Building an approach to the inclusive economies agenda

It is generally considered that ‘trickle down’ economics has not worked and targeted policies and interventions are required to improve the distribution of economic benefits. Clear and accessible definitions of what more inclusive local economies might look like can help to increase understanding of the aims of the inclusive economies agenda, build cultural change across councils, and explain how it differs to other approaches. 

Embedding inclusive economy policies across councils also requires it to be more than an economic development agenda, a core part of a council’s function. Procurement, planning and many other teams and functions in councils need to be able to understand the agenda, and how their work contributes to achieving these outcomes. This facilitates a shift in activity which requires a clear vision and leadership as well as evidence to build support politically and officially within councils, and across partners.

Several key facets of inclusive growth strategies emerge from the literature and policy reviews:

- They include accessible overarching goals which can help build consensus, such as “this Strategy will ensure that all of our residents can participate in and benefit from Manchester’s economic growth,” (Manchester) or “our ambition is for Leeds is to have a strong economy within a compassionate city (Leeds).

- Strategies are grounded in evidence about and an understanding of a place, its economy, and its challenges to inclusion, such as Newham’s Inclusive Growth Strategy.

- Strategies outline key principles which seek to address local challenges, like Leeds’ ‘twelve big ideas’.

- Key levers are identified, including those of direct control and those of indirect control, such as con-vening and influencing partners, such as Doncaster’s presentation of Inclusive Growth Drivers in its strategy and the roles for different stakeholders within them.

- Existing good work within the scope of the strategy is highlighted, such as in Manchester’s Local In-dustrial Strategy.

- Priorities are clearly articulated, such as Liverpool City Council’s five to six priorities under the six key aims of its Inclusive Growth Plan.  

While inclusive growth strategies vary strongly across the country, there are three levers which are most prevalent, and can be viewed to some extent as a starting point: 

· councils' role as a direct employer

· councils as commissioners and procurers

· and the convening power of councils. 

- A clear accessible definition of what building an inclusive economy means locally helps build consensus and understanding.

- Clear leadership can help build cultural change across councils and their many component teams and departments.

 - Specific strategies are important visions which help identify priorities, and developing them helps councils to identify which levers it can and will seek to use. 

Many councils and combined authorities are seeking to achieve similar goals. While not every intervention or policy will translate well to other areas, many can be adapted and be implemented in other places. Interviewees discussed the importance of learning from other councils and stakeholders, reflecting on limited capacity and seeking to act on the inclusive growth agenda as soon as possible.

Anchor institutions play a crucial role in helping councils increase their influence over the wider local economy. Working in partnership with anchor institutions can significantly increase the number of employees, the amount of goods purchased, the number of services procured, and the number of partners worked with in terms of pursuing inclusive growth. Councils have worked with anchor institutions to leverage their procurement spending, ensure staff are paid living wages, and provide employment opportunities. It is crucial for councils to identify who the anchor institutions are and seek to engage with them.

Overall, whether it’s working with other councils in two-tier areas or working with anchor institutions, building networks and channels of communication, alongside leveraging existing ones, can help align interests and ensure there are more actors and more capacity seeking to promote inclusive economies.

- Many councils are exploring this agenda and successful policies and strategies should be shared and adapted for other places. Some councils have forged explicit partnerships to learn from each other.

 - Anchor institutions are a key stakeholder for councils and should be extensively engaged as part of building more inclusive economies.

- Councils should map local anchor institutions to identify potential partners and seek to align interests on the inclusive economies agenda.

 - Councils have considerable convening power and influence in their local area, and some have used this to increase employment standards for example.

Evidence is crucial to designing inclusive economies, strategies and interventions. Local areas cannot build an inclusive economy effectively if they do not know precisely what their problems, and their assets are. This requires good data and the expertise to analyse it.

It is clear that councils do need much better-quality data. This could include better availability of established datasets at smaller geographies, and the exploration of innovative datasets, including new questions and data linking to administrative data. Councils do not have the resources to undertake large scale, localised data collection – and this is one area where the UK Government could support councils to create better, more impactful policies and interventions.

Evaluation is key in interventions. The inclusive growth agenda is a long-term effort – and strategies will have multiple iterations. Interventions and policies need to be effectively evaluated so that they can be improved with lessons learnt from what was successful and what was less successful. This also includes understanding the scale of impact from interventions, which is difficult to do given a lack of high quality, very local data.

In terms of metrics, there are many different approaches to capturing this. Some involve identifying measures of inclusion to accompany measures of economic growth, while others effectively weigh the value of economic output by the extent to which other social goals are met into single indicators. Other approaches include adapting existing measures of growth with additional information around place or population groups, and some are based on citizen’s understandings of inclusion.

There is considerable potential for working across areas to share evidence and impact analysis and many councils share work in this area, such as through networks launched by bodies such as the Inclusive Growth Analysis Unit.

As inclusive growth strategies are updated over time, they need to be based on evidence which reflects the existing situation in the local economy. Trend analysis is important as project evaluations and ‘data snapshots’ for understanding inclusivity and the local economy.

- Good data and analysis helps local authorities to identify their local economy’s unique assets and challenges, creating better policy.

- Regularly updating key information can assist in tracking progress against core goals. - Evaluating interventions and tracking progress helps to inform future policy design and local authorities have taken different approaches in doing so.

- While it is useful for local authorities to compare against national benchmarks on some measures, it can be more pertinent to explore ‘nearest neighbour’ analysis. This helps to isolate the effect of different areas of focus and interventions—rather than comparing progress to areas with completely different local economic fundamentals.