The new Government has pledged to ‘fix the foundations' of the country for the long-term by boosting economic growth with reforms to energy and planning.
Budget documents published last month said the upcoming White Paper on English Devolution will include ‘working with councils to move to simpler structures that make sense for their local areas, with efficiency savings from council reorganisation helping to meet the needs of local people'.
This sounds more like a focus on structures and seems ominously short-sighted as regards creating a vibrant local government, with revitalised and resilient local and regional economies.
It is evident that fixing the foundations is focused on a neoliberal prognosis, with a financial-friendly orthodoxy as regards macro fiscal and economic conditions for growth.
The hopeful sequence of events are that the levers of financially-friendly investment and planning will drive economic growth. Then, we will have more money in the public coffers to fund public services, which will mean more surplus for reinvestment and a virtuous cycle will follow.
We now live in an age of rolling and accelerating crises, with climate change and war. Furthermore, a Trump presidency may well bring new trade barriers with new levels of global economic instability, and a Brexited UK forlornly looking for trading pals in a world of peripatetic investment and corporate shareholder might. That is to say, the UK's best laid foundations are likely to be shaken.
As a nation we must not build our economy on old logic and certain instability. The global economy is a perilous place, riven with aggressive financialisation as it favours large corporations and the very rich, where the mere holding of assets is the basis for further wealth accumulation, with untaxed investment diverted away from our places and productive purposes.
To fix the foundations we need something more plural, with place-specific approaches that can capture and circulate wealth and allow for local creativity and productive investment in the face of financialisation and turbulence.
We need plans that are truly foundational: that invest in local government; public services; local economies; that build more circularity of wealth and put more economic power in the hands of local businesses and communities.
Strong resilient foundations offering the greatest potential for economic prosperity come from the public, commercial and social economies working and feeding off each other.
We need to look within our places and build from what we have and know. Economic resilience is not built by cutting planning red tape and making places inward-investment ready for more financialisation. That is a recipe which exposes our places to new vulnerabilities with many ill winds of wealth extraction.
There is no secret to true economic and place resilience. It takes an approach that recognises the interdependent roles of commercial, public and social economy.
Forget the simplicities of going for growth at all costs so public services and society will benefit. What we need is some common sense with a recognition that public services and the social economy is not just a mere outcome of economic growth or a cost, but an essential input.
Strong resilient foundations offering the greatest potential for economic prosperity come from the public, commercial and social economies working and feeding off each other.
Wealth-creating commerce needs public inputs. This includes direct public investment and business support, but also means vital local council services: effective waste collection, roads and trains that run on time and an educated workforce with happy people secure in the knowledge their elderly parents can heat their homes and their children are attending great nurseries and schools, all living in green and safe neighbourhoods. People thrive and are resilient and economically productive when basic needs are covered.
Community life and organisations alongside the social economy are a huge source of economic innovation and creativity, rooted and invested in place, they increasingly act as launchpads – fomenting scaleable new local economic ideas, products, services and wealth.
The Government says it has inherited a fiscal black hole. However, the UK's economic sluggishness and tepid growth is in part a product of the last Government's disrespect to local government and a belief that public services were a cost or crowding out private sector.
From a local government perspective, little has changed. There is an absence of common sense, with clunky fiscal orthodoxy, lack of imagination and dangerous short-sightedness to the fixing of the foundations.
Without a pivot to place, much deeper respect and a funding settlement for local councils, the UK Government will not be fixing the foundations, they will be building a house of straw.
Neil McInroy is global lead for community wealth building at USA think-tank, the Democracy Collaborative
