ERDF and Local Strategies

The general feedback being given to LEPs on their draft Local Strategies is that many of these have been too similar and generic, too much ‘of a type’. To some extent this is understandable. ERDF itself is quite prescriptive in terms of what is eligible for funding, so a local strategy that, say, focused on improving bus routes would not get very far at all.

Also, the strong focus for ERDF in 2014-2020 on SMEs, low carbon, and innovation sets down some new constraints. In my view this is good, in that it challenges areas of high unemployment not just to keep running the ‘same old’ projects, sometimes even for the ‘same old’ beneficiaries.

So, it seems too many of the local strategies have started out with some local statistics but then go on to suggest generic, boilerplate solutions.

CLES have usefully analysed and commented on a range of LEP strategies, and especially on the worrying degree to which there is a lack of social inclusion so far in quite a few of the strategies. As they comment, some strategies are purely economic and take the approach that ‘a rising tide will lift all boats’. Well, we know too well that some boats all too often get left behind, stuck and forgotten.

The Leader of Manchester City Council, in his last blog before the purdah of local elections, makes the point that the persistently high levels of unemployment in disadvantaged communities still needs more effort and solutions, especially for those people who are furthest from the labour market.

And in my view this points to a weakness in a lot of local strategies. It is very easy to focus on employment sites, rather than on communities. So, for example, a new supermarket is about to open, so there is joint working to ensure that as many jobs as possible go to local residents. Which is well and good, and we all pretty much know how to do this by now. We also know in our bones that, too often, many of the new quality jobs will miss local residents completely and get taken by commuters from, bluntly, the posher areas. Is there another way?

What is so much harder to do is to start with community X. Very few strategies actually know the details of the jobs that people already have in community X. Nearly all employment analysis we do is based either on very large travel-to-work or conurbation areas or is based on the workplace itself. The best source of community-based employment data is probably held by HMRC, which at the moment is mostly forbidden by law from sharing their data – even with other departments within government. HMRC consulted last year on how they might better share data, of course with strong ethical and privacy safeguards. That consultation gave a flavour of HMRC’s deep frustration with an example where they could not share data with the health authorities in Wales even though that could have reduced the number of winter deaths of elderly people.

HMRC data will be able to say, for any postcode, ward, output area, etc, — how many people who live here are working, where, doing what, for how long, and for how much. And it will only be by digging into this type of very local community-specific data that we can start to design and support those projects, interventions, which will make a difference.

However, we cannot wait for a change in the legal powers of HMRC, so we need to devise other cost-effective ways to collect rich knowledge on employment at the community level.

I think we are in for a few surprises. I hope so. I would love to find out that, for example, in Beswick or wherever there is a strong skills set in model making and repairing. Maybe this is clustered around a club of retired steelworks engineers who, along with an interested technology teacher, have passed on the skills and contacts to a new generation, who are now using the internet and post office to supply enthusiasts overseas.

And what they don’t need most from ERDF is a job trial at the local supermarket.

Was there more funding for the voluntary sector during the 1980s than today?

NCVO, the National Council for Voluntary Organisations, has published figures which show that the voluntary sector has lost £1.3 billion in funding from the government in the last year (link below). The gap was filled by a rise in private donations from individual people.

NCVO’s figures of income for the third sector started being collected in 2000/01, and this year just finished is the first since then where the income from government grants and contracts has fallen.

I wonder how these figures would compare with the 1980s? In 1988 the Commission for Racial Equality commissioned GMCVS to produce a paperback guide on funding for BME groups. It was my pleasure to write that book. Below is a link to a PDF copy.

OK, it was qualitative not quantitative – the book listed all the sources, not the amounts available. But it listed a wide range of central and local government sources of funding, including government agencies such as the Equal Opportunities Commission, the Manpower Services Commission, the various urban Task Forces, the strands of the Urban Programme, and many more.

So I personally would not be surprised to be told that, in real terms, there was more funding for the voluntary sector from all government sources in 1988 when compared with 2014. Have a look for yourself.

BOOK: FUNDING – a handbook for ethnic minority groups in North West England – 1988 – ISBN 0-9513921-0-7

News item: NCVO: http://www.thirdsector.co.uk/go/news/article/1288858/latest-uk-civil-society-almanac-shows-voluntary-sector-shrinking/

New Economics – alternative models to crash, boom and bust.

Crash, Boom and Bust may sound like a punk band that never quite made the big time. But in economics, unfortunately, they are still on a world tour.

I’ve blogged before on the new ideas in economic theories, and the efforts of students at the University of Manchester to get official recognition for these new approaches by having these ideas taught as optional modules on their course. As The Guardian newspaper reports today (link below) one year on, these new ideas are still facing some academic resistance.

The classic example is that road accidents are economically “good things”. More work for car repair garages. More work for doctors and nurses. More work for the police. Everyone is a winner, according to traditional economists. Except the people who were in the car, cycling or crossing the road, but their awful experience literally doesn’t count, because it puts no new money in the till.

And therefore new economics also looks at and counts factors such as environmental degradation, inequalities, development, fair trade, fuel poverty, food banks, and the value of nurturing and caring.

So well done to these students for persevering with trying to broaden a course, hopefully one day preparing the next generation of economists to be able to do more than just get jobs running last year’s Excel spreadsheets for a merchant bank.

Link: http://www.theguardian.com/commentisfree/2014/apr/07/uk-universities-alternative-economics-models-post-crash-society

Prospects for Direct Trains from Manchester to Paris with the postponed link between HS1 and HS2 in the Higgins Review

This week has seen some important statements about the proposed linkage between HS1 and HS2 linkage being scrapped, or at least postponed. I have been writing about a possible direct service between Manchester and Paris since 2007, and I consider the planned link to be important. However, we need to remind ourselves that we already have a link between HS1 and the West Coast Main Line.

I can understand why the Higgins review took the decision on removing the link from the first phase of the construction of HS2, and I would suggest the main factors are:

1. To maintain cross-party support for HS2 by removing a £700m element. This removal shows that fears about cost overruns are being taken seriously. The “no blank cheques” statement by the Labour Party was in fact a relief after a few worrying weeks where it looked like support for HS2 might be given up entirely as a public statement of strong future control of finances.

2. To extend the first phase of construction to Crewe. This is a massive reassurance to the north of England that the first phase of HS2 will not just be used to connect the Midlands to London and then stop. The worry is that any government will keep putting off starting the second leg to the north of Birmingham. The great logic of Crewe is that it isn’t too big a step nor too large a project to finish the lines to the north.

3. To reassure communities living around Euston that large-scale housing demolitions were not going to happen. While the impact of HS2 in rural areas receives a lot of coverage, the bulk of the housing upheaval actually could happen within London. The new track layout in and around Euston station is still unsettled, so discussions of a link to nearby St Pancras are premature. Crucially, it depends on two decisions: how much expensive tunnelling is done, and to what extent Euston becomes an East-West through-station rather than remaining only a North-South terminus.

So, while the removal of the link from the first phase of construction is symbolically disappointing, it is also understandable. It is not a show-stopper in terms of direct trains from Manchester through the Channel Tunnel to the continent of Europe. The published business case describes how such services could run now.

And extra time should allow for a better designed link. As Boris Johnson, Mayor of London, told Construction News (26 March 2014), “trying to get these high-speed trains to dicker over the existing tracks in north London and then join up with HS1 wasn’t the right way forward. HS1 and HS2 need to be joined in a tunnel and that will eventually happen. David [Higgins] was right to say that in the first phase, don’t do the HS1/2 link as it’s currently on the table, because there’s no point. It’s bad news for transport in London and it’s not the right scheme.”

HS2 won’t link to HS1 – north of England cut off from Channel Tunnel again – repeat of Regional Eurostar fiasco

The BBC is reporting that HS2 will not connect to HS1, depriving the north of England from direct trains through the Channel Tunnel.

20 years ago another Government did the very same thing, withdrawing the planned Regional Eurostar service. It sold the trains to France and Canada, and closed down the depots.

For the full timeline, see the last page of the document linked below. This report also shows that it is possible even today to link Manchester to Paris – all the technical details are there for any sceptics.

http://www.bbc.co.uk/news/business-26717518

Download: Innovation in Manchester to Paris Overnight Rail with Existing Resources (PDF)

night trains manchester to paris 2012

A budget for construction, and disenchantment with current volume house builders

Today’s budget statement focused on construction, with an ambition to see a further 200,000 new homes being built.

But behind this number it seems there is a disenchantment with the volume house building firms. We see new money for Right to Build, to encourage public bodies to sell land at a market rate to self-builders. We also see a new fund to encourage more activity by SME builder-developers.

After all, Ebbsfleet in Kent is essentially the public sector giving a stutteringly slow rate of private sector house building a kick in the pants, to be blunt.

It has been noted that, on the European Continent, it is commonplace for people to directly pay a builder to create their bespoke house. Less understood is that a lot of these new homes are essentially chosen out of a catalogue, then delivered to site in modules direct from factories, and assembled to very high standards in just a few days by trained teams from the same factory. There was a rare example of this shown in the UK some years ago on the Grand Designs TV programme, where the new home and team came on lorries from Germany.

Frankly, until we get comfortable with offsite manufacturing of modules and panels, and with integrated manufacturing and assembling, then self-builders, or rather self-developers, in the UK will remain a minority hobby. The first firm to achieve this at scale will boost UK manufacturing as well as construction, and the first conurbation to assemble this new economic cluster will steal a march on others areas.

Any takers?

Back from our travels

We’re now back from 8 weeks in Tenerife, avoiding the worst of the severe strains of the UK winter. We added to our enjoyment with Spanish classes on the terrace, taught by a young Russian woman in a small class including Germans, Austrians, Dutch and Finns. As usual, we stayed at Mar y Sol in Los Cristianos and met up with many friends from previous visits, both staff and guests.

One of the highlights was having a haiku (poem) retweeted by Jack Munroe – *fame*. It received a large number of views via LinkedIn as well. What is new is how most people come to the blog via Twitter. The second most common route to the blog is via search engines, and dear old LinkedIn is dropping to third.

The next book is 14k words in, and I am now being followed by the EU Commissioner for the Regions and by BIS in the UK. As ever, in the blogs I am following a professional line of being honest and ethical while not breaking confidences. Recent topics included reducing carbon emissions and on housing economics.

However, the most read blog so far this year is on press reports of rumours that the planned connection between HS2 and HS1 will be axed. This relates to one of my dear lost causes – promoting the idea of an overnight train between Manchester and Paris. One day… 🙂

Happy March everyone.

Will economists and social scientists ever speak the same language about housing?

I ask myself this question when I write about housing as a ‘commodity’. It does seem at times that economists and social scientists, allegedly sharing the same academic faculty of the Humanities, are destined to speak at cross purposes. Which, for clever people, seems a bit odd.

A social scientists reads ‘commodity’ as a bad thing – it is a public good which has become privatised, such as having to pay a toll or fee to go across what was previously common land.

But an economist talks about commodities as products which used to be an expensive and famous brand but are now being made very cheaply, which for most people is a good thing. Current examples would be DVD and MP3 players. It also covers goods such as milk, potatoes, eggs, where there is virtually no brand power.

An alternative phrase to commodity would be talk about housing as a ‘utility’, but we run into the same terminology problems as above because of the current culture of privatisation, at least in the UK.

OK, slightly interesting, but does this really matter?

Yes – just consider the difference between the cost of housing and the price of housing. The average UK purchase price for a family house is now around £250,000. But the cost of building that family house is much less. Most building firms keep this figure a commercial secret, but with economies of scale and using more modular offsite manufacturing of the complicated rooms such as bathrooms and kitchens, a house build cost of under £60,000 is perfectly feasible. The big difference between price and cost is made up from sales, tax, land and profit.

Up to 2008 when house prices were rising rapidly, central and local government benefitted from extra tax income, and the private sector benefitted from growing land receipts and from profits through sales, but mostly based on private credit. Of course, the housing market is different now, especially outside of London and the south east of England. And linking affordable housing to employment is now a significant challenge across the UK, where it is often a stark choice of one or the other but not both.

But, if by housing as a utility or a commodity we mean that it should be cheap and affordable, then now is the time to look at new models of delivery. This could probably start in the social housing sector because prices and costs can be more readily controlled. It would involve a long-term switch of funding from revenue to capital, from Housing Benefit towards house building. It would also impact on the housing market generally, reducing upward pressures on private rents and purchase prices. It would look at economies of scale, possibly by consolidating social housing building micro programmes at a city or regional level, using a client-managed consortium of suppliers to balance the risk of non-delivery.

Alongside house building, the significant amounts of empty property could be incentivised back into use by a market shift whereby empty property would have reduced income as an unused asset but significant income growth via rent. Higher taxes on empty property would help push this trend, as would lower taxes on rent.

So finally, perhaps economists and social scientists could agree that: yes, housing is already being used as a commodity, and the next phase is to make it an affordable commodity.

Disclaimer: private views, as ever. Tony previously worked at the Centre for Construction Innovation based in Manchester.

Britain now has fewer than 1,000 independent bookshops

Worryingly, the number of independent bookshops in the UK has dipped below one thousand. Those that manage to continue thriving are said to have diversified, working with schools and community hubs. The article below makes the economic case for sustaining High Street shopping, but I also think a good bookshop is a cultural and health necessity for any decent size town. Reading is good for people’s wellbeing. And in some places, the best range of books locally now is at the Oxfam shop.

www.independent.co.uk/arts-entertainment/books/news/britain-now-has-fewer-than-1000-independent-bookshops-for-the-first-time-since-records-began-9145189.html