Existing centralised systems are least effective when tackling issues faced by people furthest from the labour market
We’re in a peculiar period of economic history. This year headline economic growth has gathered momentum, but those at the ‘bottom’ end of the labour market will hardly feel the benefit, and wages are still recovering to what they were worth in 2008.
At the same time, this parliament has enacted significant reforms to welfare for the unemployed and working poor. These changes mean that for the last five years households in the bottom 30 per cent of income are worse off – even once lower taxes are taken into account.
Up and down the UK, local authorities are increasingly taking issues into their own hands. In local economies that are both booming and struggling, the local government response to the peculiar years has been a newly invigorated civic activism. The approaches that work best put the needs of citizens first, and use the power of partnerships to muster resources from locally engaged businesses and charities.
Today, for the first time, the scale of that work – as well as its financial value and its huge potential – have become clear. What is also striking is that UK councils are adopting ‘networked localism’ – agitating to determine their own future in collaboration across the country.
Launching at the RSA, a new study pulls together evidence from over 20 councils. We subjected three initiatives to economic analysis, to illustrate the gains of cooperative initiatives. We estimate that cooperative approaches could:
- Secure job outcomes for participants at between 25 per cent and 40 per cent less cost per person.
- Through business incubation, engagement, and providing integrated business support, drive small business growth that would create 90,000 jobs at a cost less than half that calculated for previous national programmes.
- See the value of developer contributions and commitments to employment and skills nationwide grow from £15m to £225m annually.
But today’s event isn’t about being cheerleaders and patting each other on the back.
Most of the government’s resources to create better labour market outcomes for citizens are centrally coordinated. Council leaders are speaking in an ever-louder chorus. They are lobbying to be given the power to implement locally designed solutions. Our review highlights what is already being done within the existing system, showing that ‘cooperative councils are innovating, not waiting’. As Lib Peck, leader of Lambeth Council argues:
“The same money would go much further if it were spent locally by local authorities who know the employment challenges in their patch”.
She wants a package of funding (including money for skills, employment and health) devolved in order to provide tailored packages of support to help those who are most excluded get into sustainable work. The evidence we assessed over the last six months points overwhelmingly to the conclusion that existing centralised systems are least effective when tackling issues faced by people furthest from the labour market.
When it comes to the business of government, we are in an era of frantic devolution deal-making. In this spirit, the councils are proposing that three new cooperative deals be struck by local authorities:
- A new deal with job-seekers, based on relationships with them as individuals
- A new deal with businesses, based on genuine partnership and quid pro quo
- A new deal with government, based on what works and trust
We should pay more attention to cooperative ways of boosting jobs, growth and business. Ultimately, devolution won’t provide a better deal for individuals unless they play a role designing and implementing such initiatives.
At their best, cooperative approaches start with this principle. Look out for cooperative councils to use new powers to target those who are missing out in the economic recovery.
Jonathan Schifferes is a senior researcher at the RSA, and led on evidencing the economic case for co-operative approaches to employment, skills and growth
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10 Responses to “The economics of co-operation: councils show valuable new ways to boost jobs and business”
Leon Wolfeson
Because some rich people have been allowed to get away with very low tax rates, and to free-ride on the back of the 99%.
(You’ll try and blame the poor, of course, and the disabled. To say the same old myths, when long-term unemployment was very low before the Coalition’s austerity. You also won’t mention those eeevil families which were once common among the middle class either – the one-earner family….you’re saying housewives are an “underclass”)
The reality is that in studies, most people don’t cut their work when a basic income comes along. (The exceptions being heavily pregnant women and 16-19 year olds in education)
They do launch a whole host of new businesses etc. because they can afford to take the risk of being entrepreneurs
Right wingers like UKIP’s Tim Worstall support a Basic Income because of that, and because it utterly destroys benefit traps. (Also, it’s an acknowledgement of technological unemployment, etc. – do google his article on it!)
So it’s hardly a left-only preserve.
Kevin Stall
And what does an underclass of families that have never worked and in some cases generational have to do with the 1%? Really reaching there. What the freeloaders are not receiving enough money for not working?
I blame the lack of a work ethic in the young. I worked all through education. Paying my own way. Either as a clerk or salesman or any job available. I even shoveled snow to earn pocket money.
Today people only want to work if it is something enjoyable to them. It is enjoyable to be able to afford the things you want rather than having a job that fulfills you. You take any job you can get. If that means pick apples that what you do. After you are working then you can try to switch over to your prefered job field.
It doesn’t matter if someone within UKIP thinks basic income support is a great idea. It is still a very bad precedent and will cause this nation untold problems in the future. If people think they have the right to receive money without working for it then history shows that dooms the nation to 3rd rate status. It ruins the economy and worst it ruins the society.
Leon Wolfeson
Well of course you use the athens-pot shard tactic of blaming the “Youth of Today”, as you try and not talk about the substantial proportion of non-workers.
Instead, you blame the poor for a few hundred households and call the poor “freeloaders”, just as I said you would.
That you think basically eliminating poverty and welfare traps is a bad idea, and that now having poverty will /cause/ problems, as you say that not paying the peons less and less of GDP will…oh, right, it makes like like the 3rd rate status you evidently want.
You’re ignoring the studies on Basic Incomes because you want cheaper labour. No more, no less.
Kevin Stall
Since I have no employees or pay anyone to work for me. I could care less about having cheaper labour. It doesn’t affect me. What does effect me is the idea that you pay people not for working but simply because they exist. No matter what some academic studies say it can not be a good thing to encourage people to expect to be given anything just because they exist. People need to learn that money doesn’t grow on trees and that the government doesn’t exist to provide for them. That they need to do something to provide for themselves. They put themselves in a 3rd rate status. The way to eliminate poverty is to provide meaningful employment for everyone. Whether it is picking up trash on the road or helping the elderly. There are also studies that show providing for people just enlarges the poor numbers and makes them worse off.
Kevin Stall
In order to cut your work you have to be working to begin with. And we currently have how many million that aren’t working. And how many billion will a Basic stipend costs initially? And then how much will it cost in 10-15 years? You are not talking about a one time cost but an continuous expense that once started will continue to increase until it has a crushing effect on both society and the economy. It actually increases the need for austerity because a government can not just spend money they do not have. They will fail and fall leaving everyone in misery. With the poor actually being worse off. Money can not just be printed or taxed into existence.