Why Liverpool City Region needs the social economy’s inclusive growth

Dr Alan Southern is a Senior Lecturer in the the University of Liverpool’s Management School and Principal Investigator for the Social Economy for the Heseltine Institute for Public Policy and Practice

The social economy has a pivotal role to play in pursuit of inclusive growth in the Liverpool City Region (LCR).  We explained this to an audience that included the Shadow Chancellor of the Exchequer, John McDonnell, MP for Hayes and Harlington.  Our work on ‘The Scale, Scope and Value of the Liverpool City Region Social Economy’ allowed speakers at an event in the University of Liverpool’s Management School to present their ideas on new models to fight poverty, new forms of social investment and why organised labour is important to the debate on an inclusive economy.  A decade of austerity and the political flux of Brexit have manifest in the everyday experiences of people through their access to local public services and downward pressures on their work and living standards.  Understanding this is key to developing inclusive economic growth.

This is what makes the social economy so important now.  For example, there is increased demand on local services at a time when their availability is being reduced or removed altogether.  In our research in the LCR we came across the notion of a ‘fiscal cliff’ time and again.  This refers to how cuts in public spending, changes to the local government revenue base and an end to European Structural Funds will coincide around 2020.  It comes at a time when indicators around in-work poverty show local people increasingly dependent on local services.  A recent report by Liverpool City Council indicated over half of all households in one inner-city ward are dependent on council tax relief and of these, two-thirds are in-work households.

Wage stagnation is a national problem.  It has the effect however, of increasing reliance on local support and is one of the main reasons why an increase in dependence on food banks has grown.  Overall poor productivity in the city region hides the over performing manufacturing sector with advances in technology producing performance at 20% higher than other places in England.  Wealth is being created in LCR although it often ‘leaks’ away to overseas owners.  Meanwhile joblessness or insecure employment brings down the levels of wealth per person and this reduces the spending in the local economy by local people.  Austerity, in-work poverty and more precarious levels of employment have all become normalised in the city region.

It is the recently formed LCR Combined Authority that must coordinate plans to raise levels of inclusive economic growth working alongside the Local Enterprise Partnership (LEP) and of course, under the guidance of the elected Metro Mayor.  This process of devolution does offer some hope for local action and is one of the reasons why in recent months we have garnered the support of the LEP leadership and the Metro Mayor for our work through the LCR Social Economy Panel.  We have sought to show the local institutions here that the social economy can be shaped to support inclusive economic growth in the LCR and that it is a positive asset for the whole economy.  We have argued that we should coordinate the practice in the sector in a more strategic manner.

The narrative about the social economy needs to show how the sector contributes both social and economic value to the LCR by addressing those stubborn problems that persist.  For example, precisely because social organisations work with people who suffer most from the likes of austerity, impact can be made.  Working with local communities to increase health, raise levels of skills and get people into work will have a direct effect on productivity.  Raising the profile of inclusiveness, through working directly with marginalised groups, women, refugees, those with ill-health, mental health needs and so on, means that tackling matters of injustice and prejudice can be incorporated into an economy with a more socialised purpose.

This is where the LCR Social Economy Panel comes in.  Set up in 2016 the aim of the Panel is to influence policy and provide a coordinated voice for the sector.  By putting academics and their research at the disposal of practitioners, we can show why the social economy is important and how it can help shape a whole city region economy.  Our short term aims for the Panel are to:

  1. Establish a social economy champion, or champions, who can help position the social economy alongside other sectors that the LEP have determined as strategically important.
  2. Establish a strategic social investment pot that provides variety in the types and format for social investment that will enable social organisations to grow and encourage new start-ups.
  3. Coordinate the actions of anchor institutions such as local authorities, but also large charities and higher education institutions that help build new relationships and models of working together between the public sector and social economy. This will impact on the local multiplier.
  4. To market the LCR social economy in a way that showcases some of the work of social organisations here.

Longer term the Panel can encourage new forms of leadership to emerge from the sector and can seek to influence the locality in much the same way as the Chantier de l’économie sociale in Quebec.

As our guest speaker, the Shadow Chancellor, explained “You’ve really got something buzzing here that could be built upon…”  We would not disagree with such an assessment.  Our research has great potential to impact on the way we shape inclusive economic growth in the LCR.

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