Transcript Can devolution deliver inclusive growth?

Can devolution deliver inclusive
growth?
Rich Crisp (CRESR)
SIPS Policy Forum
30th November 2016
An idea whose time has come?
• IMF Inclusive Capitalism conference (2014)
• OECD Inclusive Growth in Cities campaign (2016)
• All Party Parliamentary Group on Inclusive Growth
(2014-16)
• RSA launch Inclusive Growth Commission (2016-17)
• GM, Leeds and Sheffield city regions + others all
pursuing IG agendas
• ....'an economy that works for everyone'... to make sure
that everyone can share in the country’s wealth (PM May)
Enduring inequalities
Source:
Rae et
al.
(2016)
Brexit and the 'left behind'
Source: RSA (2016)
The Inclusive Growth Monitor
Full report and technical
note:
https://www.jrf.org.uk/report
/inclusive-growth-monitor
Dimensions and indicators in inclusion theme
Dimension
Income
Indicator
Full definition of indicator
Out of work benefits
% of WAP receiving out-of-work benefits
In-work tax credits
% in-work households with and without children
receiving Child and/or Working Tax Credits
Low earnings
Gross weekly pay at the 20th percentile
Housing affordability
Living costs
Labour market
exclusion
Housing costs
Ratio of lower quartile house prices to lower
quartile earnings
Median monthly rents for private sector
dwellings
Fuel poverty
% of households classed as 'fuel poor'
Unemployment
% of WAP not in employment but actively
seeking work
Economic inactivity
% of WAP classed as economically inactive
Workless households
% of working-age households with no-one in
work
Dimensions and indicators in prosperity theme
Dimension
Output growth
Indicator
Full definition of indicator
Output
Gross Value Added (GVA) per capita
Private sector businesses
Number of private sector workplaces per 1000 WAP
Wages/earnings
Median gross weekly pay for full-time workers
Workplace jobs
Employee and self-employed jobs by working-age
population (jobs density)
People in employment
% of WAP in employment (employment rate)
Employment in low pay
sectors
% of workers employed in administrative and
support services, wholesale and retail trade,
accommodation and food services, and residential
and social care sectors
Higher level occupations
% workers in managerial, professional and
technical/scientific occupations
Intermediate and higher
level skills
% WAP qualified at NVQ Level 2 and above
Educational attainment
% of pupils at the end of Key Stage 4 achieving 5 or
more GCSEs or equivalent at grades A* to C
(including English and Mathematics)
Employment
Human Capital
Prosperity doesn't always benefit all...
What does Inclusive Growth mean?
Source: IGAU (2016)
"Broad-based growth that
enables the widest range
of people and places to
benefit from economic
success. It's purpose is to
achieve more prosperity
alongside greater equity in
opportunities and
outcomes"
Source: RSA (2016)
Different shades of inclusive growth
Inclusive devolution?
• City regions seen as key (but not only) spatial scale to
deliver inclusive growth:
– Need for 'social' devolution and 'more funding to support
inclusive growth at local level' (RSA IG Commission)
– 'By 2020, the Manchester city-region will have pioneered a
new model for sustainable economic growth based around
a more connected, talented and greener city-region where
all our residents are able to contribute to and benefit from
sustained prosperity and enjoy a good quality of life” (GM
Stronger Together Strategy, 2013)
What might that look like?
• IGAU (2016) consultation proposes:
– A more inclusive economy (Living wage,
procurement policies, flexible working, social
economy, quality jobs, philanthropy)
– Including more people in opportunity (basic skills,
in-work IAG, workforce development, targeted
apprenticeships, supporting HTR) plus actions
around transport, health/social care and early years
and education.
Reasons to be cheerful...?
• Recognises weaknesses of existing
economic models
• Renewed focus on social and spatial
inequality
• Devolution provides opportunities to
design and deliver local solutions
..or reasons to be cautious?
• Additional £7.4bn funding
through devo deals over
30 years set against
annual losses in CA areas
of:
• £4.89bn from public
spending cuts
• £4.09bn in household
incomes from welfare
reforms
Source: NAO, 2016; RSA, 2016
Final reflections
• Devolution provides opportunities to reflect on
inequalities and how these might be
addressed
• But difficult to achieve inclusive growth without
spatial rebalancing
• New concept, old solutions? Growth plus
model timid and lacks innovation
• Too much expectation placed on devolution as
vehicle for delivering inclusive growth
...what about the wider model of growth?
'Capitalism has been
characterized by “excess”—in
risk-taking, leverage,
opacity, complexity, and
compensation. It led to
massive destruction of value.
It has also been associated
with high unemployment,
rising social tensions, and
growing political disillusion –
all of this happening in the
wake of the Great Recession'
Largarde, MD, IMF 2014