Economic growth: No national renewal without neighbourhood renewal

Securing sustainable economic growth in every region of the UK is the new Labour government’s flagship mission, without which the others cannot be delivered.  In this blog Kyle Vanelli, policy officer at Local Trust, focuses on what economic growth means for England’s doubly disadvantaged neighbourhoods and how national policy can be reimagined to address rather than entrench inequalities at the neighbourhood level

Neighbourhoods are the space where many of life’s outcomes and events unfold – the people we know, how we spend our time, where we go to school, and the opportunities available to us. They are also where inequalities are at their starkest and because of this, neighbourhoods are a critical space for policy intervention.

Why invest in community capacity?

To achieve its ambitions the new government needs to consider the barriers to growth in neighbourhoods – particularly in the doubly disadvantaged neighbourhoods where people live shorter, more difficult lives due to a lack of social infrastructure.

These are the neighbourhoods in greatest need of support to kickstart their local economies and reverse multi-generational problems of low productivity and stagnant incomes that have characterised much of the last two decades.

What this means in reality is investing in community capacity: the after-school programmes that take the burden off parents so they can pursue a career; accessible training opportunities that help people rejoin the labour market; or a local workshop hosting visits from nearby schools and igniting a child’s career aspirations.

‘The total productivity gap between neighbourhoods facing double disadvantage and others is an estimated £124.1billion.”

Building up communities allows them to organise the basic services that keep local economies running: the sports clubs that help people live healthier lives and miss fewer days of work; the health services that prevent people from getting sick; and the local charity that helps a struggling family stay out of debt.

The importance of strong community networks

These community networks are stronger in some neighbourhoods than others, and this has a measurable effect on the outcomes that residents experience.

Compared to the national average, doubly disadvantaged areas experienced up to 50 per cent less growth in output between 1981 and 2018, and residents are twice as likely to receive universal credit. The total productivity gap between neighbourhoods facing this double disadvantage and others is an estimated £124.1billion.

The substantial differences between deprived neighbourhoods with and without good social infrastructure shows that communities are not mere backdrops, but an essential building block for better outcomes. Strong communities are essential to sustainable, long-term growth.

Community networks play a crucial role in spurring on local economies, whether that is a voluntary organisation bidding for grants or residents supporting local businesses. Communities that are well-resourced and connected invest in local needs – they may run training programmes for young people, rejuvenate a derelict building, or fund community enterprises.

Communities are also where we see the social bonds and relationships that contribute to economic growth. This could be a job referral from a friend, or the skills learned from an older coworker.

Strong communities are underpinned by networks of people that connect each other to opportunities, jobs and services, making local economies more dynamic and linking them to wider regional and national economies.

Building a long-term foundation for growth

In this context, growth, or the lack thereof, is an indicator of deeper issues, like the decline of local childcare services, which prevents parents from working, or expensive, infrequent public transport that prevents people from accessing new jobs.

These are the factors that shape people’s potential to work and contribute to the economy. The Big Local programme has demonstrated that although the same barriers can be seen around the country, their complex interaction in different neighbourhoods means that they need to be addressed at the hyperlocal level.

To build a long-term foundation for growth we need to invest in communities’ ability to tackle these issues, starting with those most in need and with the greatest amount of potential to unlock.

That’s why we’re calling on the government to launch a reinvigorated Community Wealth Fund to rebuild the capacity of England’s most disadvantaged neighbourhoods, as well as for central government to coordinate key services and interventions in the neighbourhoods with the greatest need.

Local Trust is launching a series of papers exploring how learning from the Big Local programme can inform the delivery of the new Labour government’s five missions, and where these could have the greatest impact – at the neighbourhood level. These missions span policy across health, economic growth, education, crime, and energy.

Read the second paper on Labour’s mission to ‘Kickstart economic growth’.