient Protection Pledge following a US health insurance company’s (Centene) decision to take over 49 GP practices across Greater London through its UK subsidiary, Operose; Operose’s CEO has recently taken up a position in No.10 as an “expert adviser for NHS transformation”.
~~Backlash from civil society. We Own It produced an open letter to Clinical Commissioning Groups (CCGs) outlining the “extensive track record of bad practices” committed by Centene, the US owner of its UK subsidiary now running the GP practices (Twitter thread summary here).
The case for a public inquiry. The Institute for Government outlined the case for an investigation of government actions during the Covid pandemic, calling for a public inquiry to start this month: “Delaying an inquiry is unnecessary and unhelpful, with anonymous briefing and leaks filling the vacuum in public discussions about the government’s management of the crisis. An inquiry is the correct way to uncover the truth, deliver accountability, and learn lessons”.
International and immigration
Vaccine IP waiver update. The Independent’s Ben Chu produced a summary of recent developments on the debate to waive coronavirus patents, whether the Biden administration may support it and the technical challenges of increasing vaccine manufacturing capacity.
UK continues cuts to international aid. The UK imposed a “devastating” 85% cut in aid to a UN family planning programme “that could have helped prevent some 250,000 maternal and child deaths”. Sky News’ Deborah Haynes summarised the impact in a short Twitter thread.
Brexit and the creative industry. Over 300 creative organisations signed a letter urging the government to negotiate a visa waiver with the EU so artists can tour across Europe. The letter also called for an emergency fund for the creative industry to prevent job losses and business failures.
Routes to regularisation for undocumented people. The Joint Council for the Welfare of Immigrants (JCWI) published a report looking at “the lives of undocumented people in the UK and a new campaign for simple, workable reforms that could break the cycle of insecure immigration status”. (Twitter thread summary here)
Fiscal policy
Reforming fiscal rules to confront uncertainty. NIESR released a substantial report on how to design a new fiscal framework, produced with the help of a variety of experts such as former central bankers, civil servants and Chief Secretaries to the Treasury.
The macroeconomic case for the Green New Deal. Economist JW Mason gave a 25 minute video presentation explaining “why the economic situation calls for even more spending than the (surprisingly ambitious) proposals from the Biden administration”.
Equalising CGT to pay for covid? The FT’s Emma Agymang explored the Biden administration's plan to double capital gains tax and its potential effect on other countries' plans to “shore up their own public finances in the wake of the pandemic”.
~~Will the UK follow suit? The Shadow Financial Secretary to the Treasury asked whether Treasury Ministers will back Biden’s plans for a global minimum corporate tax rate for the third time in the House of Commons.
US infrastructure debate. The Democracy Collaborative’s Thomas M. Hanna commented on the US debate over what should be considered as ‘infrastructure’ and asked “who should own and control our infrastructure?”, pointing to failures in public-private partnerships in the past and advocating community control and democratic public ownership.
Climate is more important than debt. Peter R Orszag, former director of the Office of Management and Budget and the Congressional Budget Office, argued that the debate over US stimulus spending should favour addressing climate change rather than containing fiscal risks: “because it probably won’t be possible to accomplish both, climate mitigation must come first”.
Paradigm shift
“The Free Market is Dead: What Will Replace It?”. An article for Time Magazine reiterated the argument that a paradigm shift is underway in US economic policymaking: “corporate America’s newfound support for more public investment is not a temporary phenomenon. We are witnessing the most profound realignment in American political economy in nearly forty years.“
“The left is winning the economic battle of ideas”. The FT’s Chris Giles published a piece proposing “the left is winning the economic battle of ideas”, pointing to the levels of discontent sparked by the pandemic as a trigger for more radical economic ideas: “working out how to meet the public’s legitimate expectations of a leftward shift in economic policy without undermining opportunities for growth will be the great economic experiment of the post-pandemic world.”
The Return of the State. A book containing 20 essays by council members of Progressive Economy Forum detailed how to restructure Britain for the common good through a variety of policy areas, from public service reform, changes to corporate governance, industrial strategy and more.
Industrial strategy. James Meadway argued that the government’s recent decision to block a takeover of a UK silicone chip manufacturer “represents another dramatic break with past economic policy”, “could be the key link in an industrial strategy for the UK’s whole high-tech sector” and has “global implications as the trade and tech war between the US and China builds”.
Symposium on a Systemic Recovery. A group of leading economists including Mariana Mazzucato, Gita Gopinath, Paul Krugman and Mark Carney discussed rethinking the design, operation and management of the overall economic system in an OECD conference on ‘A Systemic Recovery’ (a 3-hour video of the event can be watched here).
