As the UK emerges from its roadmap out of lockdown, it is time explore what ‘Building Back Better’ actually means. Is this just a political phrase that has caught media attention, or can rebuilding change our past economic approaches and result in lower carbon, greater social value, investment in skills and more effective economic delivery mechanisms? This is the focus of the IED’s online conference this week.
So what does this mean to me? Firstly, I think it is a vision that has a sharp and clear focus on two or three absolute priorities and needs, accompanied by a long-term commitment to sufficient funding to really target and turn the dial on inequality. Spreading funds across too many areas too thinly is not going to achieve structural economic changes that are essential if we are serious about not leaving anyone behind.
Sadly my personal view is the outlook is gloomy, and it is getting gloomier. We are one of the most unequal economies in the developed world and it is far more complex than London and the South East v the rest: intra-regional inequalities are frequently as stark. The levels of UK inequality are high and increasing on almost every measure, be that child poverty, housing, education, mobility, health, wealth and productivity.
A third of our citizens live in the 10% most deprived places, where nearly one in four people suffer with a long-term illness, life expectancy on average is 16 years less than those in richer areas, and over a third have no formal qualifications. The proportion of GDP we spend on state education is exceeded by every country apart from Chile. 4.1 million children live in families earning less than 60% of UK median income (£16,380 per annum), yet two thirds of them are in working families. In Blackpool, one in 50 children is cared for by the state.
We know the Shared Prosperity Fund is coming in 2022, but in the meantime we have the UK Community Renewal Fund. I welcome the focus on place, and admire the narrative about unleashing potential and instilling pride, to which I would have added increasing ambition and providing hope and self-belief, especially for young people – we have to help them escape from expectation poverty.
However, I suspect that given the six-month delivery timeframe, the reality is that a lot of the £220m will simply be given out as grants in order to get the money out of the door. The community renewal fund is just the latest in a plethora of funds and bidding for these various pots of money, then managing and monitoring them if successful, puts an enormous additional strain on hugely stretched local resources and capacity. Short-term thinking and planning for levelling up has to be replaced by a single financial commitment and focus that spans generations.
For me, when thinking about Building Back Better, there are three specific issues that are especially close to my heart which need tackling.
The first is the future of town centres, a challenge that is abundantly clear in all the towns and cities we live in. We cannot rely on a future where people need to go into our towns and cities, we need to create a want for them to go in, and this is at the heart of the challenge for professionals with responsibility for placemaking and placeshaping going forward. High street shops are closing, and the pandemic has accelerated trends around online consumption and digital transformation in businesses.
However, we have an opportunity to shape how we want the economy to change, especially in respect of the environmental and social challenges we face. Green technologies have a crucial role to play, and from a central and local government perspective, the commitments around climate change are a powerful lever to shape markets that facilitate this positive change to a more sustainable economy. Reconciling net zero goals with levelling up and economic growth is a key challenge for us all, and especially how this all plays out in our town centres and wider communities. It is a complex set of issues to which, particularly at local level, we should all have the opportunity and willingness to contribute.
The second issue is social value. I believe that social value (across all industries and sectors), and climate change/environmental issues, should be embedded as priorities within Building Back Better. Our own report ‘From the Ground Up – Improving the Delivery of Social Value in Construction’, found there is much work to be done in an industry which is central to placemaking, economic development and UK employment. With the construction sector spend estimated to be £500bn by the end of this decade, there is both a massive opportunity and a clear responsibility on buyers and suppliers to deliver tangible social impact and outcomes, especially for our disadvantaged and left-behind communities.
We made five recommendations to enable a step change in social value procurement, delivery and most importantly, achieve more tangible impact. The significant interest in our research and findings continues to provide the momentum to achieve the most important, the establishment of a Centre of Excellence initially for construction, and then as a lighthouse of learning for other sectors to benefit from.
The third issue close to my heart is the importance of tailored, quality support for businesses. Put simply, who else is going to create the jobs and apprenticeships for the millions of unemployed people we are going to have? This is not just about start-ups or scale-ups, but about our 5.8 million SMEs as a whole, the lifeblood of our economy. It is about improving our dismal business start-up survival rate, increasing resilience, unlocking and accelerating the growth potential in our ambitious businesses, encouraging and upskilling the less ambitious, and improving our poor productivity performance where we are 15% behind the G7 average. Both the challenges and the solutions are so well known.
Future policy frameworks around Building Back Better must incorporate these three issues that I have emphasised and other examples of what works at place and community level. The approach also requires high levels of local leadership, collaboration, accountability and transparency, a willingness to take some risk and be innovative, and appropriate long-term funding and ceding of control by central government.
I would also encourage us all to consider how supporting Building Back Better reflects a final critical point: putting inclusive growth at the heart of all public investment. We need to ensure that public spend leverages the maximum social, economic and financial return on investment for businesses, for communities and for individuals, and makes a measurable positive difference in tackling our inequalities. This is about improving outcomes by increasing access to, and uptake of, opportunities, removing all barriers to participation, and moving the dial.
It is about making better efforts to include the excluded – a bottom up and top down approach is needed to build local legitimacy. Without involving those who currently have no voice, how can you understand their needs and experiences, and ensure they are taken into account? Inclusivity has to be mainstreamed, it is not a fringe activity. The left-behind are not ‘hard to reach’ – go where they go, and you will find them. And we all need to step up to the plate and do our part, as individual citizens, as employees and employers. This is a requirement of understanding, and delivering, Building Back Better.
Bev Hurley CBE is chair of the Institute of Economic Development (IED)
This article was written ahead of the IED’s Understanding Building Back Better online conference on 25-26th May. Click here for more details.
