Complexity or resilience?

In the Times, Ed Conway (right), economics editor of Sky News, describes problems arising from the complexity of ‘the hallmark of 21st-century life’ and the International Alliance for Localization records examples of new modes of development and progress.

Conway writes about the vast supply chains, financial instruments and legal structures ‘sitting beneath every industry’:

  • Where once a company made its products in one country, these days most sophisticated goods are the product of many hundreds of contractors from around the world, eventually assembled into one unit and quickly shipped to your door.
  • Where once a bank manager would know to whom he lent money, these days debts can be packaged and repackaged so many times that the link between borrower and lender is effectively lost.
  • Financial globalisation — the ability to move money seamlessly from country to country leaves countries even more vulnerable to banking crises.
  • And in much the same way as companies outsource non-core production and services, the public sector delegates responsibilities to private operators.
  • By replacing tightly knit relationships with impersonal complex structures we lost something — consider the 2008 financial crisis,

The complexity of the regulatory system played a part in the Grenfell Tower disaster tragedy. Not only were regulations extensive yet oddly vague — allowing builders to use various loopholes — they were not even checked by government officials. These days contractors in England can instead hire “approved inspectors”, private outfits which provide a bit of advice and tick the appropriate boxes.

Globalisation, once a means of boosting everyone’s income, has instead evolved into an excellent vehicle to help the rich get richer.

The International Alliance for Localization sees that the building of more resilient economies will require a rethinking of the financial system, and its Planet Local series has been turning the spotlight on some inspiring examples of ethical banking:

* In Maine, USA, a local resident with money to invest  is providing nearby small farmers with loans whose interest is paid exclusively in the form of farm products.

* Brazil’s Banco Palmas, governed and managed by residents of the impoverished Palmeiras neighborhood in the city of Fortaleza, has issued a local currency, dramatically shifted spending patterns to keep money circulating locally, and extended basic financial services to people shut out of the mainstream banking system.

* In Croatia, the democratically-owned Ebanka functions as a non-profit bank, in stark contrast to most financial institutions worldwide. Their loans are given without interest, and every member has an equal voice when it comes to voting on big decisions, regardless of the value of their deposit.?

Visit IAL’s growing library of localization initiatives

 

LWM is a member of IAL, a cross-cultural network of thinkers, activists and NGOs from 58 different countries.

 

 

 

c

 

The West Midlands Forum for Growth? Well if I were you I wouldn’t start from here.

I attended the West Midlands Forum for Growth yesterday at Resorts World. It was the official conference of the West Midlands Combined Authority, and I was attending on one of two free tickets given to civil society bodies, as part of the group of civil society organisations aiming to have a voice in combined authority matters. Tickets in general cost somewhere in the low hundreds of pounds.

In Andy Street’s keynote address, he told us the WMCA would be judged on its performance on two issues: growth, and public services and the lives of citizens. He said that although we were performing well on the first, we were not delivering well on the second. He said that there was no purpose in economic growth[i] if does not deliver the improvements in the lives of citizens.

This was a really important and honest admission for our mayor to make, at the start of an event that harnessed one day’s worth of the thinking power of hundreds of people in positions of significant power and with years of experience. It should have been the start of a challenging and free-thinking discussion about how we would make sure this happened.

There was a general sense of positivity in the room – that the West Midlands authorities were now seriously collaborating and that the devolution deal, land use and investment policies being followed were going to lead to opportunities. I didn’t really share that sense: I was thinking about Andy’s statement and wanting to discuss how we could address this need and make the West Midlands’ agenda deliver prosperity that was shared fully across its people with public services that met their needs.

But that discussion did not happen. There was nothing really different or challenging. The solutions are to have the biggest site, the fastest train, the tallest building, the greatest growth – the illusory trickle down of machoeconomics.

What about exploring the inclusive prosperity potential to be gained from enabling small development on small sites, not just big development on big sites? What about increasing local ownership? Fostering local supply chains? Raising the lowest wages? A focus, as with our social care report with New Economics Foundation, on the ‘foundational economy’, of providing the things that we all need such as food, energy, care, education?

A discussion on ‘liveability’ towards the end covered many of the right things about wellbeing but didn’t really address how the growth agenda should achieve them. It was more as if liveability was something you did in order to create more growth, not something that growth needed to achieve.

Belatedly, I started to realise what this event was really for. The vast majority of attendance, alongside public sector people, were in roles relating to development: (architects, developers, project management). There was little input from voluntary sector or small business, let alone of course from active citizens. There was none of the cross-sector debate about how policy can make a real difference, as there was at regional conferences of the early noughties[ii]. I assume that all those present had an interest in being enthusiastic about the agenda in order to facilitate access to new developments in whatever capacity they were operating. While they might have cared about it, their role and expertise was not to help deliver policy, investment and practice that meet those public needs.

This, I guess, is fine. There probably SHOULD be an event (probably in a car-centric and unsustainable consumer-orientated venue[i], probably for a prohibitive fee) that brings such people together to create a positive buzz around the devolution agenda and to network about the business opportunities that will result.

But should that event be the official Combined Authority conference? Given the Combined Authority’s remit that Andy laid out, does its real conference need to bring in a wider range of perspectives, some experts in public services and local economics, in a vastly more participative format (I counted 4 questions from the audience in 6 hours) and perhaps not charge them £300 for doing so?

We’d be happy to support such a WMCA conference in 2018.

Karen Leach

[i] I cycled there and back. Alongside the asphyxiating fumes, the only way out as a cyclist was take the third exit off the M42/A45 roundabout in three lanes of motorway-hungry traffic. I am sure I lost one of my nine lives.

[i] Yes, we are aware of the the grim realities of the impacts of such growth on our future on a finite planet. Having gone many steps backward since the not-ideal era of Regional Development Agencies, we’re currently aeons from being able to debate this. Instead, we hope to enable policymakers to see that other objectives and measures are more critical, and that this will reduce the focus on, and eventually the impact of, such growth. We know that this won’t be in time to stop dangerous levels of climate change or the depletion of finite resources, but we have to start somewhere.

[ii] And no, I never thought I would be highlighting those as pinnacles of sustainability and social inclusion.

Make social care an economic ‘engine’ of the West Midlands

Press release for our inclusive economics & social care report with New economics Foundation – launched today

Social care may be on the brink of crisis but the sector has the potential to become a driver of the West Midlands economy.

A report for Localise West Midlands as part of the Good City Economies programme, has called for a re-framing of the sector, away from large-scale providers towards community and cooperative care models.

Prioritising and promoting community-scale care provision could transform the sector, creating high quality jobs and improving standards of care across the region.

Following calls by the new mayor of West Midlands Andy Street for greater diversity in the provision of all public services, this timely report sets out the benefits of a more localised social care system.

The report, Social Care as a Local Economic Solution in the West Midlands, was scoped by a group of organisations active in the region on inclusive economics and social care.

Social care is a ‘dysfunctional system dominated by “too big to fail” companies’, the report says. For while the ‘big five’ care providers appear to offer lower costs, almost a third of their spend goes to shareholders.

Data cited in the report shows that the UK’s five biggest chain social care companies offer big returns to investors, taking up 29% of their costs —the second-biggest drain on expenditure after staff wages.

It calls for the West Midlands Combined Authority (WMCA) to prioritise new models of care and establish a community care innovation unit.

Community-led care providers tend to keep money in the local economy and offer more personalised care for the same cost. A regional ecosystem of smaller-scale care businesses, such as West Midlands-based Crossroads Care, could ensure public investment in social care is re-invested in communities.

This re-framing of social care models a new approach to local economics, one that is aligned with the assets and needs of communities rather than focused on economic growth and inward investment. This ‘foundational’ approach to local economies could be extended to other sectors such as housing, food and utilities.

David Powell, subject lead at the New Economics Foundation and author of the report, said, ‘Social care is on a cliff-edge. New ideas are desperately needed. The West Midlands can transform the perception of the care sector in the region: a growing economic sector with the potential to meet a diversity of skills, employment and economic needs for communities that aren’t helped by GVA-driven economic strategies.’

Localise West Midlands, who commissioned the report said: ‘The West Midlands coordination role and the election of its first Mayor – who has committed to not-for-profit models of public service provision – places it in a unique position of leadership.

‘The region has an opportunity to be visionary if it understands how sectors like social care can provide careers in places where people live meeting local needs. To deliver its commitment to inclusive prosperity the WMCA will need strategies like this based on real local needs and assets, and to create an economy in which we all have an ownership stake.’

 

Notes:

Social Care as a local economic solution for the West Midlandsis part of the Good City Economies project, a partnership between New Economics Foundation and Centre for Local Economic Strategies, with funding from Friends Provident Foundation.

Localise WM works towards local supply chains, money flow and ownership for a more just and sustainable economy and will be focusing on policy opportunities such as this at the regional level over the coming years. Its work on this has been funded by the Barrow Cadbury Trust.

Download the report here

 For more information contact:

 Author and primary contact:

David Powell: David.Powell@neweconomics.org

 Co-ordinator of Localise West Midlands:

Karen McCarthy: karenm@localisewestmidlands.org.uk

@localisewm 0121 685 1155

Good City Economies: @GoodCityEconomy

 

Notes:

Localise West Midlands: http://www.localisewestmidlands.org.uk

Good City Economies: https://newstartmag.co.uk/good-city-economies/

International Alliance for Localization: Local Futures

In the Times, Ed Conway, economics editor of Sky News, describes problems arising from the complexity of globalisation, ‘the hallmark of 21st-century life’ and the International Alliance for Localization records examples of new modes of development and progress. He concludes: “Globalisation, once a means of boosting everyone’s income, has instead evolved into an excellent vehicle to help the rich get richer”.

The International Alliance for Localization sees that the building of more resilient economies will require a rethinking of the financial system, and its Planet Local series has been turning the spotlight on some inspiring examples of ethical banking:

* In Maine, USA, a local resident with money to invest  is providing nearby small farmers with loans whose interest is paid exclusively in the form of farm products.

* Brazil’s Banco Palmas, governed and managed by residents of the impoverished Palmeiras neighborhood in the city of Fortaleza, has issued a local currency, dramatically shifted spending patterns to keep money circulating locally, and extended basic financial services to people shut out of the mainstream banking system.

* In Croatia, the democratically-owned Ebanka functions as a non-profit bank, in stark contrast to most financial institutions worldwide. Their loans are given without interest, and every member has an equal voice when it comes to voting on big decisions, regardless of the value of their deposit.?

Visit IAL’s growing library of localization initiatives

 LWM is a member of IAL, a cross-cultural network of thinkers, activists and NGOs from 58 different countries.

 

 

 

 

A regenerative ‘Circular Economy’ includes more localisation of economic activity

The Circular Economy is advocated to replace and address the social and environmental damage done by the current ‘Linear Economy’ with its ‘take, make, dispose’ model, depleting finite reserves to create products that end up in landfill or in incinerators. It achieves its objectives through long-lasting design, maintenance, repair, reuse, remanufacturing, refurbishing, and recycling – reducing waste to zero. Some examples of such practice are presented on the website of the World Economic Forum.

The idea of circular material flows as a model for the economy was presented in 1966 by an economist, Professor Kenneth Boulding, in his paper The Economics of the Coming Spaceship Earth.

In the 70s, Walter R. Stahel, architect, economist and a founding father of industrial sustainability, worked on developing a “closed loop” approach to production processes. He co-founded the Product-Life Institute in Geneva; its main goals are product-life extension, long-life goods, reconditioning activities, waste prevention, advocating “more localisation of economic activity”.

With Genevieve Reday, he outlined the vision of an economy in loops (or circular economy) and its impact on job creation, economic competitiveness, resource savings, and waste prevention. Their Hannah Reekman research report to the European Commission, “The Potential for Substituting Manpower for Energy” (1976) was published in 1982 as a book (left) Jobs for Tomorrow: The Potential for Substituting Manpower for Energy. 

The Waste & Resources Action Programme (WRAP) a charity, which receives funding from the Department for Environment, Food and Rural Affairs, the Northern Ireland Executive, Zero Waste Scotland, the Welsh Government and the European Union was set up in 2000.  From its headquarters in Banbury it works with businesses, individuals and communities to achieve a circular economy through helping them to reduce waste, develop sustainable products and use resources in an efficient way. Below: the header for its March report:

On 17 December 2012, the European Commission published a document entitled Manifesto for a Resource Efficient Europe. This manifesto clearly stated that “In a world with growing pressures on resources and the environment, the EU has no choice but to go for the transition to a resource-efficient and ultimately regenerative circular economy” and outlined potential pathways to a circular economy, in innovation and investment, regulation, tackling harmful subsidies, increasing opportunities for new business models, and setting clear targets.

‘Resource’, the first large scale event for the circular economy was held In March 2014 and Walter Stahel joined the programme of 100 business leaders and experts. Many major stakeholders and visitors from across the globe attended. An annual large scale event is now increasing the uptake of circular economy principles. Circular Economy Examples may be seen on the website of the World Economic Forum and there are indications that some multinational companies may be cherry-picking related ideas which cut costs and increase profits.

Some will have reservations about the involvement of McKinsey & Company, which has issued two reports on the subject – one commissioned by the Ellen MacArthur Foundation.

Peter Day explored the work of the Ellen MacArthur Foundation and its associates on radio (In Business) on 23rd April 2015 – listen again here.

Ellen established this independent charity in 2010 and eloquently outlines the economic opportunity of a circular economy, giving the concept wide exposure and appeal.

 

 

 

ppppppppppppppppppppppp

Event: launch of post Brexit & Trump report commissioned by MEP

The Brexit vote and the election of Trump have been hailed as marking the reversal of the long trend towards increased globalisation.

These changes possibly also mark the end of neoliberalism as the dominant ideology of our times. For opponents of what globalisation and neoliberalism have meant in practice these developments might be seen as welcome. Yet at the same time Brexit and Trump seem highly problematic for anyone concerned with social justice and ecological sustainability.

green house header

A new report by Green House authors Victor Anderson and Rupert Read, commissioned by MEP Molly Scott Cato will be launched on Tuesday 28 March from 14.00 – 16.30 at Europe House in central London.

The report considers the impact of the UK’s withdrawal from the EU on trading practices and the opportunity to move to a less globalised and more localised economy. It emphasises that there are many different versions of Brexit, and aims to put a green version firmly on the political agenda.

Note: Panel discussion with Nick Dearden (Global Justice Now) and Helena Norberg-Hodge (Local Futures and International Alliance for Localisation of which Localise West Midlands is a member). Helena’s contribution will be by pre-recorded video due to prior commitments.

 

Register and get full details here.

 

 

 

Economic Prospects for 2017: Andrew Simms – New Economics Foundation

nef-logo             

As John Nightingale who sent the link says, this ‘reads well’: 

Each year the Financial Times conducts a survey of leading economists on the UK’s upcoming prospects. The New Weather Institute is part of that survey and predicts a bumpy ride. A lot of the FT material sits behind a paywall, so for interest here are the answers we gave to their questions (which are themselves interesting in terms of locating mainstream concerns) on issues ranging from economic growth, to Brexit, monetary and fiscal policy, inflation, immigration and, unavoidably, Donald Trump.

Highlights (full text on WM New Economics Group website):

It is time to stop measuring the health of the economy using orthodox economic growth measured by fluctuations in GDP as the primary indicator. By mistaking quantity for quality of economic activity, worse than telling us nothing it can be actively misleading. It tells us nothing about the quality of employment, the intelligence of infrastructure, the economy’s resilience, the environment’s health, or the life satisfaction of the population. As the United Nations Development Programme pointed out (as far back as 1996), you may have growth, but it might be variously jobless, voiceless (denying rights), ruthless (associated with high inequality), rootless (culturally dislocating in the way that fed Brexit, for example) or futureless (as now, based on unsustainable resource use) . . .

. . . tax breaks, subsidies and the way investment portfolios get managed means that money flows cheaply in fossil fuel infrastructure and operations. At the same time, necessary and successful emergent sectors like solar and other renewables can still struggle for affordable, patient capital. The privatisation and weakening of the mission of the Green Investment Bank is deeply concerning in this regard . . . prevalent economic uncertainties seem to be having the effect of putting everyone, the MPC included, on ‘watch’, and unlikely to do anything radically different in the ‘phony war’ period of approaching Brexit negotiations . . .

If anything, far from being downgraded by the Brexit debate, the economic importance of immigration to key UK sectors has been made more acutely obvious, ranging from higher education, to food, retail and a range of other service industries. Importantly, many of the drivers of population movement from inequality to conflict and environmental degradation show no sign of lessening and, if anything, growing worse.  The tone and promise of government policy seems mostly to affect the degree of xenophobia experienced by immigrants rather than significantly changing their numbers. With all these things in mind, I doubt trends in immigration will change much in 2017 and that this will buoy-up a UK economy facing a wide range of threats . . .

There is no reason in principle why QE cannot be used in a more intelligent and focused way. The UK is weighed-down with an aging, creaking, high-carbon infrastructure. The case for public investment as necessary to rebuild the foundations for a modern, clean and efficient economy to underpin our quality of life is overwhelming. The cost of money for conventional borrowing is cheap. And the decision by the Bank of England to expand its quantitative easing (QE) programme from £375 billion to £445 billion in the wake of Brexit, demonstrates that public money creation is also possible when the situation demands it. Up to date, QE has benefited the banks, and the holders of certain assets, with broader economic benefits being questionable. But, as Mark Carney has previously indicated, there is no reason in principle why it cannot be used in a more intelligent and focused way to aid the productive, low carbon economy. I and others have consistently argued that far more good could be done if the same basic mechanism was used, for example, to capitalise a much larger and more ambitious green investment bank via bond purchases. The work subsequently undertaken such as large scale energy efficiency retrofitting of the UK housing stock and the roll out of renewable energy would generate good quality local employment and better prepare Britain for the future. There is no sign yet that the government intend to seize this opportunity and rather too many signs that any borrowing that is undertaken will not be put to as good use . . .

Combined with the sentiments unleashed by Brexit, and the UK government’s active new embrace of industrial strategy, it is possible that the economic pendulum may swing back some degrees from globalisation toward localisation. Done in a purely autarchic way this might be negative. Done with respect to international cooperation and obligations, and to help build a more environmentally sustainable economy, it could snatch success from the jaws of chaotic self-destruction.

http://network.neweconomyorganisers.org/conversations/11898 Did you know… Adding your events to the NEON calendar will automatically promote them to our 1414 membersadd your events here.

 

 

 

Localisation/swadeshi: a programme for long-term survival

 

Swadeshi has been described by Satish Kumar, founder and Director of Schumacher College in Devon as a programme for long term survival.

It is the principle of preferring the neighbouring to the remote.

It relates to need-based lives, ruling out unlimited consumption.

It is not autarky; but a needs-based global alternative.

Economic swadeshi was shaped by Gandhi, who advocated the production and use of indigenous food and goods. In 1956, the Khadi and Village Industries Commission was established in by Act of Parliament.

 

kvic-header

Active today, a list of its SMEs may be read here. 

 

Swadeshi practices economics according to its original definition of good household management, seeking to preserve natural wealth and promote the balanced development of all regions and society as a whole.

It regards the market as an instrument, not as master; the swadeshi global view is “let a thousand markets bloom – and not merge into one global market”.

 

 

 

Corbyn focusses on decentralisation: localising energy and transport

corbyn-eee-manifestoJeremy Corbyn has launched an environmental manifesto that outlines plans for the UK to achieve 65% of energy from renewable sources by 2030 – without fracking.

Corbyn proposes to put cities, councils, devolved governments and communities at the heart of an efficient, decentralised energy system by promoting a shift to electric and hydrogen buses and cars; a network of low-emission zones and cycling with safe cycle lanes and hire schemes in every town and city.

The manifesto places social enterprises, including not-for-profits and co-ops at the heart of Corbyn’s plans for a “publicly run, locally accountable energy system”.

A “publicly run, locally accountable energy system”.

In a speech in Nottingham, the Labour leader said, “We want Britain to be the world’s leading producer of renewable technology. To achieve this, we will accelerate the transition to a low-carbon economy, and drive the expansion of the green industries and jobs of the future, using our National Investment Bank to invest in public and community-owned renewable energy. This will deliver clean energy and curb energy bill rises for households; an energy policy for the 60 million, not the Big 6 energy companies.”

He has promised to promote over a thousand local energy companies in the next parliament and legislate to give community energy co-operatives the right to sell energy directly to the communities they serve.

Housing

It would launch a National Home Insulation plan to insulate at least 4 million homes and phase out coal-fired power by 2025. The Labour leader estimates over 300,000 jobs would be created in the renewables sector as a result of these measures.

corbyn-eee-graphic

Labour would reinstate the department for energy and climate change in its first month of going back into government, as part of its plan to rebuild and transform Britain, “so that no-one and no community is left behind,” he said at the event in Nottingham.

Jeremy Corbyn also encourages the British public to take action as individuals to help to meet the Paris climate agreement. He proposes to use the precautionary principle to protect the environment and people from harm – not a pay-to-pollute approach allowing the richest corporations and individuals to wreck our planet.

 

 

 

News from the Combined Authority AGM

The West Midlands Combined Authority intended to hold its inaugural AGM last Friday, 10 June, but a little local difficulty in the House of Commons meant that the legislation hadn’t been completed in time.  They went ahead with the planned business, intending to ratify it once the powers had been vested in them.

The meeting was held in Hall 4 at the ICC, around a huge table to accommodate the council leaders, chief execs, LEP and others.  There had been very little publicity for the event, but there were a number of interested people in the public seats.

Much of the agenda was formal acceptance of constitutional matters – the agenda and papers are here:

https://westmidlandscombinedauthority.org.uk/committee-papers/west-midlands-combined-authority-board/

Cllr Bob Sleigh from Solihull was elected chair and Cllr Pete Lowe from Dudley was vice-chair.

The reports pack does include the governance structure at p37, which is worth a look as it indicates the areas of future work. The portfolios were not allocated though: this was deferred/delayed to an unspecified future date.

There was an intervention from David Jamieson, the Police and Crime Commissioner about the powers of the mayor and the potential for the WMCA to veto the mayor’s decisions.  He felt he couldn’t support the transfer of police powers to the mayor on that basis.

The Strategic Economic Plan was not available in advance: despite being launched before the meeting, it was not handed out until the relevant item was reached on the agenda.  The online version is quite hard to find but this is the link:

https://westmidlandscombinedauthority.org.uk/about/strategic-economic-plan/

Some of the diagrams do require a measure of caution – see Ravi Subramanian’s take on one of them:

The idea was repeated that this was part of a nest or set of SEPs which incorporates the three LEP SEPs.  The versions shown for this were the 2014 ones, so no formal updating has yet taken place.

Martin Reeves, the “Head of Paid Service” and Chief Exec at Coventry CC, introducing the SEP, said that the dynamic economic impact model was the most exciting part of the strategy.

The Strategic Transport Plan was also presented – this was part of the papers circulated in advance, as above.   The chair of the transport delivery committee will be Cllr Richard Worrall from Walsall, but the decision on a vice-chair was deferred.

There were also updates from the three commissions:  Norman Lamb MP gave an interesting verbal update on the work of the Mental Health Commission.  While he did emphasise that their work was about reducing the cost of mental ill-health and addressing the impact on productivity, he talked about the West Midlands leading the way nationally and that it was not a one-off exercise but the start of a journey.  They have looked at the work of Thrive NYC, which is led by the Mayor of New York,and favour a similar concordat approach.  He also mentioned the criminal justice system and that they have identified that mental health treatment orders are not being used.  The full report from the commission will be launched in September, but there were no notes or slides from his update.

The Land Commission update really just identified that they are not under way yet.  The one which worried me was the Productivity and Skills Commission report.  Sarah Middleton, the chief executive of the Black Country Consortium, gave a brief report.  The chair of the commission would be announced shortly.  Desktop research had been done re mapping and research, and there would be a workshop on 4 July for regional and national experts to identify lines of enquiry. This would be business-led with support from the universities.    There seemed to be very little planned to involve local groups or to allow the voices of young people and seldom heard groups to be heard.  Nick Page, chief exec at Solihull MBC, seemed to be the lead on that, so organisations who feel they should be there should probably contact him.

Overall, it was difficult to tell if the less than inclusive approach was deliberate, or accidental given their timescales and resources.  We do need to keep reminding the Combined Authority that civil society expects them to make some of the effort to engage.

Karen McCarthy