“Whatever the restrictions they face, the choices councils make are political ones”

Manchester Town Hall. Image: Getty.

How we run local communities, what services are provided and by whom, are deeply political questions. The philosophical traditions of the two main parties in Britain differ greatly on state involvement at every level: national, local and international.

So I take umbrage when people try to divide politics neatly into pragmatism and ideology. This was the argument set forth by Claire Kober, until very recently leader of Haringey Council, and the woman at the eye of the storm over the Haringey Delivery Vehicle programme to build new homes and regenerate old council properties. There are already a million articles written on that topic, so I don’t intend to go into the rights and wrongs of the case here. What concerns me is the framing of politics vs pragmatism that Kober sets out.

It is certainly the case that the left can put unreasonable demands on Labour councils. Local authorities are severely hampered both by austerity and by overbearing central restrictions: few seem to understand this when calling for illegal budget setting or non-statutory services that are impossible to deliver without outside investment.

It’s the case, too, that the reason the system is close to breaking is the pressure put on councils by the extreme ideological cuts to their funding that have crippled them since 2010.

But the opposite of unreasonable is not apolitical. Whatever the restrictions they face, the choices councils are political ones. Claire Kober describes herself as a pragmatic socialist – but as such, the people who agree with her need not just to make the case for pragmatism, but to argue why their pragmatism is socialist too.

Equally, the MPs who have declared no confidence in Northamptonshire County Council need to explain how – under their government’s ‘devolved axe’ – they would do things differently in and for their county. If they believe in letting local government be freer, leaner and less dependent on central grant money, they need to make the capitalist case for that freedom, and the winners and – inevitably – losers that competition creates. How would their national vision translate to Northamptonshire, its local challenges, demographics and needs?

But unfortunately, across the board in politics, we give very little priority to the local. This means that in general, it is not politics that's missing from most conversations about local government, but politics at the right level. Too often, litmus tests on national or international issues decide who a faction of the local party will back when it comes to council selections. In Labour, a person's view on the Middle East might well trump their vision for local service delivery. For the Tories, it's their view on Brexit, not bins, that really matters.


Voters are often the same, punishing local politicians for decisions made by national parties, seeing council elections just as referenda on the government of the day or how they think the opposition is doing. The parties reflect this by running election broadcasts on national issues or national leadership. It wins them votes, so you can understand it – but more and more, we denigrate the understanding of what local government does, who does it, what they do it for and why.

Labour councillors are not making decisions about private investment because they are ideologically wedded to the private sector. They believe, as all socialists and social democrats do, in using the state to improve the lives of the people of their boroughs. They just believe that under current circumstances, the kinds of challenges they face need far greater investment than the government is willing to provide. So, they feel they have to look to the private sector to do so.

Equally, most of the left is not opposing these decisions because they want to stop new housing being built, but because they genuinely believe there are better solutions that don’t lead to a diminishing of public stock. They are willing to trade conditions likely to lead to short term inaction for a chance at better solutions long term.

As to the Tories, they believe that a reduction in state dependency is going to be good for people in the long term. And so, they need to make the case for how that works in areas that fall short as Northamptonshire has, instead of simply playing the blame game. The party of central government and the party of local government in Northamptonshire are the same. If these MPs want to make the case that the failure there isn’t a Conservative one, they will need sharper answers than simply devolving blame.

There may well be answers that speak to both short and long term radicalism. But to find them, protagonists from both sides of Labour’s factional debate or the Conservatives national/local split will have to adopt a better, more open, understanding of where each side is coming from. If local Labour Parties can drop the fights over national issues, it might be possible to allow their shared ideology to come up with a solution that serves their community best. If Tories can work together to support local government struggling to impose national cuts, they might find better ways of delivering at each level. There may well be compromises that can be found through imagination, local action and local knowledge – but to find them, parties will have to set aside their internal differences and do the hard work of agreeing strategy and delivering for the people who elect them.

We need to put ideology back into the local government conversation. As politics has become more ideological again, it is important that the parties are able to offer their communities fierce competition over what they will do for and with them. If Capitalism or Socialism don’t work locally, they can’t work nationally. Big ideas don’t have to be played out on big stages.

 
 
 
 

“Stop worrying about hairdressers”: The UK government has misdiagnosed its productivity problem

We’re going as fast as we can, here. Image: Getty.

Gonna level with you here, I have mixed feelings about this one. On the one hand, I’m a huge fan of schadenfreude, so learning that it the government has messed up in a previously unsuspected way gives me this sort of warm glow inside. On the other hand, the way it’s been screwing up is probably making the country poorer, and exacerbating the north south divide. So, mixed reviews really.

Here’s the story. This week the Centre for Cities (CfC) published a major report on Britain’s productivity problem. For the last 200 years, ever since the industrial revolution, this country has got steadily richer. Since the financial crash, though, that seems to have stopped.

The standard narrative on this has it that the problem lies in the ‘long tail’ of unproductive businesses – that is, those that produce less value per hour. Get those guys humming, the thinking goes, and the productivity problem is sorted.

But the CfC’s new report says that this is exactly wrong. The wrong tail: Why Britain’s ‘long tail’ is not the cause of its productivity problems (excellent pun, there) delves into the data on productivity in different types of businesses and different cities, to demonstrate two big points.

The first is that the long tail is the wrong place to look for productivity gains. Many low productivity businesses are low productivity for a reason:

The ability of manufacturing to automate certain processes, or the development of ever more sophisticated computer software in information and communications have greatly increased the output that a worker produces in these industries. But while a fitness instructor may use a smartphone today in place of a ghetto blaster in 1990, he or she can still only instruct one class at a time. And a waiter or waitress can only serve so many tables. Of course, improvements such as the introduction of handheld electronic devices allow orders to be sent to the kitchen more efficiently, will bring benefits, but this improvements won’t radically increase the output of the waiter.

I’d add to that: there is only so fast that people want to eat. There’s a physical limit on the number of diners any restaurant can actually feed.

At any rate, the result of this is that it’s stupid to expect local service businesses to make step changes in productivity. If we actually want to improve productivity we should focus on those which are exporting services to a bigger market.  There are fewer of these, but the potential gains are much bigger. Here’s a chart:

The y-axis reflects number of businesses at different productivities, shown on the x-axis. So bigger numbers on the left are bad; bigger numbers on the right are good. 

The question of which exporting businesses are struggling to expand productivity is what leads to the report’s second insight:

Specifically it is the underperformance of exporting businesses in cities outside of the Greater South East that causes not only divergences across the country in wages and standards of living, but also hampers national productivity. These cities in particular should be of greatest concern to policy makers attempting to improve UK productivity overall.

In other words, it turned out, again, to the north-south divide that did it. I’m shocked. Are you shocked? This is my shocked face.

The best way to demonstrate this shocking insight is with some more graphs. This first one shows the distribution of productivity in local services business in four different types of place: cities in the south east (GSE) in light green, cities in the rest of the country (RoGB) in dark green, non-urban areas in the south east in purple, non-urban areas everywhere else in turquoise.

The four lines are fairly consistent. The light green, representing south eastern cities has a lower peak on the left, meaning slightly fewer low productivity businesses, but is slightly higher on the right, meaning slightly more high productivity businesses. In other words, local services businesses in the south eastern cities are more productive than those elsewhere – but the gap is pretty narrow. 

Now check out the same graph for exporting businesses:

The differences are much more pronounced. Areas outside those south eastern cities have many more lower productivity businesses (the peaks on the left) and significantly fewer high productivity ones (the lower numbers on the right).

In fact, outside the south east, cities are actually less productive than non-urban areas. This is really not what you’d expect to see, and no a good sign for the health of the economy:

The report also uses a few specific examples to illustrate this point. Compare Reading, one of Britain’s richest medium sized cities, with Hull, one of its poorest:

Or, looking to bigger cities, here’s Bristol and Sheffield:

In both cases, the poorer northern cities are clearly lacking in high-value exporting businesses. This is a problem because these don’t just provide well-paying jobs now: they’re also the ones that have the potential to make productivity gains that can lead to even better jobs. The report concludes:

This is a major cause for concern for the national economy – the underperformance of these cities goes a long way to explain both why the rest of Britain lags behind the Greater South East and why it performs poorly on a

European level. To illustrate the impact, if all cities were as productive as those in the Greater South East, the British economy would be 15 per cent more productive and £225bn larger. This is equivalent to Britain being home to four extra city economies the size of Birmingham.

In other words, the lesson here is: stop worrying about the productivity of hairdressers. Start worrying about the productivity of Hull.


You can read the Centre for Cities’ full report here.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites

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