HOW can localities respond to economic change and develop strategies to revitalise local and regional economies? How can the public, private and voluntary sectors drive regeneration and tackle social deprivation and inequality? How can powers and resources be devolved to the most appropriate (local) level to benefit rural communities and places?
Some of these questions were taken up in The Review of Sub-National Economic Development and Regeneration (SNR) in 2007. The Review considered the measures which the government had put in place to improve sub-national economic development and tackle deprivation. This traced how, since 1997, the Government had developed a strategy to increase productivity in the UK to meet its central economic objective of achieving high and stable levels of growth and employment. This resulted in policy interventions built around a framework of ‘five drivers’ called ‘the engine of growth’. The drivers were: investment in physical capital, skills in the workforce, innovation, competition, and enterprise. The drivers were accompanied by a set of productivity indicators from HM Treasury to monitor progress (e.g. investment as a share of GDP, international comparisons of overall level of qualifications, business start up and market regulation).
Yet alongside these conclusions, the Review built upon the Local Government Act 2000 which included a new power of well-being, providing local authorities with the power to do whatever they considered necessary to promote or improve the economic, social and environmental well-being of their area. It was also taken forward in the preparation of sustainable community strategies where local authorities were encouraged to work in partnership with other organisations to take actions that affect local quality of life. More recently, the development of the LAA National Indicator Set in 2008 established a number of targets which provided a broader context to the work of local authorities in economic development other than simple productivity – from children in poverty, to 16-18 year olds not in education, training or employment and the take up of formal childcare by low-income working families.
Collectively, these policy documents illuminate how the productivity agenda (the “five drivers”) is being enveloped by a consideration of economic well-being. For productivity expressed through GDP, investment in business start ups or number of jobs created does not, in itself, tell us anything about quality of life or account for non-monetarised costs and benefits such as the quality of a job (e.g. work-life balance, promotion opportunities, debt) or environmental degradation. Add to this the fact that this model of unending economic growth that we have been following is underpinned by a fiscal system which, as recent events have exposed, has run out of control, provides local authorities and other public sector organisations with opportunities to make choices and pursue activities which play a role in promoting economic well-being. To illustrate the importance of economic well-being to rural communities and the implications of continuing to think solely in terms of the productivity agenda, I would like to make three points.
Firstly, at a conceptual level, what is economic well-being? The concept features most prominently in literature from the Department for Children, Schools and Families (DCSF) where ‘achieving economic well-being’ forms part of the national curriculum and aims to teach children how money works. Here education is seen to offer the most effective route out of poverty. For example, in the ‘Every Child Matters’ Strategy (2005), economic well-being relates to engagement in further education or training, being ready for employment and access to transport and material goods. In their publication ‘Prosperity without Growth? The transition to a sustainable economy’ (2009), the Sustainable Development Commission (SDC) presented the view that sustainable development must identify ‘good enough’ measures around economic management in relation to building a sustainable macro-economy and respecting ecological limits.
A number of Regional Development Agencies (RDAs) have cooperated in the development of the Index of Sustainable Economic Well-being (ISEW). ISEW starts out with standard economic measures and then makes specific kinds of adjustments to account for the social and environmental factors excluded (e.g. air, water and noise pollution, loss of habitats). The RDAs showcased interventions which support both regional economic growth and sustainable development principles in their report ‘Smart Productivity’. The creation of Integrated Regional Strategies – implemented as part of the SNR – and duty for first tier local authorities to produce an Economic Assessment – may now create real opportunities for maximising opportunities at the local level in terms of economic well-being.
It is worth noting that there is no agreed upon definition or measure of economic well-being. The key point is that measuring progress solely in economic terms misses the key fact that the economy is a means to an end, not an end in itself. In comparison, economic well-being offers a more holistic view of the contribution made by people, households, businesses and communities to a healthy economy, society and environment.
Secondly, why is economic well-being important at the local level and particularly relevant to rural places? The productivity agenda does not capture goods and services produced in urban locations but consumed by rural residents in rural GVA figures, and urban GVA data does not recognise the value of rural commuters to firms and services in those areas - net commuting from rural to urban areas represents 17% of all employment for rural residents. Nor does the productivity agenda account for other non-costed contributions in rural areas such as volunteering (which tends to be higher in rural areas) or environmental shocks (such as flooding). In rural places the nature of economic activities are often wider than those which are traditionally perceived to be produced by an area’s ‘working population’, delivering a suite of social, environmental and economic benefits in an integrated way. Local authorities and their voluntary and community sector partners are often ‘closest to the ground’ – operating across silos, placing the quality of the outcome ahead of standard operating procedures in the pursuit of economic well-being.
The Local Assessment Policy Statement (2009) from Communities and Local Government provided a mandate for local authorities to carry out an assessment of economic conditions to take account of the broad range of factors that impact, both positively and negatively, on the economic well-being of individuals and communities. Some local authorities have taken this forward to include a specific objective on economic well-being in their Corporate Plans and/or Sustainable Community Strategies. To encourage further take-up, in 2003 the Local Government Association produced “Powering up: making the most of the power of well-being” which provided examples of local authority experiences in using the power. Notwithstanding the rising recognition of the importance of well-being, a report by CLG in 2008 - “The Practical Use of the Well-being Power” - found patchy use of the well-being power by local councils and a lack of awareness of the opportunities that it could provide to improve well-being and quality of life.
Thirdly, what, then, can be done to translate economic well-being as a concept and policy driver into a practical “hands on” delivery tool? In January 2010, Rose Regeneration (in partnership with Rural Innovation) completed a project for the Commission for Rural Communities (CRC) to identify and disseminate innovative examples of economic well-being projects at a local government level in rural England. This led to the publication of guidance for local authorities and a set of thirteen best practice case studies. The case studies included ‘Xsite’, a Skate Park in Skegness, developed and run by young people providing employment and recreation around extreme sports in Skegness, Lincolnshire. The skate park increases affordable leisure opportunities for local people and visitors; encourages young people to take part in education, training and employment; creates new services of value to the community (e.g. cafe, after-school club); and draws new money into the local economy through employment and hosting high profile extreme sports events. Another case study is “Pension Extra Benefit Take-up Campaign”, a rural outreach project led by two Citizen Advice Bureaux’s in East Cornwall. Set up to make it easier for pensioners living in rural settlements to find out about and claim their full entitlement to benefits, the campaign has not only improved pensioner incomes but is also delivering health and social benefits by providing useful information and increasing the amount of money circulating in the local economy.
Overall, the case studies demonstrate that a number of key drivers underpin economic well-being projects. These include personal drive and commitment by a project sponsor; partnership working; local authority involvement (but this does not mean that projects need to be initiated or led from within a council and/or by economic development staff, be attached to funding streams or directly reference he Local Government Act 2000); and positive engagement with the client groups. Further information about the sustainable economic well-being project (and all of the good practice case studies) is available here.
With the formation of a coalition government and potential cuts and savings to be made across the public sector, turning away from narrow, efficiency-driven economic indicators towards economic well-being is becoming ever greater and more urgent. For understanding the real impact of economic decisions on people’s lives need to be at the heart of future economic policy: what have been the limitations, barriers and constraints within the current economic system and does economic well-being offer an alternative?
Jessica is a rural practitioner at Rose Regeneration. She can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it. .