Here’s how Britain can radically decentralise its economy

Can we just blame this lot? The Bank of England. Image: Getty.

A “rigged” system, the “left behind” and the need to “level” the prospects of UK regions are not phrases you typical hear in the Tory lexicon – but the Conservative Party leadership contest has finally forced the candidates to think about tackling Britain’s economic divide. However, neither has found a way to tackle economy’s structural flaws.

The financial crisis and era of austerity may have magnified these structural problems, but the problems predate both. The UK’s economic performance, measured in terms of labour productivity, has been diverging from international peers and between UK regions for decades. The average British worker is now almost a fifth less productive than the average worker from the G7 group of advanced economies. UK workers also reside in a country that is the most regionally unequal in Europe.

Vague calls for billions to be spent on infrastructure by some candidates at least recognise this fact, but this policy addresses only one part of the UK’s economic muddle. Other issues, such as the UK’s low levels of R&D spending, weak diffusion of best practice across firms, pervasive skills mismatch, shackled local government, credit constrained SMEs, and myopic corporate governance are still as relevant today as they were at the time of the last leadership contest.

These issues cannot be addressed by one ‘silver bullet’ policy. However, there is a unifying theme: a concentration of political and economic decision-making in only a few regions, firms and institutions.

Framed in this way, the solution is simple: a coordinated effort to decentralise Britain.

Plans to decentralise have been proposed before: just ask Michael Heseltine, a previous failed challenger for the Tory mantle. However, these decentralisation plans have been limited in scale and ambition.

Decentralisation must be broader than a policy proposal. It has to become a governing philosophy that guides all policy making. That is the essence of my team’s joint-winning entry for this year’s IPPR Economics Prize.

Applying this philosophy to local government would mean policies that decentralise economic activity and political governance, empowering local people and reducing local business costs. A policy such as mobility funding, which helps households and businesses relocate to new regions, is one such policy within this framework that can encourage a rebalancing of growth.


A reversal of the UK’s regional inequalities will also improve social cohesion, re-legitimise capitalism, and guard against extreme alternatives that are destructive in the long-term.

Decentralisation can also be applied to the private sector. The wide disparity in productivity between the UK’s firms can be addressed by reforming intellectual property law, adopting a system of compulsory patent licensing and incentivising collaboration between firms. Decentralising firm-level decision-making can also reverse the culture of short-term profit extraction by ensuring that the views of employees and local communities are considered in corporate boardrooms.

The financial sector in particular will serve the economy better if it is more local and community-minded. For example, we propose establishing a network of community banks that will be more responsive to the needs of credit-constrained firms and less vulnerable to global financial shocks.

All of these policies and the many more proposed in our winning report should combine as part of a ‘big push’ that can truly achieve inclusive prosperity.

Crucially, a blueprint for decentralisation will only transform the UK economy if it is adopted wholesale. This requires clear strategic leadership from Westminster, especially since implementation will be a long-term project that may straddle more than one parliament. In short, the next Prime Minister must resist the piecemeal efforts of the past and seize the opportunity to build a country that is more prosperous, less economically divided and less disconnected from decisions over its future.

Farooq Sabri was joint winner of the IPPR Economics Prize. The opinions expressed in this article are those of the author only.

 
 
 
 

How can cities become more bike friendly? The Netherlands offers useful lessons

(Aurore Belot/AFP via Getty Images)

It might seem like cycling is in the DNA of the Netherlands, a country where even the prime minister takes his bicycle to work. But the Dutch haven’t always lived as one with their bikes. In the Amsterdam of the early 1970s, cars were considered the wave of the future. They can be seen filling up squares and streets in historical photographs, and killed an average of over two Amsterdammers per week, including many children.

It is nothing more than an “accident of history” that the Netherlands embraced cycling, says Marco te Brömmelstoet, the director of the Urban Cycling Institute in Amsterdam and a man better known as the city’s cycling professor. Today’s bike rider’s paradise was created after parents and activists took to the streets to protest “child murder” by car. A Saudi oil embargo, rising gas prices, concerns about pollution and anger about the destruction of entire neighbourhoods to build motorways did the rest. 


Amsterdam, 1958. Not a cyclist's paradise. (Keystone/Getty Images)

What’s important about this history is that it can be replicated in other cities, too. Of course, the Netherlands has certain advantages – it’s flat as a pancake, for example. But in the eyes of traffic reformers, the rise of e-bikes (and even cargo bikes) means there’s no excuse for prioritising cars everywhere. 

So how can cities, flat or not, follow Amsterdam’s path to creating places where cycling is a pleasant, safe and common way to get around? The Dutch have some tips. 

Separate bikes from car traffic

Any city could start painting dedicated bike lanes on the streets. But in the Netherlands, those white marks indicating space for cyclists are considered just a minor first step. 

“A line on the road is not enough. Motorists will ignore it,” says Frans Jan van Rossem, a civil servant specialising in cycling policy in Utrecht. If other cities want their residents to choose bikes instead of cars when dodging pandemic-era public transport, protecting them from fast-moving car traffic must be the priority, Van Rossem says. 

The Dutch research institute CROW developed a widely praised design manual for bicycle infrastructure, full of tips for creating these protected lanes: A row of vertical white posts or a curb can serve as a physical separator, for example. Still, cyclists tend to feel safest in a "solitary" path, separated from the road by grass, trees, or an elevated concrete island. 

“The main bottleneck, the main reason why people don’t cycle, is that they don’t feel safe,” Van Rossem notes. “To start, construct separate paths.”

Turn those bike paths into a network

Many cities may have some bike lanes on some streets, but leave cyclists to roll the dice everywhere else. Will conditions still be safe when they turn left or right? Often they have to continue their way without any protected facilities for cyclists. 

“In many cases, cities take fast action, without thinking it through very well,” says Lucas Harms. He leads the Dutch Cycling Embassy, a partnership between the Dutch government and several companies, which promotes Dutch bike knowhow globally. “Don’t build small pieces of bike lane from nothing to nowhere. Think about a network of cycling infrastructure.” 

Utrecht aims to have cyclists within 200 to 300 metres of a connected path anywhere in the city, Van Rossem says. Avoid constructing those paths in sketchy industrial areas, he warns. “A connection through an unattractive area may be fast, but won’t be used a lot.”

Embrace the ‘fietsstraat’, a street where bikes come first


On some streets, drivers have to give up their privileges. (Rick Nederstigt/AFP via Getty Images)

A peculiar Dutch invention called "fietsstraat" (cycling street) holds strong potential for the rest of the world, Kevin Krizek says. He’s a transportation professor from Colorado who spent three years at Radboud University in Nijmegen. 

On cycling streets, cars are “guests”, restricted by a speed limit of 30 kilometres per hour. Drivers are not allowed to pass, so cyclists comfortably dominate the road. In the Netherlands the fietsstraat is usually paved with red asphalt, to resemble a bike path and notify drivers of their secondary status. But creating a cycling street can be easy. “All you need to do is put signs at intersections,” Krizek says. The effect is revolutionary in his view. Drivers have to give up their privileges, and cyclists can take the lead. 

Some Dutch traffic experts worry the cycling street won’t work if a city doesn’t also have a robust cycling culture. In the Netherlands, drivers are aware of the perils of urban cycling because they too use bicycles. Moreover, Dutch cities use sophisticated “circulation plans” to direct cars away from city centres and residential areas, onto a few main routes. 

Without “calming” traffic this way, the cycling street could be a step too far, Harms says. “In a city like New York, where all roads are equally accessible and full, it’s better to separate bicycles and cars,” he says.

Redesign intersections for cyclists' safety

If cyclists have to cross intersections “at the mercy of the Gods”, you’re not there yet, says Harms. When he travels abroad, he often finds clumsily designed crossings. As soon as cars turn, cyclists may fear for their lives. 

Harms recommends placing physical barriers between cars and bikes in places where they must cross. The Dutch build elevated islands to direct traffic into separate sections. The golden rule: cars wait behind bicycles. That way, drivers can see cyclists clearly at all times. Barriers also force Dutch cyclists to turn left in the safest way possible. They cross the street first and wait for their turn again before making their way left.

“You can create that with simple temporary measures,” Harms says. Planters work fine, for example. “They must be forgiving, though. When someone makes a mistake, you don’t want them to get seriously injured by a flower box’s sharp edge.”

Professor Krizek points out how the Dutch integrated cycling routes into roundabouts. Some are small; some are big and glorious, like the Hovenring between Eindhoven and Veldhoven, where cyclists take a futuristic-looking roundabout lifted above the highway. Most of those traffic circles move high volumes of cars and cyclists through intersections efficiently and safely. For a simpler solution, the Dutch manual suggests guiding cyclists to quieter streets – crossing a block up or down may be safer. “Nobody knows how to do intersections better than the Dutch,” says Krizek. 

Ban cars, or at least discourage them


A man rides down from a three-level bicycle parking garage near Amsterdam's main train station. (Timothy Clary/AFP via Getty Images)

The quickest, most affordable way to make a city more bikeable is to ban cars, says Ria Hilhorst, cycling policy advisor for the City of Amsterdam. It will make streets remarkably safe – and will most likely enrage a significant amount of people. 

Amsterdam doesn’t outlaw cars, but it does deliberately make their owners feel unwelcome in the historic city’s cramped streets. Paid parking is hugely effective, for example. Many car owners decide to avoid paying and use bicycles or public transportation for trips into the city. Utrecht, meanwhile, boasts the world’s largest bicycle parking garage, which provides a dizzying 12,500 parking spots.

To further discourage drivers from entering the city’s heart, Amsterdam will soon remove more than 10,000 car-parking spaces. Strategically placed barriers already make it impossible to cross Amsterdam efficiently by car. “In Amsterdam, it is faster to cross the city on a bike than by car,” Harms says. “That is the result of very conscious policy decisions.”

Communicate the benefits clearly

Shopkeepers always fear they will lose clients when their businesses won’t be directly accessible by car, but that’s a myth, says Harms. “A lot of research concludes that better access for pedestrians and cyclists, making a street more attractive, is an economic boost.”

Try replacing one parking space with a small park, he recommends, and residents will see how it improves their community. Home values will eventually rise in calmer, bike-friendlier neighbourhoods without through traffic, Van Rossem says. Fewer cars mean more room for green spaces, for example.

“I often miss the notion that cycling and walking can contribute a lot to the city. One of the greatest threats to public health is lack of exercise. A more walkable and bikeable city can be part of the solution,” says Ria Hilhorst. “But in many countries, cycling is seen as something for losers. I made it, so I have a car and I’m going to use it, is the idea. 

“Changing this requires political courage. Keep your back straight, and present a vision. What do you gain? Tranquility, fewer emissions, health benefits, traffic safety, less space occupied by vehicles.” 

Again, she points to Amsterdam’s history. “It is possible; we were a car city too.”

Karlijn van Houwelingen is a journalist based in New York City.