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Understanding How to Support a Local Economy

These notes are summarised from the Key Findings of the Economic Scrutiny Committee Short Scrutiny Study – Economic Regeneration; Welsh Case Study: 1994 – 2003

Neighbourhood decline refers to the process by which areas become disadvantaged and includes environmental, social and economic factors. Neighbourhood renewal aims to reverse this process, improve the quality of life and attract people back into declining areas.

welsh economic regeneration

Economic regeneration is one aspect of neighbourhood renewal; the Committee agreed the following definition:

Economic regeneration aims to strengthen the local economy and create wealth by tackling ‘worklessness’ a term used to include people who are unemployed, economically inactive or actively out of work and promoting job creation. It aims also to change behaviour, encouraging and supporting local people to become more entrepreneurial.

It is important to be clear and consistent about the definitions used for economic regeneration, worklessness and overall neighbourhood renewal as these set the priorities and parameters for operational practice. Economic Regeneration includes actions designed to prepare and assist potential employees for work (supply) and actions designed to increase the demand for employees (demand).

 

It can occur as a series of ad hoc initiatives, projects or actions. Economic Regeneration works most effectively within a strategic framework, which is best offered via Economic Regeneration Strategies, Employment Strategies and Worklessness Strategies.

To be effective and to create sustainable and inclusive communities, Economic Regeneration needs to complement social and environmental regeneration initiatives.

It can therefore be difficult to completely separate out economic regeneration, particularly the indirect aspects of neighbourhood renewal that assist economic regeneration. Regeneration initiatives ultimately fail if there is a lack of linkage between environmental, physical development and economic regeneration, which benefits the socially excluded.

Economic development, growth and investment can fail to assist local economically inactive residents and thus is not the same as Economic Regeneration. Employment and Worklessness Strategies can assist in ensuring that there is greater participation by local residents in the local economy. The need to include all the communities of an area in economic growth and development is critical to achieving regeneration.

Central to the success of projects is to tackle local economic inactivity. This can be done by wider economic regeneration and development activity but to be truly effective and inclusive will require schemes and initiatives deliberately targeted at the most deprived and excluded communities.

Recommendations Clearly define and state which Executive Member and senior officer is responsible for Economic Regeneration in order to ensure that proper focus is given to strategies and operational practice and to help raise the profile and importance of economic regeneration across the corporate body.

The Government and Council’s vision, aims, objectives, and definitions for economic regeneration needs to be clarified in order to provide a clear and consistent strategic framework that assists with prioritising resources and directing operational practice, corporate working and partnership working.

Similarly, clarity is needed regarding the interface between economic regeneration, social and environmental regeneration as well as clarity regarding regeneration in key strategic locations in order to assist the development and implementation of economic regeneration programmes and initiatives. Development of a SMART action plan and Policy Statement for mainstreaming and embedding Economic Regeneration within the council.

philips curve

Ensure that the Economic Development Strategy and Neighbourhood Improvement Plan and their respective action plans support and reinforce the vision, aims, objectives and definition of economic regeneration with outcome based targets and performance indicators. The continuance of lobbying of central government to address funding issues to ensure adequate resources are available to develop and coordinate a regional approach and similar initiatives.

Assessment of implications for local economic regeneration of the impact of changes to European funding regimes and develop an action plan to ensure that the Council, across the corporate body, maximises all available resources (and the flexible use of these) for local economic regeneration.

Support bids to provide additional Local Training and Enterprise Centres. Similarly, working with regional partners and agencies to ensure that the area is fully benefiting from regional regeneration programmes, skills training programmes, skills training programmes and investment programmes.

Work with partners to deliver a Worklessness Strategy which contains supply and demand activities; provide a strategic framework for existing and new activities; and to ensure these are sufficient, specific industry targeted training services including customer services, hospitality, tourism, construction and ICT skills. Ensure that employment opportunities are available following training for example in areas such as plumbing, electrical and carpentry.

Tackle the barriers to work including the need for a good provision of childcare services accessible to all, the need to tackle second generation unemployment and attitudes and behaviours associated with this, and the need to target the hard to reach groups. Work with partners to ensure that the programmes being developed to invest in and up-skill local people actively targets the economically inactive residents.

Ensure that that the Recruitment Policy and Procedures includes consideration of the possibility of expanding the use of the Council’s recruitment to address economic inactivity. Ensure that the Sustainable Procurement policy encourages local economic regeneration via providing clear guidance to service areas on appropriate phraseology and application of social clauses, including use of local labour with appropriate banding to indicate locality and use of materials sourced and constructed in the region. Ensure that all service areas are given guidance regarding how to effectively incorporate local economic regeneration into negotiations with developers and ensure agreements are appropriately phrased.

What is Economic Regeneration ?

The Committee used the following definition of Economic Regeneration: Economic regeneration aims to strengthen the local economy and create wealth by tackling worklessness a term used to include people who are unemployed, economically inactive or actively out of work and promoting job creation.

It aims also to change behaviour, encouraging and supporting local people to become more entrepreneurial. Possible priorities for economic regeneration are: employment for all, improving employment rates, helping the hardest to reach into work and building a stronger local economy.

These can be achieved by various means, including specific programmes that include skills and training schemes, business start up and support projects, as well as wider programmes encompassing growth areas such as tourism, culture and creativity projects.

Ultimately, the aim of economic regeneration is to complement social and environmental regeneration schemes, creating sustainable and inclusive communities and tackling social exclusion.

Economic Regeneration may occur as a series of ad hoc initiatives, projects and actions, as part of a wider scheme encompassing all aspects of regeneration or as part of a planned programme for economic regeneration.

There may be a specific strategy for Economic Regeneration, an overarching strategy that incorporates economic regeneration or a series of separate strategies that touch on economic regeneration. Research by Professor Michael Campbell (Leeds Metropolitan University) has highlighted that general economic development, growth strategies and inward investment do not necessarily ensure that the jobs created go to local people who are unemployed.

Instead, economic development can result in structural changes that initially exclude more local people from jobs than they include, growth strategies and inward investment can result in widely differing numbers of jobs and all of these can result in commuters and immigrants benefiting from the new jobs.

Professor Campbell therefore stresses the importance of an ’employment strategy’ to help to ensure that the jobs created go to local people who are unemployed.

urban map

These vary according to the characteristics of local labour markets depending on whether they need more supply actions (helping to prepare and assist potential employees for work) or demand actions (actions aimed at increasing the demand for employees) or a mix of these. An initial review of Employment Strategies concluded that to be as successful as possible, they needed to tackle both supply and demand.

The evaluation also highlighted that many of the jobs created by the first raft of Employment Strategies either did not go to local residents or ‘creamed off’ those best placed to achieve employment, leaving those ‘furthest away’ from the labour market as disadvantaged as before.

A review of actions to help tackle worklessness shows they include action to tackle both the ‘supply side’ and the ‘demand side’, as follows:

Supply Side:

  • Increasing access to employment by improving transport links and providing accessible childcare
  • Increasing skills base by providing education and training
  • Helping the ‘hardest to reach’ into work
  • Improve support services to lone parents
  • Increase support to ‘second generation’ workless
  • Deliver support services differently e.g. via libraries, employment support centres, mobile job support centres
  • Providing intensive outreach and support to help overcome a culture of worklessness

Demand Side:

  • Challenging employers behaviour e.g. why aren’t they interviewing unemployed applicants
  • Encouraging a suitable infrastructure to support new job creation e.g. transport, housing choice and access to good quality services
  • Providing accommodation for new business
  • Attracting and creating new jobs
  • Encourage business start-ups
  • Providing business advice and support
  • Forming a partnership with local employers
  • Providing access to broadband

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