We can solve Britain’s regional imbalance
The UK has one of the most regionally imbalanced economy in Europe, says Dr Paul Goldsmith. If we are to solve our regional imbalance we must first improve the partnership between local, regional and national government.
One cannot avoid being disheartened.
Through my NHS work in the North East, both as a coal face clinician and for the Strategic Clinical Networks, I witness first hand every day the human cost of the economic challenges in the area. It gives me insight into the complex, multifactorial drivers of dissatisfaction and failure. Too many failed initiatives, too many areas with deeply ingrained despondency, too much money wasted because health and welfare has to bail out decades of decline and policy failure. Ineffective or non-existent partnership working, lack of coherence between national and regional policy, little absorptive capacity for innovation, and a paralyzed politics.
The UK has the most regionally imbalanced economy in Europe[1]. Wealth and opportunity are concentrated. Left behind areas have remained just that for so long that they have lost hope. Layer that onto increasing political division, and we are a United Kingdom only in name. Soon we may not even be that.
The Prime Minister's 'burning injustices' speech offered hope to many, not least me. Complex, interrelated, multifactorial drivers of regional inequality had been fomenting for decades before finding expression in Brexit and the rise of populism. The inability to subsequently articulate strategies to address the Grand Challenges is now leading to a crisis.
We need to understand that the issues are of both People and Place. There has been decades-long selective intra-UK migration of those who can to more prosperous regions[2]. This has condemned left behind areas to an endless downward spiral and the prosperous areas to additional into-UK migration and overcrowding. Investment then follows geography, welfare follows people and the trap is set.
The UK Treasury's short-sighted cost-benefit evaluations always yield the same answer: the biggest return on any investment, at least in the short to medium term, will come from those areas that are already prosperous. In the UK this means largely the South East. Such investment will then, it is hoped, generate the tax receipts to send welfare cheques to the left-behind areas.
Our broken approach to policy and investment initiatives gives out one clear message: left behind areas are condemned to a life on welfare hopefully fed by the ever more prosperous areas. This is not about people being 'too lazy to work'. It's about corrosive, divisive and fundamentally unjust policy choices that saps people of any hope for their future.
I am one of 'the lucky ones'. I was brought up on Tyneside in the 70s and 80s, then 'escaped' to Cambridge and completed medical training in Oxford. I have built several successful life sciences companies and benefited enormously from the advantages of doing so in the golden triangle. Place and the associated networks of people have been key determinants of my success, not any intrinsic talent.
I have experienced the best and worst of the UK and can see it is possible to end the doom loop. Many things need to happen.
First and foremost, we need cross-cutting approaches: breaking down the silos of central and local government to create effective coordination and collaboration. At the local level, it involves building appropriate skills, structures and culture, as well as mechanisms to develop competent local leadership.
Second, the Treasury needs to abandon the fundamental unfairness of its approach to evaluating investment opportunities. Both social and economic renewal, with appropriate connectivity of key people and rebalancing of the demographic, should be core aims.
Locally available resources, such as universities, need to broaden their focus to become anchors and facilitators of local renewal. They need to be institutions embedded in their locality.
Finally, public sector employees need to be incentivised on the basis of outcomes, cross-cutting cooperation and social renewal, rather than, as now, merely on the level of activity – whether such activity is useful or not.
Such initiatives should aim to reverse the decades long brain drain to the south, so left behind areas can access and retain more people able to drive renewal and lead new business creation. An added benefit would be decreased pressure on housing.
In the 'Voyage of the Beagle' Charles Darwin put it like this: "If the misery of the poor is caused not by the laws of nature but by our institutions, great is our sin". Left behind areas are not left behind because of some laws of nature. They are the direct result of consistent policy failures that need to be called out. Left behind areas have had enough of the grandly titled project initiatives so seductive to politicians, but that more often than not fail.
Local leadership needs to mobilise its local institutions and the local population to be active participants in revitalization. The role of central government is to provide the necessary cross-departmental support for these initiatives, rather than further trying to impose bureaucratised top-down initiatives micro-managed from a distant Whitehall with results that are often disappointing at best.
Left behind areas need not remain so in perpetuity. To do so we need to challenge robustly what has become embedded thinking and break out of decades of failed policy approaches. The time for change is now.
Dr Paul Goldmith is a consultant physician based in Newcastle, a Life Sciences entrepreneur and a Senior Fellow at Radix – the Think Tank for the Radical Centre. His paper, 'The Quadruple Helix: Tackling the Issues of the Left Behind' is published this month by Radix (www.radix.org.uk)
[1] https://ec.europa.eu/eurostat/web/products-datasets/-/tgs00006
[2] http://blogs.lse.ac.uk/politicsandpolicy/britains-spatially-unbalanced-economy/
