Posted by: davidjmarlow | 17/09/2016

What is the ‘Sunderland question’? And how might the May Government and local leadership teams answer it?

sunderland-question

Should Sunderland have asked a question to which it doesn’t know the answer?

I can’t help thinking that Sunderland’s pace of counting votes will henceforth come to be seen as a massive millstone around this proud city’s neck. As Sunderland delivered its BREXIT referendum victory shortly after the polls closed on June 23rd, a first highly symbolic indicator of the national BREXIT upset became apparent.

 

Over subsequent weeks and months, this symbolism has become framed as the ‘Sunderland question’. The proposition is that (a large part of) the BREXIT vote was driven by ‘failed places’. Cities like Sunderland and Southend, and rural areas like Cumbria and Cornwall, feel they have not benefitted from and have little stake in the Osborne/Clark local growth models of metro-city based agglomeration anchoring pan-regional powerhouses.

Theresa May’s apparent determination to address this question is a significant consideration within and alongside the high profile review of industrial strategy.

But is there really a Sunderland question in the terms in which the post-referendum debate has evolved? And if there is, what might the May government do about it?

The extent of UK/England’s grossly uneven spatial development over generations, decades, and individual parliaments, has been a primary focus of regional and local development since at least the 1950s. Following the 1980s transformation of London as a premier global financial and business services metropole, priorities for ‘rebalancing’ have focused on achieving comparable growth to London and parts of the Home Counties in regions and city-regions outside the Greater South East. More locally, priorities for regeneration have sought to address disadvantaged and excluded communities through a mix of physical, employment and community investment and support.

The Osborne orthodoxy to address these challenges emerged through the coalition period. Its narrative was overwhelmingly about growth. Community regeneration of place as a national priority was virtually absent. ‘Big Society’ disappeared early in the coalition period. National programmes for regeneration addressed ‘troubled families’ or other groups rather than fractured communities.

Under the 2015 Cameron Government, rebalancing through accelerated local growth had a conceptual underpinning in the New Economic Geography models of agglomeration. It had a form in the rush for establishing city region Combined Authorities (CAs) led by a directly elected Mayor. These were to collaborate in the North under a pan-regional ‘Powerhouse’ umbrella. It has an exemplar in Greater Manchester – backed by Government largesse, and increasing decentralisation of some powers and influence.

There is considerable scepticism as to whether the Osborne orthodoxy was conceptually robust. It was applied inconsistently and incoherently. And there are massive doubts as to whether it had the scale, focus and interdepartmental commitment to produce tangible and sustainable results.

Osborne and Clark attempted the ‘authentic karaoke’ of manipulating data to imply success. But GVA results for the coalition period to 2014 show that the two fastest growing NUTS1 regions by per capita indices were London and the South East; the two fastest growing NUTS2 sub-regions were inner London East and Outer London – West and North West; and the five fastest growing NUTS3 sub-regions were in London. In comparison, none of the core cities, nor any of the northern city region CA sub-regions improved their per capita GVA against the national average.

It is legitimate to argue that the Osborne orthodoxy was an inter-generational ‘project’, and it had not yet been fully implemented (with the first metro-mayors not even due until 2017). However, it is also difficult to envisage strong outcomes for ‘failing places’ from his approach.

His focus was on a small number of city metros capable of anchoring agglomeration, hosting prestige projects (whether backbone infrastructure like HS2 or global growth catalysts like National Graphene Institute). The modest scale and scope of overall local growth resourcing (e.g. compare LGF with Heseltine’s initial single pot ambitions) was unlikely to ‘trickle down’ to lagging cities and failing communities. The continuing embrace of annual ‘beauty contests’ (or even periodic devo-deal ‘gainshare’ reviews) also tends to mitigate against intermediate tier leadership teams (whether CAs or LEPs) structuring their narratives around tackling messy and chronic failure!

What are the options for May rebalancing regional and local policies from city region agglomeration to redressing and mitigating failing places?

For those sceptical of New Economic Geography and agglomeration-based models, there is at least some mileage in adapting the Osborne orthodoxy to give a higher weighting to small and medium-size cities. This is the ‘investing in success’ models without the critical mass of the largest metros.

Most mid-size cities and many non-metropolitan centres will have a small number of assets and capabilities of genuine international quality and competitiveness. In Sunderland, for instance, think Nissan and the University.

There are a number of small and medium city models of success that might be drawn on (if they were better understood) by centres outside the Greater South East. There are the Oxford and Cambridge university-anchored examples; the Milton Keynes and Peterborough ‘new cities’; Warrington and Cheshire East in the North West.

In Northern Europe and Scandinavia many non-metropolitan NUTS2 and NUTS3 have far outperformed most UK regions (including London and the Mets) in growth terms. Regions like Vastsverige (Goteborg), Groningen, Salzburg are of small or average LEP size, wealthier and faster growing than all England NUTS2 regions. There are many other non-metropolitan examples (even including Basque Country and Liguria in Spain and Italy) which might provide insight for this type of rebalancing. It may be politically embarrassing, but adapting EU ‘smart, sustainable and inclusive growth’ practice merits much deeper investigation.

Globally, Vancouver, Perth, Helsinki and other mid-size cities regularly put much larger metros to shame in terms of both liveability and economic performance.

One can argue all these examples as ‘special cases’. However, to take a region I know fairly well, there is no a priori reason why over the long run Exeter should not be the Cambridge and Plymouth the Vancouver of the South West! Might Sunderland/Nissan become more like Goteborg/Volvo?

If a new industrial strategy was to prioritise investing in success of medium-size, underperforming places, the changes to Osborne’s orthodoxy would be profound. This is not just a case of refocusing major infrastructure investments to connect ‘end-of-the-line’ cities (to their nearest metro and the global economy). There would need to be a sustained cross-departmental focus on environmental and human capital, assets and on revenue expenditure. National growth policies would have to be acutely place conscious – as opposed to largely place blind. Witness, for instance, how the current HE Bill gives the Office for Students no role whatsoever in driving turnaround in failing places, even if, in many of these towns, the local university is the most important and successful business/driver,

The impact on devolution structures and processes would also be huge. At the minimum devolution deals would have to seriously augment their narrative of how they were going increase national growth and share the dividends, with explaining how this was going to positively discriminate in favour of disadvantaged places and communities. The current turmoil in the North East Combined Authority – at least partly stimulated by concerns that Newcastle will be the major beneficiary of government patronage – illustrates how difficult this will be.

Undoubtedly there are huge difficulties with a modified ‘invest in success’ policy focused on small and mid-size underperforming cities. This is especially the case in the context of BREXIT negotiations where the small number of globally recognisable assets in these places will be cautious about long term commitments. This has already been seen in Sunderland with the JEXIT warnings.

However, for a Conservative Government the alternative conceptual approach, if anything, carries even more challenges. This would be policy driven by territorial and social equity goals and values.

It is difficult to envisage the Conservatives enthusiastically embracing such an agenda.

There remains extensive experience of community regeneration intervention strategies for skills, employment, enterprise, housing, environment, social cohesion and participation. But, a return to the pre-coalition era would be inadequate without a massive increase in scale, scope and focus of national resources. Could one imagine a May Government adopting programme architectures for significant public funding akin to EU structural and cohesion funds – another irony in current circumstances? And even if they wanted to, could adequate resources be made available?

It seems an economic solution to the Sunderland question will be extraordinarily difficult to craft and then achieve – especially if it is pursued at the expense of (Northern) metros rather than in addition to them.

This may be because, ultimately, the Sunderland question is not an economic one at all.

The correlation between BREXIT voting and poor performing places was distorted by Sunderland’s early declaration, and has always been grossly simplistic.

Some types of most successful non-metropolitan constituencies – for instance Milton Keynes, Peterborough, Cheshire and Warrington – voted alongside Sunderland. Even in London, Barking & Dagenham and Havering voted heavily for BREXIT. Neighbouring Redbridge and Waltham Forest – with much lower GVA per capita – voted heavily for REMAIN.

If correlation of BREXIT sentiment is not with economic failure, then it will not be addressed through a refreshed industrial strategy focused on underperforming places at all.

Much has been made of the immigration factor in voter sentiment. This was certainly a foundation of the LEAVE campaign, and is presented as the key policy choice in impending article 50 negotiations – i.e. freedom of movement or freedom of market access.

Yet it is difficult to frame the Sunderland question in these socio-cultural terms. On the face of it Sunderland’s future success as a city is more dependent than most on both freedom of market access (e.g. for Nissan and other industries), and freedom of movement (e.g. for international student access to the University). And Sunderland’s 5% non-UK and under 2% EU population is minimal compared to national averages over 14% and 5% respectively.

Once one strips away the economic, social and cultural symptoms of the BREXIT vote, one is drawn to the cause being fundamentally about failure of democracy and leadership – national and local.

McCann’s diagnosis of the UK ‘economic problem’ highlights the inability of the heavily over-centralised Westminster system to manage differing local and regional adjustments required by globalisation in three divergent, dislocated, decoupled economies – London and the South; Scotland; the rest (Midlands, North, Wales and Northern Ireland).

The strength and requirements of the London narrative distort top-down attempts at adjustment except (arguably) in Scotland. This centralisation has led to horizontal place-based failure, with emasculation of meaningful regions and parochial, territorial competition within and between city regions and non-metropolitan sub-regions.

McCann recommends radical constitutional reform – Devolved Administration, regional, and urban devolution – coupled with a major interregional fiscal equalisation formula (way beyond the Heseltine single pot proposals), as preconditions for solving the UK economic problem. In this respect, the Osborne orthodoxy was vaguely in the right direction as a starter, but much too ponderous. By comparison, the early May approach – of industrial strategy review with an add-on of concern for failing places – just doesn’t cut it at all.

I pondered prior to the referendum whether democracy is in terminal decline or just past its prime?

In Osborne’s first 100 days he took us back to the 1970s with his ‘flagship’ reinvention of Enterprise Zones. In May’s first 100 days, she and her three Brexiteers still cannot tell us what ‘Brexit means Brexit’ means. But her flagship reinvention has taken us back to the 1950s with her enthusiasm for new Grammar schools. There is added irony to this, given the two counties that retained the system – Kent and Lincolnshire – have relatively poor economic and education performance, high social inequity in that performance, and were two of the most solid pro-BREXIT areas in the UK. At national level, the democracy in terminal decline question is alive and kicking.

If there is a Sunderland question, it is about the need for transformational local leadership, radical democratic renewal and governance reform to convincingly address major societal challenges in a global economy. What we are seeing currently is implosion of the North East Combined Authority and devolution deal. I am not privy to the many back-stories to this episode, but I am pretty certain that transformational leadership, radical democratic renewal and governance reform does not feature positively in any of them! And in the absence of all three of these, it is difficult to see how Sunderland can fashion a successful future for itself in either post-referendum UK or in any post-BREXIT European and global economy.

I fear, by the time of the Autumn Statement, the Sunderland question under May will have become all too like the Schleswig-Holstein question under Palmerston – with answers understood by very few, and forgotten (because it is much too difficult) by the Prime Minister….

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Responses

  1. […] have written elsewhere on UK failure and the ‘Sunderland question’ of the BREXIT leanings of struggling places. However, for the purposes of this piece, it is worth […]

  2. […] David Marlow looked at this year’s referendum on the UK’s membership of the EU and considered how the “strength & requirements of London’s narrative distort top-down […]


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