Transcript London`s Place in the UK economy

Government or Governance: how to
co-ordinate a complex economy in the
Greater South East
Ian Gordon
LSE London and Spatial Economics Research Centre
London School of Economics
LSE London HEIF4 seminar
‘The Greater South-East- London’s Super Region’
2.00 pm, Wednesday June 10th, 2009
The Paradox of Non-Governance of the GSE
• 40 years ago when (G)SE was quite simple region
and London not seen as critical to UK economy:
– rhere was substantial investment in joint working in
integrative strategic planning (SPSE / JTPSE)
– though lacking mechanisms for implementation
• esp for CG infrastructure investment plans (DSPSE)
• Now the GSE is a complex super-agglomeration
recognised as key to UK competitiveness – and cityregions/FURS/MAAs are back in fashion:
– the GSE is the one city-region with no governance initiative
– and at least 3 unco-ordinated GORs/ministers ignoring its
existence
OUTLINE
• How ‘London’ became the GSE
• Barriers to recognising it as an
integrated economy
• Three exemplary cross-regional issues
• Addressing the Governance Problem
How the London Became the GSE
A Story in Two Acts
1. The core city acquires a hinterland (1950s-70s)
– a support platform, meeting the city’s need for labour
• Directly, via (white collar) commuters into central London
–
–
From increasingly far as demand for lower residential densities grew
Adding demand for consumer services in places with older economic bases
• Indirectly, from 1960s, as routinisable / back office functions moved out
–
Leaving core functions, needing face-to-face, and graduate workforce
2. ROSE grows up economically (from 1980s)
– a very competitive but inter-linked economy
• Upgrading of decentralised functions – others going further afield
• Recognition of its skill pools – especially on the west side – as key
asset + green-field sites with better access to ports/national market
• Growing attraction to high tech + advanced services & some
international HQs – with modest need for access to central London
• Higher rates of innovation as well as growth
• Evolving networks of linkages within region – as well as internationally
Barriers to Recognising the
GSE as an Integrated Region
• Places and activities are networked together with
many local/ad hoc connections – rather than
generalised links to ‘the region’
– Functional integration and shared outcomes emerge from a
high density of indirect linkages – of which few are aware
• Places are quite different in their roles, population
mixes, and political preferences - and want to stay
that way (e.g. ROSE unified by not wanting to be London)
– But it is the real economic integration of the region which
underlies this – by reducing constraints on who can live or
operate where
The Greater South East
Commuting Network (Polynet study)
The Outcome: a common Labour
Demand Pressure Across the GSE
Three Strategic Cross-Border Issues
• Avoiding Wasteful Competition
• Reducing Disparities in Labour Market
Outcomes
• Providing for Orbital and Eccentric
transport Needs
Avoiding Wasteful Competition
• Where policy units cover less than effective functional regions,
there are strong temptations to:
– engage in wasteful (zero-sum) competition - rather than focus on
– creating productive assets with benefits spilling-over borders
• In London versus RoGSE case there are plausible arguments:
– London’s strengths are quite different – so no real competition
– Local clusters are more competitive – so keep growth around nodes
– Londoners need jobs more – so they should hang on to as many as
possible
• But none of these arguments is more than partially valid –
interests of all depend on a more collaborative basis
– But how can this be done, given existing lines of responsibility, and
problems of knowing what regional interest is
– Start from relations between sub-regions: e.g. western wedge +
crescent; or tackling the weak performance of eastern areas in all
three regions
Reducing Disparities in Labour Market Outcomes
• Big differences in unemployment evident within GSE – locally
and across regional borders (inner/outer and W/E)
• Basically reflect who lives there (and position in employers’
preferences) not local economic performance
• Strong regional performance (full-employment) helps reduce
gaps – boosting sub-regional economies doesn’t
• Despite the fact that (as in London) extra jobs may go very
largely to commuters, the issue is not one of ‘locals versus
outsiders, but of joint action to:
– Promote regional demand + upward mobility of whole workforce
– Reduce impacts of ‘negative’ characteristics by equal opps. +
working on employability
– Work on all the processes (education, family, health etc.)
reproducing disadvantage
– Minimise risks of substantial, sudden job losses
– Improving employer confidence in workers from high U/E areas
Providing for Orbital and Eccentric Travel
•
Patterns of demand in the regionalised economy (commuting, business
links, personal servicing) are harder to channel to public transport:
– Effect of inherited network structure (generally)
– Dispersed demand pattern
•
Mostly a problem within one of the three regions, but inter-regional
because:
– Many of worst problems around edges of London, with consequences on
both sides
– Many parallels between suburban and exurban problems
– Fears about loss of business to competing centres discourage demand
management
•
Key issues highlighted in Multi-modal studies (esp. ORBIT and Thames
Valley) involving:
– Road capacity + adapted rail network where available + pricing + planning
– Innovative uses of express coaches (hub and spoke around M25 ring) ⇢
management questions (Strategic Coach Authority? Or the regions jointly)
– Balance of progress inside versus outside London will affect relative growth
rates; how to relate top-down transport decisions to local planning?
Governance as the Issue
• Examples suggest:
– Not need to develop / enforce common policies across whole
region (i.e. Government?)
– But initiatives cutting across territorial/sectoral/functional
boundaries to :
• reduce negative externalities (e.g. internal competition for projects)
• encouraging positive externalities (e.g. training workers who may commute)
• improving coherence of local (infrastructural / cluster) programmes
as / where important (selective collaborations)
about implementation more than strategy
and seeking to develop/incentivise better processes
(i.e. Governance ?)
Possible Ways Forward
•
Getting the Regional Structure Right (=Merger) ?
no: the one size of ‘standard’ English model of regionalisation (assembly? + DA +GOR)
does not fit this complex region
•
Consensus-building and improved co-operation
–
–
–
•
Conventions for co-operation and co-existence:
Common fronts for external relations:
Promoting a stronger cross–regional consciousness:
Enhanced joint working
– Cross-regional sectoral strategies
– Sub-regional joint working across regional boundaries:
– Incentive structures for regional agencies:
•
But also Leadership - from above - a GSE Prefect / Minister?
– To use stick/carrot and head-banging to promote integration
– To take responsibility and provide authoritative answers on projects,
resourcing and policy issues with national significance / resonance I
Summary
• In London context the Extended Economic Region is essentially
the outcome of disjointed market adaptations/choices
• From these eventually developed a regionalised urban economy
linked by rich web of indirect connections
• Making the most of these requires development of a
governance capacity
– transcending the horizons, action spaces and biases of local actors
/ competitive strategies
• But this too needs to proceed via an incremental process,
building
–
–
–
–
a comparable web of collaborations,
a more sophisticated understanding of shared interests,
practice in acting on these
and some leadership to spur this on