development

Workshop: Local Economic Development and Skills Under Austerity

abuaro01

In this post, Jonathan Payne reports back on a two day workshop on local economic development (LED) and skills policy under austerity held by the Centre for Urban Research on Austerity (CURA) in May.

The workshop brought together leading UK academics in the areas of LED, governance and skills to debate the changing institutional landscape around LED in England and the opportunities and constraints afforded by policy commitments to ‘localism’. This afforded a rare opportunity for academics interested in economic geography, local governance and skills to come together and discuss how the ‘localisation’ agenda is playing out in practice.

As Ewart Keep argued, for the last thirty years skills policy in England has tended to be a national project, focused on generalised workforce upskilling in pursuit of government targets. With government now promising to devolve more of the adult skills budget to local areas, there are questions around how much autonomy local areas will have and what level of resource they might draw on. Furthermore, past experience would suggest that a narrow focus upon education and training, or boosting the supply of skills, runs up against problems of weak employer demand for skill, linked to the way many firms in the UK compete, design jobs and manage staff. This is reflected in a high proportion of low skill, low wage jobs compared with many other advanced European countries, relatively low productivity, and problems of ‘over-qualification’ and ‘under-utilisation of skills’ within the workplace. As the UK Commission for Employment and Skills has argued, there are limits to what boosting skills supply can achieve on its own without wider measures to influence the ‘demand side’. The latter requires effective measures such as industrial policy, economic development and business improvement to grow the proportion of high skill jobs and upgrade the skill content of work more generally. Skills policy might work better if integrated and joined up with such activity.

The role of local enterprise partnerships, city-deals and combined authorities is clearly of relevance here for a number of reasons. First, government is promising to ‘empower’ local communities through these mechanisms to drive LED. Second, skills policy is being localised and skills often figure prominently within this agenda. These claims are controversial, particularly in terms of how ‘real’ localism is at time of funding cuts. However, localism is also a moving picture, and if skills and economic development are to be integrated as part of a more holistic approach, then this is one of the few areas where we might look for examples of progress (or not).

Many issues came to the fore during these discussions: the tendency for LED governance to bounce back and forth between different scales and for policy to ‘keep failing forwards’; the uneven capacity of LEPs; the role of power in devolving ‘risk’; the need to understand how local actors comprehend their situation and what motivates their engagement; the tendency for policy to eschew interventions inside the ‘black box’ of the firm; and the question of what ‘localism’ can tell us about the ‘neo-liberal state’ in a period of crisis management and the narratives it constructs. What is clear, however, is that research will be better placed to address such issues where academics work across disciplinary boundaries. LED, governance and skills are an example of one such interface where collaboration is likely to prove particularly fruitful.

Jonathan Payne is Reader in Employment Studies at De Montfort University and a member of CURA (Centre for Urban Research on Austerity) as well as CROWE (Contemporary Research on Organisations, Work and Employment

Workshop on Labour and Development: An Interdisciplinary Dialogue

abuaro01

Date and Venue: Wednesday 1st June, 9.30-5pm, Hugh Aston building, De Montfort University, Leicester, UK
Conveners: Dr Adam Fishwick and Dr Anita Hammer

Crisis of contemporary capitalism has put labour, development, class struggles and the state at the centre of analysis both in the Global North and the South. This research workshop brings together scholars across a wide range of academic disciplines, including Anthropology, International Political Economy, Industrial Relations, Labour/Economic Geography and Development Studies, and geographical interests including Latin America to South and South-East Asia to Africa.

Our aim is to explore the question: how can we engage across academic disciplines on existing methodological and theoretical limitations in understanding the role of labour in development?

The four interrelated themes around which the sessions and roundtable are organised include:

  • Conceptualising forms of resistance
  • Situating labour and the state
  • Social reproduction and the household
  • Informal economies and precarity

This workshop is a starting point for the establishment of a wider academic network for understanding labour and development with a plan to host a second workshop at the University of Sussex in January 2017.

For more information please contact Dr Adam Fishwick at adam.fishwick@dmu.ac.uk

Local Enterprise Partnerships, Skills Strategies and Austerity

abuaro01

In this post Jonathan Payne introduces a CURA-funded scoping study that he is carrying out with Phil Almond and Jonathan Davies into the role of local enterprise partnerships in developing skills strategies in a context of austerity

Many commentators on skills policy in England have long argued that the approach has been too narrowly focused on boosting the supply of skills without paying sufficient attention to employer demand for skill and the need to ensure that skills are put to productive use in the workplace.  The approach reached its height during the New Labour years when government set national skills targets and tried to use the power of the public purse to boost skills supply. By 2010, this approach was clearly running into problems, with major issues around ‘over-qualification’ and the ‘under-utilisation of skills’. Indeed, the UK Commission for Employment and Skills has argued that unless these problems are addressed, the UK will struggle to address its ‘productivity problem’.  Put simply, skills policies are likely to work better if ways can be found to integrate skills supply, demand and utilisation. This means linking skills supply with economic development and business improvement.

Progress has been very slow, and it might be argued that austerity only makes matters more difficult. However, the fact that government now has little money to throw at the ‘skills problem’ may open up opportunities for new thinking and approaches. The current government also wants to develop ‘employer ownership of skills’, which really means getting employers to pay more for training rather than relying on government support. Again, however, substantive progress is unlikely to be made unless ways can be found to raise employer ambition around skills. This essentially means impacting on local economic development as well as the way employers compete and design jobs which shape their actual skill requirements.

Enter local enterprise partnerships (LEPs), the new kid on the block when it comes to sub-regional economic development. LEPs bring together local councils and businesses around a wide ranging agenda, which includes economic development and skills, and occupy a complex institutional landscape involving Combined Authorities, City Deals, City-Regions, Enterprise Zones and more.

Amongst other things, LEPs are grappling with the challenge of developing more locally responsive, ‘demand-led’ skills strategies which feed into their strategic economic plans. However, they have courted controversy in terms of whether they are locally accountable, and whether they have sufficient powers and resources at their disposal to make a difference. What local actors understand by a ‘demand-led’ approach to skills is also unclear. Is it about responding to employer needs through better skills matching or is about raising employer demand for skill? How can ‘employer demand’ and ‘learner demand’ be combined, and does the current funding regime for skills help or hinder matters? For example, more adult funding is being routed through LEPs, while adult loans prioritise individual choice, with labour market intelligence and careers advice expected to square the circle. National targets and priorities also remain, in terms of the number of apprenticeships for example, while the new ‘apprenticeship levy’ is national rather than local in approach.

Policy has responded to criticisms around LEP capacity by boosting their core funding and is seemingly prepared to devolve more to ‘city-regions’ if they can make a strong case and satisfy certain government criteria. The question is whether this is a real step forward and if it goes far enough? Is central government serious about decentralisation and localism, or is it just handing local actors a set of problems without the means to really address them? Are we talking about the devolution of power or the offloading of responsibility? Local actors, with varying capacities, however, may try to run with this and see what can be done. An important question for research then is what progress can they make in developing an integrated, demand-led approach to skills which is long overdue, given the current policy dispensation?

Jonathan Payne, Jonathan Davies and Phil Almond are currently exploring these issues through a CURA-funded research project looking at the skills agenda for LEPs in the Midlands. Scoping interviews are currently being conducted with LEPs, local authorities, further education colleges and employer bodies with a view to understanding the issues on the ground, what progress is being made and the challenges local actors are coming up against.

On the 16th and 17th of May CURA will be hosting a workshop on Local Economic Development to discuss research agendas around local economic development and skills in England, if you are interested in attending please email Suzanne Walker swalker@dmu.ac.uk to register your place.

Jonathan Payne is a CURA member and Reader in employment studies at De Montfort University.

The London Communities Commission: Building Local Capacity

abuaro01

CURAs Ines Newman writes about the independent London Communities Commission (LCC), which is tasked with looking into how citizens and communities in London’s most deprived areas might be strengthened and supported in these times of austerity.

The LCC was set up in September 2015, with eleven Commissioners from the private, public and voluntary sectors, convened by the Paddington Development Trust and supported by London Funders and City Bridge. Its set up is in response to growing concerns that, without external support and the active engagement of local people, the quality of life there may continue to deteriorate to levels that not only destroy the well-being of tens of thousands of citizens, but pose a threat to the social and economic sustainability of the whole capital.

Local authorities are facing a challenging period with a reduction of central Government grant of 44% in London from 2010-2015. The Spending Review announced further cuts and by the end of this Parliament local authority spending capacity will be lower that of any time since 1948. Not only has this led to a decline in services and under-investment in social housing but research has shown that in areas of greatest need the public sector cuts have led to a decline in bidding for foundation funding and a decline in volunteering. This is because austerity has resulted in a decline in the number of small voluntary and community organisations as well as in a reduction in the capacity of those that survive.

The Commission has highlighted the crucial role of citizens within deprived local London communities. Without local residents being involved in designing the services, which are meant to meet their needs, unsatisfactory solutions will be developed. In this time of austerity, it is essential to draw on potential resources that local communities offer in terms of knowledge, relationships, skills, and their passion and enthusiasm about making a difference to the area in which they live. Citizens are the key assets to healthier social and economic outcomes across London.

With strong leadership, citizens in neighbourhoods can influence new ways of working which not only reduce isolation and ensure access to services but also further develop self-management skills and capacity to increase personal and collective independence. These ways of working can also deal with problems before they become severe: they are the fences on the cliff not the ambulances at the bottom. By identifying and intervening early costs can be saved later. The Commission gathered evidence around new, community-led, ways of working, illustrated in our Report of Evidence. The Commission were excited about these positive initiatives which clearly show how power can be devolved to citizens in areas where there is some sense of belonging and how effective this can be if the devolution is supported by the funders, public, private, and voluntary sector.

However, individual citizens have limited power to change the world. In order to achieve real empowerment, they need to be able to build local support structures through which they can work together and release the value of individual and collective creativity. New citizen-led ways of working also require changes in the way local communities are funded and the terms by which resources get to the acute areas of growing poverty in London.

Commissioning, for example, needs to be radically reconfigured. More than 50 per cent of council spending is on goods and services bought from the private and community and voluntary sectors. Billions of pounds are invested in procurement by councils. In an attempt to save money on commissioning, councils are joining up with other local authorities and contracts are getting bigger and more complex. The result is that only very large organisations have the capacity and financial security to enable them to bid for such contracts. Four major government suppliers – Atos, Capita, G4S and Serco – between them held government contracts worth around £4 billion in 2012-13. The voluntary sector holds only 9 per cent of local contracts by value and 5.6 per cent of central contracts.

The large companies and national voluntary groups who get these contracts sub-contract to smaller voluntary organisation with tight numeric targets on outputs and little money to cover any overheads. Money is paid to the small organisations on results creating cash flow problems and transferring risk. The small organisations have no ability to alter the contract and outputs according to local needs. The funding does not give them the opportunity to build community capacity. They inevitably seek to fulfil their targets by first dealing with cases where they know they can achieve success- picking the low hanging fruit. Those with complex needs are only offered standard services and little time is invested in addressing their needs. Trust and relationships between service providers and those whose needs they are trying to address is broken down.

But commissioning does not need to be like this and there is plenty of evidence of better practice which we discuss in our report. We have amassed a wealth of evidence and are in a position to make recommendations to various bodies and institutions to tackle priority unmet needs and disadvantage in London’s most stressed neighbourhoods. In our recommendations for the Mayoral candidates we suggest that the new Mayor sets out a clear vision and ambition for the future of London to tackle poverty, deprivation, poor health and the increasing polarisation that threatens London’s sustainability. In particular we are recommending that the Mayor, working with the London Boroughs, defines a number of priority areas on the basis of need (Community Action Neighbourhoods). In each neighbourhood, the Mayor would assist the local community in establishing a citizen-led local Joint Action Board (JAB) with partners which would agree the local priority unmet needs together with the actions and outcomes to be achieved over a 5-7 year programme; it would administer, deliver, monitor and be publicly accountable for the programme in a way that ensured the involvement of smaller voluntary organisations. The Mayor would also realise new and imaginative funding mechanisms to support this new approach. Papers for the statutory providers, the corporate sector and the voluntary and community sector itself will follow shortly.

Ines Newman is an Honorary Visiting Senior Research Associate at the Department for Politics and Public Policy at DMU and a core member of the CURA team. Ines is a leading expert in local government and public policy and a trustee of the Paddington Development Trust. Her recent book ‘Reclaiming Local Democracy‘ sets out the principles to inform a progressive future for local government.

 

Workshop on Austerity and Local Economic Development in England: Mapping a Research Agenda

abuaro01

The Centre for Urban Research on Austerity (CURA) at De Montfort University (Leicester)  is holding a two day workshop on May 16th and 17th 2016 that will bring together leading academics to discuss the future research agenda around local economic development and skills in England.

One of the main pledges of the Coalition Government and its Conservative successor has been to ‘empower’ local communities to develop bespoke initiatives that can drive local economic growth, expand employment opportunities and help address sector and regional imbalances within the UK economy. As part of this ‘new localism’, Local Enterprise Partnerships (LEPs) have been established which bring together local authorities and business leaders to take forward this agenda. Government policy has also placed ‘cities’ and ‘city-regions’ at the core of its approach, brokering a number of ‘City-Deals’. These policy initiatives come at a time of austerity, with substantial cuts to public spending and local authority budgets.

From the outset, LEPs courted controversy, with many commentators highlighting problems of ‘inadequate resources’, ‘uncertain accountability’ and ‘varying capacity’. Since then resources have been stepped up and the dust has now settled sufficiently to permit a fuller assessment. One issue concerns how LEPs might link skills with economic development. For many years, government policy in England has emphasised skills as being central to economic competitiveness, productivity growth and social inclusion. Some commentators, however, argue that narrowly formulated policy interventions aimed at boosting skills supply often fail to address problems of weak employer demand for, and usage of, skills. Indeed, evidence indicates that the UK has serious problems with ‘over-qualification’ and the under-utilisation of skills, which often have a spatial dimension. Skills policies are likely to work better where they are joined up, and integrated within, a wider suite of policies around economic development, business improvement and innovation that impact on employer demand for skill.

If an integrated approach to skills is to emerge locally, then LEPs are a key mechanism. Much is likely to depend on their ability to engage local businesses and mobilise employer action around skills, an area that has proven to be challenging in the past, as well as build constructive partnerships with education and training providers. The hope might be that this approach would not only allow skills provision to be better tailored to local economic needs but would also be able to raise employer ambition around skills by effecting change in competitive strategies and approaches to work organisation, job design and people management. With all actors – LEPs, councils, employers, education and training providers and individuals – facing austerity, there are many challenges as well as questions. Will local actors be given the resources, freedoms and flexibility to deliver on this agenda? Will employers buy into this? Will policy commitments to ‘localism’ and ‘decentralisation’ be hamstrung by cultures of centralisation within Whitehall departments? Is power really being devolved or just responsibility for cuts? Will local actors find spaces for new, innovative and creative approaches that can be extended and built upon? How all of this will play out remains unclear. What is certain, however, is that there is an exciting and important research agenda here for workshop participants to engage with.

Speakers: David Bailey (Aston University), David Beale (Sheffield University), Gill Bentley (University of Birmingham), Crispian Fuller (Cardiff University), John Harrison, (Loughborough University), Martin Jones (Sheffield University), Ewart Keep (Oxford University), Andy Pike (Newcastle University), John Shutt (Leeds Beckett University), John Tomaney (University College London), Chris Warhurst (Warwick University)

If you are interested in attending please send an email to Suzanne Walker (swalker@dmu.ac.uk) to register your place.

Managing Capitalism in Latin America: the Decline of the ‘Pink Tide’

abuaro01

Following over a decade of relatively high growth rates wedded to redistribution, increased social spending, and the incorporation of labour and social movements into the wheels of decision making, consistent electoral success of the political Left in countries as diverse as Chile, Brazil, Ecuador, Bolivia, Argentina, and Venezuela had given the progressive ‘Pink Tide’ a growing sense of permanency. Latin America  has been heralded by many on the Left – most prominently in Manuel Riesco’s concept of the Developmental Welfare State – as a new model for development that breaks substantively with the neoliberal consensus.

But beginning with the economic and political convulsions in Brazil centred on a deepening corruption investigations linked to the ruling Workers’ Party (PT) and a widespread middle-class dissatisfaction with the government of Dilma Rousseff this is being increasingly shaken. The language and practices of austerity have begun to re-emerge in these states, with Brazil, the largest economy in the region, taking the lead in reducing social spending, unemployment protections, and taxation in a strategic re-orientation in favour of powerful business interests that began as early as Rousseff’s first government after 2012.

The unexpected electoral victory of conservative former businessman Mauricio Macri in Argentina has reinforced the growing clamour that proclaims the end of the informal progressive regional coalition. The first non-Peronist leader to gain office through democratic election since 1983, Macri has come to power with a mandate to address the “mistakes” of Kirchnerism through a new commitment to free-market economic policy. Despite assurances he will sustain some of the popular social policies previously implemented, he now represents the leading edge of the re-emergence of austerity practices.

The phrase “re-emergence” is used deliberately in these contexts as such restrictions on social spending, the rolling back of protections for labour, and the use of varied mechanisms of economic policy to promote regressive redistribution upwards to powerful firms and financial capital are all too familiar. Chile under the dictatorship of Augusto Pinochet 1973 and Argentina under the post-1976 military dictatorship and the disastrous economic stewardship of Carlos Menem in the 1990s, saw first-hand the deleterious impact of such a constellation of policy measures. IMF Structural Adjustment Programmes, most notably with Mexico in 1995, also consolidated this global counterrevolution in the region and the dramatic reversal of the “populist” redistribution and government spending strategies of the twentieth century.

The Pink Tide had ostensibly offered a peaceful interlude in these devastations, first of neoliberalism and now of emergent austerity in Latin America, as well as a return to the policies of redistribution and state support for workers. Backed by neostructuralist ideas and programmatised as strategies of neodevelopmentalism that sought to combine state-led development with an openness to international markets, progressive Latin American governments (from Lula Inácio da Silva and Dilma Rousseff in Brazil and Néstor and Cristina Fernández Kirchner in Argentina to Rafael Correa in Ecuador and Evo Morales in Bolivia) offered the possibility of growth with increasing equality, social spending to support the poor, and the genuine inclusion of the voices of workers and social movements in the politics.

Yet this distinction from the policies and practices that preceded and followed it have increasingly been shown to be deeply problematic. Alfredo Saad-Filho writing on Brazil has argued that despite the rhetoric of reform there has been little substantive change either to the political configuration of power (represented in the Constitution inherited from military rule) or in the hegemony of neoliberalism and concomitant international economic integration. On Ecuador, Jeffrey Webber goes further to argue that Rafael Correa, despite positioning himself on the radical edge of the Pink Tide alongside Bolivia and Venezuela, has deliberately demobilised the social movements that brought him to power, restoring economic power and privilege across sectors and actors that are the antithesis of his proclaimed project.

So, if not a progressive interlude contrasting the varying strategies of neoliberal and austerity capitalism, what does the Pink Tide and its neodevelopmentalist model represent? It would be too simplistic to dismiss it as a mere fraud. Evidence economic growth and redistribution in leading economies of the region does not bear this out. Declines in poverty through the famous ‘Bolsa Familia’ cash transfers to the poorest families in Brazil under Lula and the universal child support measures introduced by Cristina Kirchner (which Macri has at the moment vowed to retain) provoked a genuine redistribution of wealth towards the lower end of society. Attempts to reverse neoliberal reforms of education in Chile, the prominence of indigenous social movements in Bolivia, and environmental proposals in Ecuador also pointed to the opening up of potential new space for the redistribution of political power.

Instead, these measures must be viewed along a continuum of strategies aimed at managing capitalism. I have developed this line of argument in other areas of my research to date inasmuch as the varied progressive and regressive strategies that comprised the period of import-substitution industrialisation (ISI) during the twentieth century in Latin America represented distinct efforts to intensify exploitation and – most significantly – suppress and discipline labour to this end. The limitations and contradictions of the Pink Tide, identified elsewhere by a growing number of scholars, combined with the apparent ease at which the return to the practices and processes associated with austerity and the neoliberalism of the 1980s and 1990s, imply this progressive turn must be viewed through the same lens.

Significantly, it is by returning to the workplace, the space that at CURA’s launch event last month Phil Taylor described as the “front line” of austerity where managerial strategies seek to squeeze out maximum effort at minimum cost as the epitome of exploitation, that these contradictions can become most apparent. Alongside experience of the harsh disciplining of restrictive economic and social policies, the region has seen some of the clearest examples whereby relatively progressive developmental strategies have served to incorporate workers into intensified social organisations of production with increasing work rhythms.

The archetypical populist regimes of Getulio Vargas in Brazil and Juan Perón in Argentina serve as an important point of reference, offering an ostensible voice to organised labour whilst supporting a transformation of labour processes that deepened exploitative relations of contemporary capitalism – most obviously with the Peronist “Productivity Conferences” of 1954. More closely linked were the developmentalist strategies adopted by Arturo Frondizi in Argentina after 1958 and Juscelino Kubitschek after 1956, which sought to attract foreign capital through a liberalisation of trade and investment regulation that facilitated what I have referred to elsewhere as a “disciplinary modernisation” of industrial production.

In the same vein, the proclaimed progressive strategies of the Pink Tide have gone hand in hand with appeals to foreign investment across modern sectors, to the continued opening up of once-protected sectors to the rigours of international competitive pressures that reposition domestic firms in the global economy and impose regressive technological and organisational changes. It has even led to a return to ‘extractivism’ (most notably in Ecuador) associated with a bygone era of the nineteenth century widely critiqued by regional and international scholars. It is by analysing the changing relations in production of neodevelopmentalism and the Pink Tide, as well as the changes that have occurred before and after, that will make possible a comprehensive understanding of the management of capitalism and the interconnectedness of these periods of harsh restriction and ostensibly progressive social peace.

Dr Adam Fishwick is a CURA team member as well as Lecturer in International Relations at the Department of Politics and Public Policy, De Montfort University