Regional economic strategy is now being taken more seriously. Localise West Midland’s Andrew Lydon has been examining the collection of regional prosperity and inflation indices in this and other countries for some time and has corresponded with MPs and government departments on the subject.18 months ago the Statistics Authority told the Office . . . → Read More: Could regional banking help to develop flourishing regional economies?]]>

Regional economic strategy is now being taken more seriously. Localise West Midland’s Andrew Lydon has been examining the collection of regional prosperity and inflation indices in this and other countries for some time and has corresponded with MPs and government departments on the subject.18 months ago the Statistics Authority told the Office of National Statistics to look at setting of regional and social inflation indices as Andrew had recommended.

In the March Budget, Chancellor George Osborne announced that Government will present evidence on the case for the introduction of regional pay structures in some civil service sectors.

*

John Nightingale* recently wrote an article, Rebuilding Trust in the Regions, now published in the Good Banking Forum – which includes a range of leading figures from academia, finance, politics, the law, trade unions, consumer and civil society groups who are demanding real reform of the banking sector. GBF challenges the limited scope of the Independent Commission on Banking and hopes to mobilise public pressure for good banking.

John asked whether banks could take remedial action regionally, for example by varying the rate of interest or giving preference to certain sorts of loans. He realises – however – that it is currently difficult to get a clear picture of regional economic activity, in absolute terms or in terms of trends, because too few statistics are published on a regional basis.

He pointed out that other countries, such as the United States and Germany, have a tradition of regional economic management and commented: “In the past there was some balance through the informal supervision of the commercial banks by the Bank of England. But it seems that in 1997 supervision was handed over to the Financial Services Authority, which was more concerned to root out dishonesty and corruption than with economic performance.”

Asking if banks could take remedial action regionally, by varying the rate of interest or giving preference to certain sorts of loans, he also contemplates the advisability of a switch away from lending to purchase property and other fixed assets, into industry.

Could banks be persuaded to realise that helping to develop flourishing regional economies would be to their long-term advantage – and move in this direction?

In the ongoing discussion of banking reforms, John Nightingale urges that attention be given to the position of the regions, to ensure that:

• views of stakeholders in regions are represented to banks there;
• stakeholders have an opportunity to monitor bank activity;
• known and thereby accountable representatives from the regions are included on national financial bodies;
• more statistics are made publicly available on a regional basis so that all stakeholders can be better involved in the debate and consequent decisions.

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His article may be read in full here.

*Canon John Nightingale: chairman of the West Midlands Jubilee Debt Campaign.

Our Bank of England have again told us that their policy rate of interest is . . . → Read More: UK in recession – but the highest interest rates in Europe]]> The UK has now gone into recession, with the national income having shrunk for 2 successive quarters. Classical economics has always suggested that an important part of fostering growth in such circumstances is for interest rates to be reduced.

Our Bank of England have again told us that their policy rate of interest is being held at 0.5%.  That is lower than the policy rate that the European Central Bank has set for the countries of the Eurozone.

Thus it might surprise readers to see that the actual rates on loans here in the UK are higher than those in most of Europe. Here in red are the average rates for loans for house purchase in a number of topical European countries, set beside ours.

Alongside in blue are the average savings rates being paid on basic savings that are not tied up for   more than 3 months.

A time traveller who stumbled into 2012 from twenty years ago, and who ended up trying to come to grips with our financial problems before he had updated himself on our politics, might wonder if an extremist Green cabal had seized control of our monetary policy. One could suspect that they deliberately  want to undermine consumption and punish the ‘strivers’ and people with aspiration.  But no, this is just Sir Mervyn King and the Bank of England!

This chart  has not changed much since we did a similar comparison of the same interest rates in December.

In that report we suggested that even then the time had come not just to change interest rates, but to reform the way the Bank of England gives guidance to the banks about what sort of rates should be suitable. That December Report can be found here.

And on top of this recession, high interest charges and the highest inflation rate among the leading countries that, with the UK,  founded the old G7.

Mervyn King is now in his last year as Governor of the Bank of England. With the selection process to choose a successor about to begin, so too must a debate on how the Bank can reform the way it works; and even how it can be made more accountable to the society it has served so very poorly.

ANDREW LYDON            

Regional Prosperity & Inflation Project

Members of the public will be able to discuss issues relating to roads, education and recycling/refuse collection with senior Birmingham councillors, under the new . . . → Read More: A pledge to give the Birmingham public a voice on services]]> Birmingham city council’s incoming leader, Sir Albert Bore, makes his first contribution to the dialogue on our cities’ governance called for in the last blog. Read the Post report here.

Members of the public will be able to discuss issues relating to roads, education and recycling/refuse collection with senior Birmingham councillors, under the new Labour administration.

The ‘citizens’ question time’ is one of many changes to be made to the authority’s constitution.

“. . . Globalisation has created enormous polarisation in society and the economy.

“A predominance of large corporate incumbents, coupled with . . . → Read More: Many Scots want more localised power]]> The headline, a reflection indirectly related to the dialogue called for in the last blog, was given to a letter from Patrick Grant, a Scottish businessman, published in the Financial Times. He wrote:

“. . . Globalisation has created enormous polarisation in society and the economy.

“A predominance of large corporate incumbents, coupled with over-centralised government (largely based in the south-east), has contributed to an increasing lack of diversity in the economy and in society . . . it is not surprising that many in Scotland, particularly the young, would prefer a more localised power structure with policies more relevant to Scotland’s particular issues.”

Many English also want a more accountable and localised power structure, with the financial resources to address the region’s problems.

Let dialogue begin!

Even leaving aside the fact that governments like to fiddle with . . . → Read More: Now let’s have a proper dialogue on our cities’ governance]]> OK, so we – and all other places except Bristol – voted not to switch to an elected mayor. According to some Yes campaigners – whether through naivety or pique is I’m not sure – we will never have another chance to change.

Even leaving aside the fact that governments like to fiddle with local governance on a fairly regular basis and that political change does happen within cities, I just don’t quite get this.  If we had voted for an elected mayor, we would have an elected mayor whom wouldn’t be able to abolish without an Act of Parliament, and we might well get stuck into a similar Boris/Ken/Boris/Ken (or should that be Boris/Boris) rut as London – the novelty would wear off. Yes, there would have been positives, of course, but – last chance to change anything? Almost more the opposite. Having said no, we have more options.

While it looks likely to have had some benefits, the model we were offered was fundamentally flawed, and so was the way in which it was pushed upon us. With fairly typical arrogance, the Government never felt the need to give voters much clue as to what powers might be achievable, and never even bothered to provide information on the implications of the different systems where ordinary voters could find it (and in Birmingham neither did the council nor the campaigns). Even the day before the referendum, there was nothing on CLG’s website that told you how the system would be different under a mayor – leaving people to assume that the most alarmist ‘dictator’ version of events could be entirely true.

Meanwhile in fairly desperate economic times, the nod-wink offer of extra powers if we complied exactly with the Government’s plans for us, and never mind that this locked us out of BOTH the two other systems on offer let alone of negotiating change on our own terms – sounded to local people like blackmail; like offering an impoverished household a doorstep loan – they’ll explain the interest rates when you’ve signed on the dotted line, thank you.

As Chris Game presciently hinted in the Birmingham Post a few days ago, the Coalition could not have made it more compelling for the city’s population to vote ‘no’ if they had tried.

Now the referendum is behind us. Disappointed ‘Yes’ campaigners will, I’m sure, still want to see change. All the ‘No’ campaigners I know are deeply unhappy with the status quo and want to see change (just not government-bullied, ill-thought-through, power-concentrating change.) So would it not be better, rather than lamenting that we didn’t accept what was on offer with blind faith, to take the initiative, capitalise on the passion of people on both sides and begin dialogue on progressive politics for our area on our terms – and with better informed populations taking the decision?

For one thing, the city is still capable of re-running a referendum on elected mayors. This would be vastly improved by making more information available to voters on what they are voting for (or against). But better, we can investigate the potential for strategic collaboration – mayoral or otherwise – across local authority boundaries, leaving local authorities’ democracies intact, and push for a conurbation-sized city deal. Greater Manchester offers us one model. We can also press for urban parish or community councils. We can investigate the potential for citizen-led economic development programmes such as are successful in creating socially beneficial economies many parts of Canada and America, to balance the economically centralist drivers of LEPs. We should certainly discuss how local governance can get the best balance between diverse and decentralised representative democracy, efficient decision-making, transparency and resilience to vested interests. There may well be new Birmingham councillors keen to see change and willing to talk about new ideas.

One last point – if there had been a Yes vote, I would have written something very similar. Just as voting No is not a victory against Government bullying because change is still needed, Mayors would never have been a panacea. Whatever the outcome and however you feel about it, the referendum was only ever another beginning of another dialogue.

Karen Leach

Large services operators took legal action hoping to block a rival application to build a motorway service station, on the grounds that Stroud District Council acted unlawfully when it granted planning permission in 2010.

One claim cited was that a clause in the agreement requiring the operator to source a percentage of goods . . . → Read More: Council’s bid to require local sourcing upheld by judicial review]]>

Large services operators took legal action hoping to block a rival application to build a motorway service station, on the grounds that Stroud District Council acted unlawfully when it granted planning permission in 2010.

One claim cited was that a clause in the agreement requiring the operator to source a percentage of goods locally was illegal. The winning bid included ‘no franchises, homemade food and locally-sourced products’ and an undertaking to employ 200 local people during construction and 300 on completion.

At a judicial review held in January a judge ruled that the council had acted lawfully and that the planning permission should stand. Costs were awarded to Stroud District Council but less than a month later the claimants asked for leave to appeal, again claiming that the requirement to source goods locally was unlawful.

However, a second judge ruled last month that there were no such grounds for appeal. Philip Skill, head of planning for SDC said:

“The council is delighted that the Court of Appeal has refused to give leave to appeal over the single issue of selling locally produced goods at the facility. The Council has a policy of promoting sustainable development and the offer from Gloucestershire Gateway Ltd to source a significant amount of their goods from the local economy is to be welcomed.”

Questions were again . . . → Read More: Discussing with Mirza Ahmad how as mayor he would improve Birmingham’s local economy]]> Along with other organisations broadly sharing a local economy agenda, we recently met with our third potential mayoral candidate, the independent Mirza Ahmad, to discuss what he might do as a Birmingham mayor to support a more locally focused, equitable and sustainable economy which maximises the economic benefits to local communities.

Questions were again around: how to address an economy overly focused on the city centre at the expense of unemployed suburbs; the importance of income equality and how it can be addressed; how to remain influenced by local people rather than a London elite; how to avoid the city losing money from the local economy through its energy bills; support for Birmingham Energy Savers; how he sees sustainable development and green growth fitting with his economic ideas for Birmingham; how he would work with the council culture; and how the city’s local democracy could be improved if there were a mayor.

Mirza’s responses were along the following lines, although as with previous blogs this is of course the gist rather than a verbatim record:

-         He is conscious of the ten year difference in mortality rates across the city and agrees that any elected mayor would need to look at the whole city, not just the centre, including looking at small and medium enterprises as bigger players tend to go to city centre or big sites.

-         He thinks a mayor will not have time to deal with the minutiae of local economic development and turns it the other way round:  rather than giving his own top ten priorities he would be asking the city’s people for their top 100 priorities and then guarantee at least 1% improvement in those 100 issues in the first year. Data on many issues exists within the council already with which to form a baseline against which to judge progress. Priorities could be amended as needed later. This is the advantage of a mayoral agenda that is not political party dominated. People and groups will be able to input their priority issues, directly to Mirza, through website and other mechanisms which are being explored by him.

-         High energy bills is a big issue for all. Many housing structures are inadequate and one element to deal with this is the Green Deal. However, people need to take the initiative themselves as he has done with his own house and cars: everyone can and must do something and it is more about this than what the public sector does for them. The public sector itself is also a consumer and it could be possible, for example, to switch off or minimise street lamps and traffic lights between say 1am and 5am as a cost and energy saving. [He later suggested that improved traffic flows and reduced environmental pollution within the city could also be achieved by deregulating Bus Lanes to ensure normal traffic can use them outside of the busy peak hours of 7am – 9:30am and 3:30pm-6:30pm.]

-         A mayor would need to work with all Birmingham people, the London elite and the international elite. A lot of resources come from London and so these individuals will need to be taken head on – not as a battle but through influencing and informing them – to secure best results for Birmingham.

-         Sex/gender wage differences should certainly be addressed. In terms of the comparative wages of the highest and lowest paid, he thinks people should be paid at the appropriate rate: you don’t look at the gaps, you look at the worth of the job. The top people get paid more because people and organisations think they are worth such salaries. It’s a market driven issue and it also allows people to aspire to high incomes so these help to drive equality in the long run.

-         There is a myriad of expensive and complex committees within the council structure and serious arguments must be had about how many of these are really needed and would remain. If freed up from committee work, elected representatives will have more time to spend on local democracy. It may, for example, be better to have fewer councillors and the public are unaware how much they spend on local democracy – given that only ten councillors out of 120 councillors are part of the current executive. The cost of the scrutiny function is horrendous.

-         Local people should have local choice and should be involved in the decision-making for their area. But devolution to communities for the sake of it is pointless if power is just handed down for power’s sake. It is more about what people do with it and the clarity of what is to be done in exchange for the power. He’d like to see more devolution from Whitehall and councillors further enabled to be involved in ward committees. There may be a role for pressure groups within these structures so long as funds are accounted for and proper agreements are put in place.

-         He demonstrated his own personal commitments to reducing his own CO2 footprint. He would encourage brownfield sites before greenfield sites; and would encourage sustainable inward investment. If someone says they will put £X million into Birmingham he will listen to them. Where individuals are affected by such development, there are regulatory processes outside of the control of the Mayor to go through, such as, planning to ensure people are not unreasonably affected.

-         If investors come to the city saying they can develop in deprived areas they will have his support.

-         He feels our questions have been very much focused on Birmingham, but the elected mayor will be influential beyond Birmingham, which sends signals to the world in terms of inward investment.

-         One person cannot deliver everything, but what a mayor brings is a new approach which is exciting and will change the status quo of the party political system. If we opt to continue the existing or the new system with political party leadership there won’t be that change.

-         He believes he can work with and improve the culture of local government because he has changed every department he has managed – people can be the catalyst for change.

-         Council officers need to think more commercially and being more effective and efficient with their time. This concept is easy for lawyers to understand but not for the public sector.  Many don’t think about WHY they are doing a job, or about what they are going to deliver to put Birmingham first. If they aren’t putting Birmingham first then the organisation doesn’t need them. 50,000 employees is a lot, although there have been recent improvements to reduce staffing.

-         Sustainable development: he believes in whole systems thinking – there is no point in just looking at one element of a system. Economic growth is a good aim but needs to be balanced with locations and skills – to deliver what is needed. Some sustainable development issues are regulatory eg planning and so outside a mayor’s jurisdiction although he can put forward the economic arguments. Waste is more in the hands of the providers but contractual arrangements can be addressed as they come up for renewal and before through negotiation. Polluters will pay and they will need to be more economically and sustainable development conscious.

-         Birmingham mayoral nfluence will go well beyond the boundary – the city region, the LEP etc. Birmingham is a magnet and the international focus is the future. If we think we can sustain ourselves by just looking inwardly than there is a danger. You have to look at it from an investment point of view – what Birmingham offers in terms of quality of life, skills, locations – and return on investment for investors.

-         [We asked how it can be ensured that inward investment benefits the Birmingham population] The ICC development failed to generate much trickle-down because it hadn’t built it in from the start. The systems thinking wasn’t right.

-         There is no point in putting money into a dead factory if there isn’t a business case for it. It often makes sense politically but it doesn’t work to regenerate an area.

-         Skills need to be delivered through schools, colleges and universities. Retention of graduates is an issue.

-         Investing to save is a philosophy he believes in, so he would support the principle of Birmingham Energy Savers.

-         He has made it clear that he’ll bring the best people round the table – not just from within or associate with a political party as a political party mayor would.

-         Local procurement: it’s very clear that if you want to generate the local economy self-production is the best way, but you have to look at your existing contracts.

-         He intends to bring a fresh approach and is happy to talk to anyone who thinks it’s important to talk to him. While at the end of the day he’d be responsible for the decisions he took, he would start with proper consultation and the people’s top 100 priorities.

Click here for reports of our earlier meetings with Gisela Stuart and Sion Simon. We are organising a date to meet with Liam Byrne, which of course would be cancelled in the event of a No vote.

See also our elected mayors factsheet produced in conjunction with Birmingham Press.

Birmingham Press is also holding a mayoral debate with speakers for and against mayors, this evening 8pm at Ort cafe in Balsall Heath, which will be chaired by LWM.

Karen Leach

Feel free to – in fact please do – distribute it by email and print it out for events or public . . . → Read More: A briefing on Mayor vs Leader/Cabinet systems]]> Birmingham Press and Localise WM have now produced a factual briefing on the differences between the Mayoral and Leader/Cabinet systems. This is an attempt to plug the huge information gap around the issue.

Feel free to – in fact please do – distribute it by email and print it out for events or public places. The important thing is that we have a better informed Birmingham making its decision on whether to switch to a Mayor – or not.

Mayors – Factual information briefing (webpage version)

Mayors – Factual Information briefing (PDF version)

Karen Leach