“Imagine being asked to chair a big organisation with a multibillion-pound turnover….you find that while you as chairman will be accountable for everything, your chief executive will be accountable for almost nothing, has little management experience, cannot be removed and – in common with the rest of the workforce – will not in fact ultimately work for you at all.”
This is how former ministers Nick Herbert (Conservative ) and John Healey (Labour) launched their new cross-party group, GovernUp, in The Times this morning. Sir Humphrey is failing his brilliant ministers. He’s not experienced enough. The machinery of government doesn’t work. He is setting a prime minister and his ministers at an immediate disadvantage. “Tomorrow’s government will need to be leaner, smarter at commissioning, better organised and more responsive to citizens.” New technology and the machine needs to be fixed. And politicians – ‘The Chairman’- are just the people to do it.
It’s funny because it is almost as if this were a parallel world to the one written about in Ivor Crewe and Anthony King’s The Blunders of Government. I guess Sir Humphrey’s implementation was to blame for the Poll Tax, the Child Support Agency, the failure of public-private partnerships for the tube, Railtrack, and numerous other recent debacles?
Crewe and King see failure in the policy-making process. That Mr Chairman is driven by you. These failures include ‘ministerial hyper-activism’, ‘cultural disconnect’ (ie people respond very differently to new policies than expected), a deficit of deliberation (ie ministers driving forward initiatives without real consultation), a deficit of accountability (those responsible for disasters have gone by the time the disaster is clear), and operational disconnect (those who craft the policy fail to consult those who will actually be putting it into practice).
So GovernUp aims to fix the machine so politicians, who are pretty much responsible all the major blunders that we see, can become more hyper-active, less deliberative, and, in all likelihood, less accountable too.
It’s very convenient for politicians to lay the blame at the feet of Sir Humphrey but it is also a tad too easy. It also happens to miss the point.
What is needed is not a better machine with better drivers, engineering and technology. Actually, there needs to be a complete rethink for how Government works. State economic command was abandoned because it is impossible for Government to see and respond to trillions of pieces of real time data. So it is with public services. There are no people clever enough or technology smart enough to replace the adaptability of direct contact with those who need, use and want public services. It requires constant interaction with people, between institutions, and a capacity for flexible adaptation.
Without a real distribution of power to creative institutions and communities of support then clunky, ill-adapted, systems will remain. We use machine metaphors when describing the state. Instead, there is a need for cultural metaphors. If we were to see the state as an untold number of complex interactions then we might begin to engineer it around people’s real complexity of needs.
Elsewhere today, the Commission on the Future of Health and Social Care in Britain has published its interim report. It demonstrates how the two systems of health and social care, each with a different logic, funding methodology, and entitlement rules, work in friction. It shows how our demand for health and social care is already escalating and will continue to do so. The notion that Government will be able to do anything other than set the basic rules of the game – entitlement, standards, and resourcing – for a combined health and social care system is in the realm of fantasy. These enormous systems will need to be completely reconfigured around the needs of the individual rather than the system. It is about both quality and efficiency of care.
It is through professionals interfacing with individual needs and having the freedom, motivation and power to adapt that we have any chance at all of improving standards and not swamping ourselves with an unfundable burden.
This is the real debate we should be having: how do we create cultures around people that enable them to better meet their needs? Who has more control between Jim Hacker and Sir Humphrey entirely misses the point. It is convenient for ministers of all parties who want to have it slightly easier when it comes to having their way. But as Crewe and King show, that will just lead to even bigger blunders. Instead of GovernUp, how about PowerUp for all those involved in providing public services and those who rely on them? That is how to make the governance of Britain better in the future. It will also make lives better too.
When you see a police officer do you feel safer, or less safe?
This is the half-serious test that the anthropologist and activist Prof. David Graeber uses as a metric of whether somebody has a middleclass ‘mind-set’ or not. It is also a distinction that threatened to expose some social divisions in Brixton, where I live, yesterday.
‘Brixton Unite’ was, depending on which side of this social divide one situates oneself, a community-outreach day coordinated by a coalition of Lambeth Council, the police, and Job Centre plus to ‘reduce the harm caused by gangs’ to the community, or a huge display of force by the Metropolitan Police and British Transport Police to intimidate, harass and inconvenience as many residents as possible.
As I got off the Tube at Brixton station on my way home from work, a man was shouting a warning to everybody as they approached the escalators, ‘Loads of police upstairs! Watch out! Undercover police, filth everywhere!’
Commuters chuckled dismissively over their smartphones, shaking their heads at this noisy man who was making a scene with his paranoid ranting. One man tutted and made eye-contact with me, a white man in office clothes and – so he seemed to think – a natural ally with whom to share his amusement. But my personal experience of the police has not always been pleasant, and as I reached the top of the escalator and saw scores of officers in hi-vis jackets, a man being searched by the ticket machines, black-clad plain clothes police scanning the crowds, and sirens screeching up and down the road outside, I felt uncomfortable at seeing a place that looked under siege.
Outside the station a small group of activists waved placards protesting the heavy police presence, and tried to direct people’s attention to the front page of the Evening Standard, which coincidentally carried new allegations of police misconduct in the Stephen Lawrence case. There were raised voices and mini-clashes as accusations of disrupting or supporting police activity were traded. Elsewhere in Brixton people made their displeasure at seeing such numbers of active police officers known in various ways, as detailed in reports by Channel 4 and Vice online.
For some, Brixton Unite was conceived to intimidate and unsettle people, the latest stage in what they view as a deliberate ‘gentrification’ of Brixton amid a context of rocketing private property rates, evictions, the proposed sale of a community college and an influx of symbolically high-end business such as Champagne & Fromage and Foxtons estate agents. The perspective of those commuters I saw who seemed unconcerned by the police presence – the ‘If you’ve got nothing to hide you’ve got nothing to worry about’ mentality – doesn’t wash with everybody, as the political commentator Stephen Bush (who is black) illustrates vividly:
“When I think of the police, I think of being stopped-and-searched, aged 15, on the Embankment in broad daylight with everyone looking at me, an experience as humiliating as if I had been stripped naked right there on the Strand. That’s the part of me that gets nervous when I see police officers at Highbury and Islington Station of an evening, or quickens my pace around the Palace of Westminster.”
If we take Lambeth Council at their word and accept that Brixton Unite was a well-intentioned attempt to engage with the community and reassure residents that problems with gang violence are being tackled, then the episode demonstrates some of the difficulties faced by public services when they attempt to engage with their communities proactively. Communities, perhaps especially urban communities, are not made up of people who think and experience the same things, as my colleague Jonathan Schifferes blogged yesterday. Some people are reassured by the sight of police officers proactively keeping the peace; others see an invasion of authorities attempting to ruin their day. In a place like Brixton where there is an ongoing debate about gentrification and, for some, a perceived divide between working class long-term residents and well-heeled newcomers attracted by the city transport links and trendy market, then tensions can arise such as those I observed at Brixton underground station yesterday.
‘Relational’ public services that productively engage with communities are difficult to achieve – as recent work by the IPPR has discussed and the RSA’s public services and communities action and research strand continues to explore. Yesterday’s events in Brixton demonstrated this further; the same actions by public services can alienate some and reassure others. It is a conundrum that the authorities in Lambeth will have to work out, but on yesterday’s showing it seems unlikely that the mass appearance of ‘bobbies on the beat’ is really the thing that will see Brixton unite.
After nearly four years of silence on the issue that divided the Blair and Brown governments, Ed Miliband has set out the direction he wants to take Labour on public service reform.
It is a radical one. His Hugo Young lecture marked a departure from both Labour’s statist point of view and its more recent embrace of ‘new public management’. We have already heard about his Theodore Roosevelt inspired anti-trust approach to markets – breaking up large concentrations of uncompetitive market power in banks, energy companies and elsewhere in the economy. Now Miliband has signalled that he wants to take the same approach to breaking up concentrations of power in state institutions.
The language of power to the people is strong and the policy nuggets are good. But this is clearly still a work in progress. Jon Cruddas’ speech went much further in fleshing this out. He was very clear that a future Labour government will not have the money to spend on public services that its predecessors had. And he argued that Labour should drop its institutional conservatism and instead follow the collaborative, small scale, localist and mutualist route mapped out by Michael Young as long ago as 1948; but that is ignored by Labour’s mainstream because it didn’t fit with their Fabian managerialism. Cruddas identified the key features of this power shift as devolution to cities; co-operation as the mode of public service production; and collaboration to achieve whole system change.
Labour should be under no illusion about the size of this task. This is a challenge as big as Clause 4, and in some ways even bigger. With Clause 4 the issue was whether to drop a theoretical commitment to public ownership that the Labour Government had no intention of enacting in practice. Confronting Labour’s institutional statism is different. This is about Labour’s culture and practice, not just its constitution. Centralisation, mass universalism and deliverology have been hard wired into Labour practice for decades.
If Labour is to build on the promising start that Miliband and Cruddas have made, then further substantial work will be needed in three related areas: the reform narrative; the theory of change that will need to underpin this; and the policy mechanisms that can enable people power.
The narrative for reform needs to be more compelling in two respects. First, Labour needs to be crystal clear about the fiscal and demand pressures facing public services. Politicians cannot promise to spend more or deliver new solutions – instead they have to be open and honest with voters about the need for a new social settlement, in which citizens and the state will have to share responsibility for generating the social productivity that can tackle loneliness, provide better social care and improve public health and wellbeing. But as importantly, this narrative needs to be rooted in modern times. This is not about harking back to a sepia tinted Britain of social solidarity and sacrifice. It is a recognition that the new social, economic and technological forces driving change in society all pull in the opposite direction to centralisation and mass standardisation. A new global picture is taking shape in which urbanisation, city led growth and local innovation are the dominant characteristics. Horizontal organisations, small firms and social networks are increasingly what define our work and social relationships. And vertical, bureaucratic organisations are struggling to keep pace with this.
Labour will also have to develop a credible theory of change. Merely stating an intention to decentralise power and to invest in the networks and new social institutions that could collaboratively produce public services is not enough. There needs to be an appreciation of the barriers that stand in the way of this, and of how systemic a change this would be. Everything mitigates against change of this type, from the form and culture of Whitehall spending departments, to the Treasury frameworks for revenue, growth and risk. A strategy for change would have to be based on reforming central government, changing Treasury spending frameworks, opening up policy making and pursuing devolution to city regions as an economic and fiscal priority.
At the same time, Labour will need to develop new policy mechanisms to enable its power shift. For example, shifting the focus to prevention will require re-profiling expenditure. The Scottish and Welsh Governments have both taken some steps in this direction. But a future Labour government would have to go further. This is partly about longer term funding settlements, but it is also about creating an investment and business case for demand management. And for city devolution, it may have to look at different models for sharing risk between central government and cities that are more akin to PFI deals than the tame substance of the Coalition’s City deals process.
Miliband’s new public service approach is very welcome. But the real test will be in how much Labour recognises that it will need to work with social networks, local government and civil society organisations to open up government and deliver this power shift to people and places.
RSA, chair of public services
Last week in Greater Manchester, the City Growth Commission welcomed a dozen individuals from academia, businesses and local authorities to publicly share their thoughts on the role of cities in stimulating economic growth. On the heels of the Commission’s first report, Metro Growth: The UK’s Economic Opportunity, the Commission is seeking to identify the main factors limiting cities’ growth and the policy levers needed to maximise growth potential.
Those providing evidence were incredibly forthcoming in their analysis of what was holding cities back, but also optimistic about the ability of cities to overcome these barriers in future. The consensus in the room was that while there may be specific issues with skills, connectivity, and housing for example, problems in these areas continue to persist because ‘one-size-fits-all’ policies are rolled out across the nation to address differing needs locally. Autonomy at a local level is denied because, as Lewis Atter (who leads on Infrastructure Strategy at KPMG) explained, “Central government doesn’t have a view at all on local growth. There is only a cost side, scorecard and resource capture. There is no sense of how interventions contribute incrementally to national growth.” For instance, cities would be better equipped to raise qualification levels and tackle worklessness if they could oversee skills provision, which is a prospect the Commission will be exploring in our next report.
Where efforts have been made to decentralise power, government should still be cautious about claiming success. Eammon Boylan, Chief Executive of Stockport Council, warned that there is danger in seeing combined authorities and elected mayors as a panacea. What may work for one city is not necessarily right for another, a point which also clearly emerged from a retrospective of the past 30 years of attempts to devolve power to the UK. The Institute of Government categorised the success of combined authorities and elected mayors as ‘mixed’, concluding that the limited adoption of such evolutionary or ‘opt-in’ models of reform signals that the shift in power has yet to be embedded.
It’s not that Whitehall is oblivious to calls for decentralisation. When Lord Heseltine proposed devolution of funding from central government to Local Enterprise Partnerships (LEPs) in 2012, heads in government were quick to nod along in harmony, although hands unfortunately didn’t loosen up on the purse strings of the Treasury – fiscal devolution creates anxiety at the centre. Drawing on her experience from local government, Lorna Fitzsimons of The Alliance Project and former MP of Rochdale, explained to the Commission that while central and local government may agree on the outcomes they want to achieve and roles they each play, but the centre often has difficulty letting go. The Treasury in particular needs to feel that the risk of relinquishing control is minimal, which is why phases or pilots should be seriously considered as devolution is pursued.
The feeling in the room was that in spite of previous setbacks, devolution of political power to the local level is inevitable. Sir Richard Leese, leader of Manchester City Council, highlighted the recent lecture given by Ed Miliband, committing to a reimagining of public services which aims to put power back in the hands of people and their local government. Leese felt that Miliband made it clear that politicians had not only been listening to arguments in favour of devolution, but are now ready to respond in a meaningful way. If the next election hinges on who can be the most radical on this front devolution will certainly be back on the table. The most pressing question is how powers should be best distributed at different scales. In making the rhetoric a reality, the economic outlook for cities will improve as cities are allowed new freedoms to pursue their growth agendas.
Today marks the launch of the first output of the City Growth Commission, featured on www.citygrowthcommission.com. Building on feedback from our launch event at the RSA in October 2013, the report takes on a striking infographic-led template to deliver the message.
We argue that the UK’s opportunity for strong economic growth – which addresses wider long-term challenges – requires strengthening our urban system. Our scale of analysis starts with looking to the 15 areas with the largest population, which we term ‘metros’. The Commission will consider the potential of UK cities large and small.
In Metro Growth: the UK’s economic opportunity, we argue that a new global picture of growth is taking shape. This is not about a transfer of economic power from North to South, or West to East. It is about the rise of cities.
The UK is home to one of the world’s truly global cities. But too many of our urban areas outside London are failing to achieve their growth potential. We will explore what political powers and governance arrangements are needed to deliver this; and how public service reform can improve fiscally sustainability in all UK cities. The report highlights that public spending Greater Manchester exceeds tax take by £4–5bn – equal to roughly £2,000 per person per year, yet metros have little power to change this: over 90% of all tax is collected by central government.
Led by renowned economist Jim O’Neill, the City Growth Commission will argue that UK cities have the potential to foster higher, more sustainable productivity, growth and living standards. Metro Growth sets the scene for the Commission’s work. It explains why ‘metros’ not only drive most of our economic activity, but shape how nearly all of us live and work. Cities, and their economic success, matter to us all.
The data tells us that we need a sophisticated understanding of the dynamics of population. For example, while both Manchester and Liverpool grew over the last decade, Manchester added 11,000 young people (under 15) while Liverpool lost 9,000 young people.
Focussing on skills, infrastructure and devolution of fiscal and policy-making powers, Metro Growth makes an early exploration into some of the factors currently limiting UK cities’ growth. The report found that:
Skills are consistently identified by businesses as a big barrier to growth. Whilst universities play an important role in developing skills and clustering talented people, graduate retention and attraction strategies are relatively unexplored aspect of economic development.
Although many UK cities are close in distance, weak infrastructure links between regions mean that potential economic relationships are under-developed. Despite the 22,000 commuters that cross the Pennines every day between the largest metros of Yorkshire and the North West, the economic relationships between Manchester and Leeds are less strong than might be expected for cities of their size.
There remain large differences between metros in qualifications. South Sussex Metro (Brighton, Hove, Worthing, Littlehampton and Shoreham – combined population of half a million residents) was found to have 23 residents who are university graduates for every 10 who have no qualifications. By contrast, the Potteries Metro is home to 22 residents with no qualifications for every 10 university graduates.
Metro Growth concludes by looking at the wider conditions in which people are able to contribute economically. The social context matters – for example health and well-being varies greatly between and within metros. Having people will low mental well-being, and poor physical health, limits the opportunities for productive participation in the economy.
As we develop more in-depth research over the next eight months, important areas of investigation remain for the City Growth Commission. Most fundamentally, how can we ensure that the case for metro growth is connected to salient issues for citizens – how to improve living standards – and for government – how to reform public services in light of long-term challenges.
The City Growth Commission runs for 12 months and will seek to influence all political parties in the run up to the next General Election, and make the case for cities to take a new role in our political economy. Following an open call for evidence which ran from October 2013 to January 2014, the Commission will host its first evidence hearing on Tuesday 11 February in Manchester Town Hall.
This is a guest blog from RSA Catalyst supported West Midlands Fellow John Blewitt. He reflects on the impact of Catalyst and the new Library of Birmingham on his work to connect spaces and people with democratic actions.
Over the last couple of years I have been working closely with the library service in
Birmingham and Worcester and have been fortunate to have become a Library of Birmingham ‘Face’. The Library of Birmingham is a prestigious public project at the heart of the city centre aiming to animate the city socially, economically and politically. Architecturally engaging and ‘iconic’ in the true sense of the word, it is most importantly a major investment and commitment to the public sphere and citizens’ right to the city.
Libraries need to become event spaces for democracy, culture and learning
Public expenditure cuts have led to the closure of many libraries in the UK but these financial pressures have also coincided with a need to completely rethink the nature of public libraries as a public space and place. Mobile digital technologies, tablets and smart phones, the Internet, e-books, Twitter, Facebook and the like are shifting the way we socialize, communicate, access information and learn about the world around us. They offer us all sorts of amazing new opportunities unimaginable only a few years ago, but there are problems.
Some of those problems are well known – lack of skills or access and perhaps a growing passivity that comes with the ease of clicking here to buy, to vote or to think, or watch the aftermath of a hurricane or Strictly Come Dancing. The term ‘clictivism’ has now entered our language. In some ways, of course, it was ever thus and I’m sure there were analog equivalents.
What is really worrying is the sense that civil society needs reactivating. It needs to be given a life that is not completely composed of 0111001001111 and commodified entertainments. There has been a great deal of talk about the need for increased literacy and numeracy, social engagement in volunteering, and a more responsive political democracy and a less disaffected citizenry. The Big Society has come and gone as has the Occupy movement, the flurry of student protests over £9000 per annum fees and the urban riots that targeted mobile phone and fashionable shops.
Public libraries, a space for active debate?
We no longer seem to have spaces and places where we can come together physically, openly and freely to discuss issues and events that are in essence political. Democracy needs an informed citizenry. It needs public spaces and places that are connected to other spaces and to people as citizens who want to learn and discuss issues that are not filtered and framed by News Corporation, Google, or Jeremy Paxman. Public libraries are such places. In fact, they are one of very few public spaces and places left in our increasingly commodified and privatized world where this can occur.
Democracy needs an informed citizenry
I recently used the wonderful Library of Birmingham to run two public events supported by the RSA Fellowship and Aston University. The first was focused on the concept of resilience – a term used with increasing frequency in business, sustainable development, society, urban government and education. How the term resilience is being used was the topic of a book I recently wrote with Daniella Tilbury, which served as the basis of a genuinely interesting discussion on what we humans want to do with our future. People from business, education, charities and from the city came together on the evening of Halloween to deliberate, think and learn. It was a public event, in a public place and it was free. You can get an idea of what was discussed at the event here.
Two weeks later I ran and chaired a larger event held in the Studio Theatre at the Library of Birmingham. The topic was the future of our public services in an era of austerity and ecological limits to economic growth. The Green House Think Tank presented its views as expressed in Smaller but Better? Post Growth Public Services, and a panel consisting of Matthew Taylor (CEO, RSA), Heather Wakefield (Unison), Cllr Stewart Stacey (Birmingham City Council) and Josie Kelly (Aston University) responded energetically. However, it was the questions and comments coming from the audience that produced the most interesting and thoughtful contributions of the evening. The event lasted two hours but could have easily gone beyond. As I was preparing to leave the reasons became for this became obvious. Some departing audience members said to me, “why don’t we have discussions like this more often?”, “what are you putting on next?”, “you don’t get this on the TV” and, from one of the theatre’s A/V technicians, “that was really interesting – most things are so boring”.
Given the opportunity, the experience, the place and space for democratic discussion many people do and will engage with enthusiasm, commitment and intelligence. Far from being disaffected I believe there is actually a hunger for public spaces where public democracy can be enacted. And, public libraries offer such spaces because they are trusted, respected, neutral and, most importantly, PUBLIC. But to prosper in our consumerist digital age they need to remain public, remain relevant and remain committed to public education and public democracy. They need to become event spaces for democracy, culture and learning
As an RSA Catalyst Award winner I am concerned to connect these trusted spaces and places to a range of activities that will help engage people as citizens rather than as consumers, as active learners and as creators and producers of a vibrant civic public sphere. Public libraries are an important but threatened element of our public sphere. My Catalyst project titled Connecting Spaces and Places, recognises the very important physical spaces libraries offer can be complemented by digital technologies but cannot be replaced by them. Thus, public libraries are becoming culturally open ‘event spaces’ and they need to be promoted and used as such if they are to survive as democratic spaces.
The Library of Birmingham has a space, ‘Brainbox’, on the first floor which could conceivably be used for any creative and innovative activity. What it will be used for will be determined by the people using it. No predetermined plan, no strategy, no prescriptions but genuine innovation and free exploration. The RSA funding I received has enabled me to practically encourage people to use and view library spaces in ways they would not previously have done. It has attempted to make real that global call to make real our right to the city.
OK, my two recent events involved talking but talking is doing too as we must all talk democracy to make democracy happen. I intend to initiate other library based events, activities and hopefully exhibitions in the near future. If you want to join me and continue this debate please get in touch via email.
The economic geography of the 21st Century is different from the last. We are at the dawn of an age of unprecedented global connectivity driven by technology. The channels of economic growth and participation this century provide a virtually bypass to the world’s traditional hubs, entrepots and gateways. Bangalore – a sleepy university town 20 years ago – is now India’s booming IT capital. German factories hum in Poznan and in Puebla, and as Bruce Katz highlights, the US is experiencing a metropolitan revolution, as small and medium post-industrial cities capitalise on their rich inheritance.
Globally, “small middleweight” cities – those with 200,000 to 2 million residents – are home to 7% of the world’s population, but McKinsey estimates they will generate 19% of global GDP growth to 2025. The UK, as the seventh largest global economy, must act now to realise the potential of its cities: the ONS defines 32 urban areas in England with populations over 200,000. Despite decades of urban regeneration initiatives from civic and business leaders, only London currently makes a net contribution to the Treasury. In the last 15 years, no cities outside London have grown their proportion of national Gross Value Added.
The neglect in developing a national urban growth strategy by national government must be in part due to the complacency that Westminster feels, comfortably astride the prosperity flowing up the Thames. This wealth doesn’t provide sufficient irrigation for business and industry nationwide. Our river of capital streams into non-productive investment in housing and consumption, led by southerners borrowing to fund both. Will Hutton made this plain in 1995: Britain needs to invest more in its future. Since then the ONS has warned that investment, as a proportion of the economy, has fallen to its lowest level since the 1950s, and 30% lower than the G7 average.
As Mariana Mazzucato has recently highlighted, the wider supporting environment for growth is influenced heavily by government. No entrepreneur is an island. Cities need autonomy in regulating and taxing business, and in supporting a skilled and fluid labour market. This reform is needed at a time when local authorities are hugely challenged. They must redefine public services in an era of constrained spending and increasing demand for health and social care. Public services must be fundamentally transformed to support people to thrive in 21st Century cities, matching contemporary social geography. This isn’t a competing agenda to the challenges of stimulating productive economic activity – it is fundamental, complementary and necessary.
Over 15 million people live in England’s 15 largest metropolitan city-regions outside London. If they are to lead socially productive and fulfilling lives, investment must be attracted and enterprise must flourish, providing jobs that pay sufficiently to raise living standards. Growth needs to deliver for all who propel it, and adapt to the increasingly apparent environmental limits.
The potential for people to work, to learn, to find funders and collaborators, will only be realised at scale in cities. Cities offer critical mass: providing enterprises the breadth of markets – labour markets and consumer markets – to grow. Currently, getting people back to work is not delivering growth because worker productivity is stagnant; we have returned to pre-2008 levels of numbers of people employed and number of hours worked, but not of GDP. If we are to address labour market challenges, this must mindful of the scale at which these markets operate.
A London growth strategy for the UK will not suffice. We must develop a network of cities to serve as centres of productivity, home to businesses which power the UK on the world stage. We face a delicate balance between capitalising on agglomeration effects and concentrating economic power, and providing assistance to people and areas currently less competitive – potentially undermining that power.
Last week, the RSA launched the City Growth Commission – chaired by Jim O’Neill, outgoing chair of Goldman Sachs Asset Management – to develop a comprehensive roadmap to deliver a programme of change. Recently the Heseltine Review, the City Deals, and the London Finance Commission have suggested an array of levers that could alter the relationship between our national government and our cities, and the current RSA Journal brings together several innovating voices on the power of cities. There is a growing consensus that cities represent the best scale at which prioritise investments and redesign the political economy, thus unleashing the potential of the innovators, social entrepreneurs and active citizens to pull the UK through its current challenges.
A century ago, municipal government in the UK was among the most progressive and ambitious in the world, pro-actively investing in the transport infrastructure and human capital to fuel an industrial economy. The next national government of this country must empower urban authorities and urban residents to join the global momentum of city-led growth for economic, social and environmental benefit.
This is a guest blog by Mark Power FRSA. Mark is an architect and a member of the Fellows Artists Network.
As I recently discovered at this summer’s RSA Reboot event-Re:Engage, creativity is in plentiful supply within the London Fellowship network. The event focused on how Fellows could use the 4 ways to engage model to find and support each other in their work. It also featured a lightening talk by a member of the cross-disciplinary Fellows Artists Group which myself and a group of other Fellows have set up. Our members range from film-makers to sculptors, architects to writers and we meet seasonally and informally to visit exhibitions, discuss artists, discuss each other’s work and discuss ourselves and what makes us tick. We also encourage creative ways of recording our responses to the Reboot events, such as this stop-motion video which shows the buzz surrounding new connections being made.
Reboot events are organised by the London Region Fellowship Councillor, and are an excellent platform for getting to know other Fellows; getting to know what they do, what they believe in and getting them tipsy on whatever they bring along. However, running parallel to this social exchange, as RSA Fellows we have a more urgent and vital agenda: to engage in the current debate on public funding and support for the Arts, a debate which so often excludes the artists themselves and tends to emphasise instrumental over intrinsic value. We pursue this in various ways, the London Region has supported a range of events including a debate at the ICA a and a celebration of the 160th Anniversary of the Royal Photographic Society, founded at a meeting held at John Adam Street in 1853.
For me, as a member of the Group and architect running my own practice I am interested in the tension between instrumental and intrinsic intents that makes architecture what it is. At the first FRSA Reboot event I showcased our design for the Jubiloo, a marvellous new public convenience temporarily moored on the historic Thames riverbank, 100m from the London Eye; a dramatic image for a dramatic setting.
As a result, I was able to invite a group of RSA Fellows to experience the Jubiloo, which according to Mary from Manchester was ‘the best toilet I’ve been in’. Fellows heard about the rich historical allusions embodied in the floating barge-like image of the pavilion, admired its flush detailing (automatic of course), whilst also learning of its capacity to turn rainwater into greywater. Although the project was funded by a private company who built and now operates the facility, public funds were contributed by Lambeth as part of its efforts toward landscaping and integration in the public realm. The Jubiloo serves as an amenity for the Jubilee gardens and Queen’s walk, both of which are part of the ‘continuous foyer’ of London’s South Bank, hence the public contribution could be justified on instrumental grounds. The formal and material allusions integral to the design which give the building its intrinsic cultural value interestingly, were paid for by the operating company who felt they would attract more people to use the toilets.
Responses to the Jubiloo have been both instrumental and intrinsic; at the launch, the South Bank Community Choir sang “Up, up and away in my beautiful Jubiloo”. In Summer 2012 a specially convened Jubiloo Shakespeare Company performed Act II Scene 2 Antony & Cleopatra “The barge she sat in, like . . .” remembering the Bard’s sighting of Elizabeth I in her golden vessel on this stretch of the Thames.
Looking back at the activities of the last year, I can truly say that the partnership between the RSA London Region and the Fellows Artists’ Network has given me some highly sought-after opportunities to meet and exchange ideas and experiences with other Fellows. I am looking forward to continuing the conversations with Fellows from around the world in our new Artists Group on the RSA social network and seeing what events we can come up with for the London Region Autumn programme.
As the sharing economy is booming (Part 1 – Sharing our way to prosperity), its millions of participants now face a choice. There are ways of swapping and collaborating for free, and there are also ways of commercialising idling capacity.
In reality, many of the most successful sharing economy platforms are simply commercial platforms with a personal touch. eBay works because buyers and sellers leave feedback for one another; enough to grease the wheels on $175bn of transactions in 2012. In an era of self-checkout supermarkets, it’s ironic that it is through internet applications we’ve reawakened to the fact that business can be personable and customised. Airbnb now call themselves a “community marketplace”. Etsy is an online shop for $1bn of products sold direct by artists and craft-workers who make them. Every sharing platform seems to have spawned a commercial sharing platform: eatwithalocal might be devoured by eatwith and Google Hangouts (video chats) looks set to expand to Google Helpouts where people buy and sell services via video link.
Should we commercialise sharing? In working with Benoit Passot investigating the logic of impact investments, I became convinced that we all place values on achieving financial returns and social outcomes, but those values vary. What we need are opportunities to discover what our values are. Technology makes it easier for us to join timebanks, and easier for us to make a living selling our skills. When money is involved, obviously, these values are made explicit. There are platforms which will enshrine free sharing as principle and policy, and there will, simultaneously, be ever more sophisticated commercial platforms – with a social dimension – making up an ever greater proportion of economic activity. In other words there is sharing, and there is the economy. We will vote with our feet and vote with our money.
Commercial sharing platforms can’t be fully inclusive if some potential participants are excluded by a lack of money, but commercialising traditionally non-monetary assets such as spare bedrooms could support someone to pursue other socially productive activities in a volunteering or caring capacity. We know sharing gives us a feeling of solidarity and identification, more than selling and buying, and can (re)build social capital in a way that traditional market transactions can’t.
Does this mean money contaminates exchange relationships? Not always. People form meaningful relationships with their bosses, and the people they manage. Shopkeepers befriend their customers, consultants get chummy with clients. In each case, physical interaction and proximity usually matter. Money-free sharing platforms are probably best realised at the local scale. There is stronger potential for ongoing reciprocity in dense urban areas. Money, as it has always has been, becomes a unit of trust which can reduce the friction of distance. Whether free or commercial, the promise of the sharing economy is about the alignment of self-interest and common good; at distance, the ability we have for realising common good together diminishes, and money is more helpful as a proxy for trust.
However, there is a fundamental challenge to achieving collective and inclusive “common good” if the sharing economy continues to grow: non-monetary activity doesn’t register as GDP.
The more we try to gain economic and environmental efficiency through generating activity outside of – or reclaiming activity from – the market, the more we stifle the monetary economy. While we already know GDP is an insufficient measure of progress – as Rachel Botsman says we need to measure the number of holes drilled not the number of drills sold – our primary system for realising life opportunities is built on it. One of the buzzwords of tech recently has been disruption. In this regard, the sharing economy is highly disruptive.
As a society, we tax consumption, employment, income and profit. More money on the books and circulating in the economy – i.e. rising GDP – generates more tax revenue. Tax then gets spent on government services, further contributing to GDP. Government, therefore, has an implicit incentive to both formalise the informal economy, support recorded and taxable economic activity, and bring online commercial platforms, and their users, into the tax regime. Government in fact represents the ultimate level of sharing: we are practicing collaborative consumption through societal organisation of public services.
As Caron Suchecki says, “paying tax is participating in a sharing economy, dodging it is not.”
Public services in 2020 need to look a lot different – in their structure, relationships, delivery and funding – and they have a long way to go. There is a lot to learn from the sharing economy in unleashing idling capacity. But collaborative consumption doesn’t work in every context: a recent report found that it is difficult to reconcile the need for personalised care and support packages with the economic advantages of collective purchasing power: “service providers and commissioners can’t impose collective approaches or assign people to groups that don’t matter to them”.
We therefore face competing quandaries. On the one hand, the more we rely on each other in non-monetary ways through systems of mutual aid and support, turbo-charged by new innovations, the more we withdraw from the circulating flow of money which ultimately funds public services: our democratically-controlled, societal support network. (The prevalence of the informal and undeclared peer-to-peer economy may already be undermining public institution-building in the developing world.)
On the other hand our GDP treadmill is increasingly frustrating: its failing to improve well-being in rich countries. The cost of our basic requirements – for example housing, food and childcare – are increasing faster than wages for most people. Many work all day to make enough money to pay someone else to work all day looking after children, elderly parents, or others needing care, and the primary destination for our tax money is to subsidise low wages and provide health, education and social care.
In conclusion, the expansion of economic activity in its current form is eroding our time, quality of life and environment. The sharing economy has some promise to challenge this by making better use of existing assets – through monetary and non-monetary sharing. But unless GDP is uncoupled from the funding and delivery of the public services, and environmental resrouces are valued properly, simultaneous efforts to personalise public services, stimulate economic growth and expand the non-monetary sharing economy risk undermining one another and stifling the realisation of our collective aspirations.
Yesterday Detroit became the largest US city ever to file for bankruptcy. The fate of public services for 700,000 residents is uncertain. The statistics we’ve read are horrific: the average police response time is 53 minutes, the city has shut half its parks since 2008, 38% of revenues went to servicing debt last year and 47% of properties didn’t pay their property tax bill. But as Neil McInroy wrote, “feeling the pain is not enough. We need also a thorough analysis of the economic and socio-political forces which cause it.”
In recent years Detroit has led the dubious club of shrinking cities providing post-industrial ruin porn. The images of decay are mesmerising: promising a futuristic glimpse of what a city looks like when capitalism and government fail together. Most accounts assume Detroit’s problems stem from severe de-industrialisation. This is entirely insufficient. The root cause of this is administrative geography: growing suburban wealth has mirrored urban decline. American political geography and property-based tax collection colludes against Detroit: local authorities rely heavily on local property taxes, which are dependent on property values. The rich have literally bought into relatively small well-funded local administrations on the outskirts (see map below). Across the US, such enclaves can protected through “exclusionary zoning”, preventing low-income residents through ordnances which require minimum housing sizes and limits on land use density.
Let’s recap the story but ensure our geographical lens zooms out. Detroit was once metonym for the American car industry (“Motown”). Detroit attracted economic migrants rapidly between 1900 and 1930, including many African-Americans from southern states. Like other American cities, Detroit’s suburbs grew rapidly after World War Two, and mass ownership of cars made that possible. By 1956 the last streetcar line in a 500 mile networks was ripped up and Detroit pioneered the construction of motorways which carved through dense urban neighbourhoods. Those with jobs followed the relocation of companies to the suburbs. Many poor black people were left behind. Social challenges and physical decline have a long and painful history: the Army was deployed in riots which killed 43 in 1967. 80,000 people left the city in 1968.
But in the Metro Detroit region today – the city including its suburbs and exurbs – lives 5.2 million residents spread over 6,000 square miles. The car industry is not dead, and is recovering from its 2009 bailout and still employs 130,000. Half a million people still work in manufacturing in the state of Michigan; many of these jobs are unionised, paying wages typically 75% above the state average. Other sectors are growing around Detroit – science, technology and finance – while one of America’s top universities sits 40 miles west of Detroit. Some companies have recently chosen to consolidate their offices in the city centre, but city residents have remained poor through the decades.
Metro Detroit highlights is the inability of America’s economy, government and social infrastructure to offer social-economic mobility. In the country where people believe most frequently that personal determination can overcome disadvantage, the poor more often than not remain poor through generations. They receive poor public services because their local government is poor. Incomes have stagnated as productivity growth hasn’t been distributed to workers through wages: the minimum wage is far below historical precedent.
Regional inequality is the crucial context for Detroit’s bankruptcy. In short, as the economic geography of Metro Detroit evolved, the geographical administration of government did not evolve with it. The localised nature of the tax base meant the city became stuck in a downward spiral.
One of the negative feedback loops in racialised poverty is the education system. Arguing that education policy and racism in the housing market conspired to segregate the region’s children by race and class, the NAACP won a legal case in 1971 forcing Detroit to form plans with it 53 metropolitan school districts to integrate student. In 1974, the Supreme Court overturned this on appeal by the State and suburban districts.
The physical environment has been blighted with abandoned buildings and subject to mass arson on Halloween: depressing the property market and further depressing Detroit city government tax revenue. Declining prices (50% between 2005 and 2011) mean residents complain their property is overvalued by tax officials and refuse to pay their taxes. The city witnesses a race between blight-fighting bulldozers performing urban excision and investors who seek to land-bank them for as little as $500.
The only big effort in the US to proactively pool tax revenues locally are the seven counties around Minnesota’s Twin Cities. Even here redistribution is limited to 40% of growth in commercial and industrial tax revenue, not residential property tax. There is a precedent for cities in the US to annex nearby land and expand, but state government must consent. Phoenix has doubled in territorial size since 1970, allowing a broader tax base and for the city to profit from rising land values on its rural outskirts. Generally, its been politically impossible to force affluent suburbanites to share tax revenue and expenditure decisions through joint metropolitan government which includes poorer neighbours in the inner city.
Political administrative geography matters greatly in economic development, financial management and social integration. In the UK local authorities are experimenting with cross-borough arrangements and policy and investment based on “functional economic areas”, while new unitary authority status creates challenges and opportunities. The bankruptcy of Detroit calls into question the scales to which our psychological associations extend. Detroit remains the heart of a dynamic city-region. It seems unlikely that lawyers and administrators will be able to draw on that wider wealth in the resuscitation efforts.