Post by Alan Harding, Director of IPEG
One of the last Labour Government’s many targets, enshrined in the Regional Economic Performance Public Service Agreement (REP PSA) in 2002, was to ‘make sustainable improvements in the economic performance of all English regions and over the long term reduce the persistent gap in growth rates between the regions’. It was never altogether clear which part of that aspiration was accorded priority, nor what mechanisms were being employed to bring the second element about. Indeed, for policy analysts who were prepared to dig below the surface, there were reasons to suspect that the implicit driving force behind spatial development policy in England was the perceived imperative of managing growth in the London super-region more effectively.
Thus, for example, Treasury-inspired policy reviews in the fields of transport (Eddington), land-use and planning (Barker) and skills (Leitch) all came out in favour of refocusing public investment and recasting regulatory instruments to tackle pinch points and serve the ostensible needs of ‘hot’ labour market areas. The Sustainable Communities Plan of 2003, uniquely, drew a distinction between the growth management needs of the Greater South East and the ‘regeneration’ and ‘low demand’ challenges elsewhere. And official figures showed that in the years either side of the adoption of the REP PSA, regional spending per capita was growing faster in the London, South East and Eastern regions than elsewhere, even before mega-capital projects like Crossrail and the London Olympics came on stream.
As it turned out, Labour didn’t make it to 2014, when the first empirical test of its long term aspiration for regional rebalancing was due to take place. As the Coalition Government has since taken pains to point out, though, its predecessor, in common with every Government since the mid-1970s, presided over a widening of regional disparities that has accelerated more quickly in the UK than in other large, mature economies, including the USA. As Karel Williams and colleagues here at the university have established, the picture would have been starker still had the post-2000 expansion of public investment not helped create large numbers of additional jobs in the public sector and the ‘parastate’ in non-metropolitan England during Labour’s later years.
The Coalition Government has learned some valuable lessons from its predecessor about the political risk involved in setting measurable targets. It has also charted a course for rebalancing – of public finances, and between public and private sector employment – that clearly works against the short term prospects for more balanced spatial development. A cursory glance at the outcomes of the latest local spending settlement, for example, confirms that front-loaded cuts are falling most heavily upon England’s poorest places – disproportionately concentrated in the North – whilst the areas that escape most lightly are concentrated in southern shire counties.
And yet a commitment to rebalancing – towards manufacturing from services, exports from domestic consumption, and clean from polluting economic activities and energy supplies, as well as spatially – remains strongly represented in Coalition rhetoric. Consider, for example, Nick Clegg’s introduction to last year’s Local Growth White Paper in which he noted that ‘Governments of the past have contented themselves with growth concentrated heavily in some areas of the country… and within a limited number of sectors – notably, financial services. Yet the banking crisis and ensuing recession have proved that model is unsustainable. Crucially, it is also deeply unfair’. Or George Osborne’s comments on budget day this year; ‘Yes, we want the City of London to remain the world’s leading centre for financial services, but we should resolve that the rest of the country becomes a world leader in advanced manufacturing, life sciences, creative industries, business services, green energy and so much more.’
A year into its term of office, the Coalition can now point to a modest number of new, relatively low-cost initiatives that may make some contribution to various forms of rebalancing that could benefit non-metropolitan England in the longer term. What remains disappointing is the extent to which the academic community, particularly in the North, remains unrepresented in, and seemingly disengaged from, the ‘rebalancing debate’ either for the purposes of holding Governments of any political hue to account or, more positively, playing an active role in underpinning the economic, social, environmental or moral cases for limiting spatial disparities. At one level, our relative silence relates to a larger lacuna within the social sciences and humanities. I recall canvassing colleagues a few years ago, for example, for recommendations about work within economics or economic history which spoke to the long-run benefits of a spatially decentralised economy and was able to turn up but a single article that claimed to demonstrate, theoretically, how ‘peripheral’ growth generates greater returns than growth in the ‘core’ (of Europe, in this particular case). Equally, though, it raises some uncomfortable questions about the extent to which we, as social scientists, engage with issues that shape the places in which we live and work rather than, or at least in addition to, responding to the pressures that require us to demonstrate our global scholarly credentials.
The reason I set off on my largely unsuccessful trawl of literature on the advantages of spatial economic balance was because I was, at that time, part of an unsuccessful bid to bring the ESRC’s Spatial Economics Centre to Manchester. Since that time, I have watched as the LSE-dominated group that won that particular competition has advanced an increasingly influential but, in many respects, deeply problematic people-based ‘solution’ to spatial disparities. This essentially advocates dealing with the challenges that market-driven development throws up and limiting other interventions to enabling the movement of people to jobs. Next week in Liverpool, representatives of the N8 group of universities are meeting to discuss the prospects of developing a social science programme in and for the North. It will be interesting to observe whether, as well as congratulating ourselves for the contributions our institutions make to northern prosperity by the very fact of their existence, we can mobilise around an agenda that recognises we are of, as well as in, the North.