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November 24, 2010

Economic revival is linked

One of the most widely acknowledged public policy success stories of recent years has been Highlands and Islands Enterprise and its understanding that the economic revival of the region is inextricably linked with the social and cultural vibrancy of its communities. But despite the evidence, it seems that the current direction of travel being taken by our enterprise agencies is in the opposite direction. Perhaps this endorsement by IPPR will convince HIE not to lose faith

Ed Cox

You have to admire David Cameron’s persistence with the Big Society theme. Behind the scenes at the Conservative Party Conference it was treated with considerable mirth with ministers apparently referring to it as “BS”. At the ippr north fringe event, there was less scepticism as Nat Wei made a strong case for the role Big Society played historically in the industrialisation of Northern cities and pointed out its potential for future economic and social transformation.

Although the concept of ‘Big Society’ seems ever more elastic, new evidence of the importance of community dynamics in the pursuit of economic development is coming to light. In a new report published today, researchers compared three ‘matched pairs’ of deprived neighbourhoods in Liverpool, Wakefield and Middlesbrough and analysed why some areas improved their prospects over the past decade while others lagged.

The study controlled for issues such as ethnicity and housing tenure,  and three factors came to the fore in explaining why some neighbourhoods improved and others did not. First, the extent of ‘residential sorting’ – the impact of people moving in and out of an area. Second, the relative success of welfare-to-work programmes in linking local residents with jobs in the wider area. But thirdly, and significantly, it was the internal and external relationships that characterise the neighbourhood which seem to make a big difference as to whether people were more or less likely to travel any distance to get a job.

In improving neighbourhoods, higher levels of informal community activity, strong leadership and wide travel horizons were clearly associated with people’s outlook on the world of work and their propensity to travel to nearby job opportunities. By contrast, lagging neighbourhoods seemed characterised by more defensive and inward looking community identity, lower confidence and aspiration and less likelihood to travel out of the neighbourhood to find work. Whilst it is difficult to determine the relationship between cause and effect, in simple terms it would appear that the big society has an important contribution to make to tackling economic deprivation.

Some examples illustrate the case. Speke and Croxteth in Liverpool are considered to be two of the most deprived neighbourhoods in England. Speke has been the site of remarkable investment, including at Liverpool John Lennon Airport, Jaguar Land Rover and a number of new retail and business parks, and yet even with so many jobs on the doorstep, levels of deprivation have grown. Residents talk of the neighbourhood having an ‘island mentality’ and this is one of the factors which makes it difficult for people to benefit from the new opportunities created by investment.

Croxteth on the other hand, despite its negative reputation, has seen significant improvements for the local population without as much nearby investment. A key to Croxteth’s success seems to stem from such initiatives as its community-run ‘communiversity’. Not only does this local initiative build skills and offer apprenticeship-type opportunities, but its very existence appears to provide leadership and generate a sense of shared confidence in the area which then ensures any local investment is turned into local opportunities.

Traditionally, community development and economic development specialists might not have been comfortable bedfellows, but perhaps this needs to change. Whilst the report shows that improvement in Northern cities has depended heavily on economic growth, a rising tide does not lift all boats and more strategic approaches to economic development must be complemented by carefully targeted intervention at the micro-level. If Big Society is a call to arms, then perhaps it needs to call Local Enterprise Partnerships to take very seriously the quite specific needs and dynamics of its poorest neighbourhoods.

The report Rebalancing Local Economies has been produced by ippr north, the Joseph Rowntree Foundation and the Northern Way.