14 Dec 2011
“Another world is not only possible… she’s opening a bakery round the corner”. Reflections on the Portas Review
I spent a fascinating afternoon on Monday at an ‘Economic Summit’ (nowhere near as glamorous as it sounds) for Members of South Hams District Council and West Devon Borough Council. The meeting was called to update councillors on the strategic thinking within the councils in terms of the economic development of the area and to hear their views on it. Three communities were invited to present to the councillors the work they were doing to regenerate their economies, and Totnes was one of them. What I want to do in this post is two things simultaneously. I want to give some reflections from that meeting, but also give a review of ‘The Portas Review’ (“an independent review into the future of our high streets”) which was published yesterday. Together they give a sense of the two deeply different narratives that were on show at the Summit, the dangers that their incompatibility presents, as well as the opportunities that emerge.
Narrative One. ‘Produce Economic Growth or Die Trying’
At the summit event, this was the narrative pushed by the (all-male) presenters from the Council as they unveiled their strategic plans and the new role of local authorities in the local economy. Most used term of the day? “Identifying barriers to growth”. Growth, so this narrative goes, is only being held back by ‘regulation’ and ‘red-tape’, and by a lack of spending on new infrastructure. The solutions we need are large scale ones. Tim Jones, chair of the Local Economic Partnership, waxed lyrical about Sainsburys building a new regional depot in the area, a vital piece of infrastructure and investment that will create jobs, the new £10bn Hinkely Point C nuclear power plant getting the go-ahead in the area was, he stated, “a project to die for”.
He talked about the different things that the area apparently needs, roads, more construction and so on, one of which was mentioned as “that whole debate about renewable energy” (funny, there wasn’t any debate around any of the other things). The next speaker stated that the councils have “some great credentials in the environmental sector” without stating what those actually were. This is all, we should remind ourselves, in a context now where sustainable development has been redefined as any development which sustains economic growth. The talk was all of “creating the conditions” for attracting businesses and of having a more “flexible” planning system (i.e. build what you like where you like). At events like that 2 years ago, the term ‘low carbon economy’ was banded about freely. Now nobody even mentioned it once.
Narrative Two. ‘Erm, we already have a vibrant economy thanks’.
Now here’s where it got really interesting. Even before we got to give our presentation, a number of the council members stood up to say that in the area, 65-85% of economic activity is already generated by small to medium sized businesses, the majority of whom employ less than 25 people. As one member said “why do we need a Sainsburys distribution centre? We have local grocers, local farmers, local processors, local markets. This will undermine, not support them”. These are the businesses that weather economic storms because they have nowhere else to go. They don’t make a decision to relocate and overnight throw hundreds of people onto the dole. They are the businesses that actually build a community’s resilience. They are the ones with the links to local farmers, local producers, local people, and to each other. They are the ones who care about that place, because they have to live there. What is required, one might suggest, is to stop undermining that sector of the economy, and to rethink its value in the context of the bigger challenges bearing down on us fast.
“Barriers to growth?”. Start with these….
I started my presentation by pointing out the very real barriers to growth that represent the elephants in the corner as far as Narrative Two is concerned. The first is the woeful oil dependency it fosters, and the fact that all the changes we had heard proposed thus far would increase our oil dependency rather than reduce it, and this is not a time when that is a smart thing to do. Bloomberg are now stating that the smart money in the options market is for the price of oil to reach $150 a barrel within a year. The Financial Times reports that the cost of importing oil into the EU has risen from $280bn in 2010 to over $400bn in 2011, and it is clear now that the price of oil will strangle any possibility of a revival of economic growth (and if you think ‘unconventional oil’ will make much of a difference, think again). You want to identify a barrier to economic growth? Well there’s one very big one. Until we massively reduce our oil dependency, we can kiss any chance of any sort of revival in our economic fortunes goodbye.
Then of course there’s climate change, and the fact that our inability to prevent runaway climate change within the next few years will be the mother of all “barriers to growth” (and the smart money is on the probability that we won’t prevent it). And, lest we forget, there’s the economic crisis, the scale of which few people still appreciate. In a recent post at Automatic Earth, Stoneleigh quotes Peter Schiff, president of Euro Pacific Capital in the US as saying “our government doesn’t have enough spare cash to bail out a lemonade stand”. Yet bailing out the EU would take hundreds of trillions of dollars, which no-one has. And if we in the UK think that by not signing this week’s EU treaty we are somehow insulated from the crisis unfolding there, have a look at this chart by Morgan Stanley Research:
As George Soros put it recently, “people don’t realize that the system has actually collapsed”. All of a sudden the word “barrier”, at least in the way it was used at the Summit, looks like a considerable understatement. The question that needs to be asked, I said in my presentation, is “does any particular new development or development model increase our oil dependency and our scale of economic precariousness, or decrease it?” These are the very real risks, the very real “barriers to growth” identified by the World Economic Forum as the risks with the greatest perceived likelihood of occurring and economic impact on developed economies. Let’s get real here.
Enter ‘The Portas Review’
Mary Portas (see right), star of ‘Mary, Queen of Frocks’ (a TV programme where she goes and makes-over failing retailers) was asked by the government to do a report about how to revive the UK’s high streets, and her report was published yesterday. In the main I have to say I thought it was rather good, delicately straddling the space between ‘Narrative 2′ than ‘Narrative 1′. At one point she says, in a soundbite perfect for our discussion about the Sainsburys distribution centre:
“A pound spent in a retailer with a localised supply chain that employs local people has far greater domestic impact than a pound spent in a supermarket or national chain. What’s more, out-of-town developments are often presented as major new sources of employment, but we need to recognise that this ‘job creation’ is often just job displacement”.
Her argument is that rather than sit back and be battered, high streets need to come out fighting, to innovate, to become places people want to visit. She puts forward some great ideas for making our high streets the vibrant, bustling places they need to be:
- The solutions need to bubble up from each place. As she puts it, “each high street will need to find its own bespoke response to revival, rather than being prescribed some generic response from on high”
- “Local people”, she argues need to be seen “as co-creators not simply consumers”
- She argues for the creation of ‘Town Teams’, charged with regenerating high streets and town centres, arguing that shopping malls have a management team, and high streets need something very similar
- She argues for ‘Super BIDs’ (Business Improvement Districts) where local businesses come together, funded by an annual fee to all local traders, to oversee the stimulation of business in the area. These ‘Super BIDs’ she argues could have the power to compulsorily purchase empty shops and get them going again
- She proposes new street markets, where for perhaps just £10 a table, anyone could sell anything (legal), and some of the shops could also have stalls
- She proposes cuts in business rates for new start-up businesses
- Big retailers, she argues, could mentor smaller businesses, and large chain retailers should be compelled to highlight in their annual reports “what they are doing at a local level to support the local high street”
- She also is clear that one big problem is absentee landlords who have no interest in their property being a part of this kind of regeneration process, and she suggests ‘empty shop management orders’ and a range of ways to force landlords to use their properties more responsibly
- The community should have the right to take over empty properties, and as well as the ‘Right to Buy’, she also proposes a ‘Right to Try’, which I love, arguing that “if [a community] can’t buy an empty property then they should be able to try it”, and “to go into the property and test co-operative ventures”.
- She also proposes the use of loyalty cards, although doesn’t mention the Brixton Pound, which would no doubt, like the forthcoming Bristol Pound, be right up her (high) street.
In short, there are loads of great ideas in the report. I love her talk of “looking beyond simply price-based considerations to include community wellbeing and long-term sustainability”. There is a passion that runs through it which I admire. I do however have just two criticisms of the report. The first is that there are a couple of places where I feel she is simply not angry enough, where she pulls her punches. She acknowledges the terrible situation that many high streets have been thrown into by out of town shopping centres and supermarkets muscling onto the high street, but is frustratingly shy about naming names as to how that has happened. She writes:
“The fact is that the major supermarkets and malls have delivered highly convenient, needs-based retailing, which serves today’s consumers well. Sadly the high street didn’t adapt as quickly or as well. Now they need to”.
It’s a bit like blaming a mugging victim for not ducking in time when the mugger took a swing at him. It is hard to adapt quickly enough when a supermarket pitches up next to your shop and undercuts all your prices, provides acres of free parking and uses all the other tools at its disposal to push you out of business. Have a look at this graph from the report showing the percentage change in UK store numbers between 2001 and 2011:
This is not a change in direction that happened by accident. Nor did, as the report states, the fact that 8000 supermarket outlets now account for over 97% of total grocery sales in the UK. This ‘transition’ (if you like) was supported, indeed driven, through subsidies, through a planning system driven by the same mania for growth that we are seeing today, it was driven by corporate interests, lobbyists, a whole wretched economic model that saw small businesses as disposable and large corporates and shareholder returns as essential, not just by unimaginative shopkeepers who failed to “adapt” quickly enough. Communities up and down the country tried to resist their towns being taken over by out-of-town shopping centres, becoming ‘CloneTowns’, and tried to protect their local traders by stopping supermarkets opening up on their high streets or one the edge of town, but were usually defeated by supermarkets’ huge budgets and legal fire power.
To give her her due she does suggest that when it comes to communities and supermarkets, there is not a level playing field. Her suggestion that “people need a powerful, legitimate voice and planning needs to be a much more collaborative process than it has been to date”. She suggests that developers should make a financial contribution to ensure that the local community has a strong voice in the planning system (I can see that one going down like a lead balloon). There is a key tension here though in terms of a government who would see such an approach as a “barrier to growth”, as unnecessary ‘red tape’ to be swept asunder.
The other problem with it is that reading it one would think that the decline in high streets is happening in isolation from the larger economic picture. There are some trends working in favour of the high street. The price of fuel has meant that John Lewis recently reported that sales at their out-of-town stores are now down 12% compared to their town centre stores. I would have love to have seen what this report would have looked like if she has explicitly been asked to look at how high streets could also boost community resilience in the wider sense, actually responding to the looming energy crisis, to the debt crisis. Although she does touch on some things that would be very helpful for this, some joining up of dots is frustratingly elusive.
Back at the summit… tools for building bridges
What was fascinating at the summit was a sense that began to emerge about how a dialogue might look that was about building a bridge between these two narratives. It was the Conservative councillors who were arguing for support for local businesses, for more apprenticeships, for support for new businesses. Arguing that economic growth, as we’ve known it so far is over, is probably not going to register, whereas presenting Transition as the opportunity for entrepreneurship and innovation, for supporting local businesses which are key to community resilience, seems to gain far greater traction. What will impress such people is not the amount of carbon we’ve saved, but the number of jobs we’ve created. Often they see those two things as mutually exclusive, we can model just the opposite. Once Transition becomes the thinking that underpins hundreds of jobs in a place, it becomes a no-brainer.
The Portas Review presents a powerful and well-reasoned argument that we need to nurture and revive the high street, that they need to be diverse and innovative, that local people need to be more involved and that they need some kind of protection from the predation of the chainstores.
I left the meeting feeling that the strategic planning guys are a dead loss, they have to make the kinds of plans that include Sainsburys distribution centres and nuclear power plants because that’s their job. They represent a slow moving supertanker in terms of how long it takes to move things forward, and how long it takes to turn them around, what the film ‘The Story of Broke’ refers to as ‘the dinosaur economy’. Will the finances to build them still be in place in a couple of years? Will the realisation dawn that they deplete rather than enhance the area’s resilience? Will the new Community Resilience Framework‘s assertion that it is up to communities to choose what they are building resilience to mean that they will also, under the localism agenda, be given the powers to resist things they see as diminishing their resilience?
A question arises here in terms of timing. We have very little time to make this stuff happen, it needs to happen now. Local authority strategic infrastructure planning work stretches out 20 years into a very uncertain future, yet moves very slowly and is very difficult to turn around. So the question that arises from the Summit is is there any value to a Transition initiative putting its energy into these long-term strategic consultations or into setting up community enterprises, retraining, reskilling, new food systems and so on? Also, given that most of the money from central government is distributed via. the networks of Narrative One, much of the resource that is needed to build the more resilient systems won’t reach them. Again, plugging the leaks of our economy and enabling inward investment are vital. I think this is a different take on emergency preparedness, that what we need to do right now is to take the ‘can do’ spirit and entrepreneurial drive Portas lays out, combined with the bottom-up mobilisation, the intentional localisation and resilience-building that runs through Transition, and harness the inherent enthusiasm and support for this that can be found everywhere.
Transition is so important because it is about doing things, engaging the community, starting to create and model the economy we do want to see. Across the world, Transition initiatives are doing just that, whether it’s Sustainable Dunbar’s new community bakery now open for business, Bath and West Community Energy just raising £721,350 in a community share launch for renewables in the area, or the Plymouth Food Charter which Transition Plymouth are a key part of, they are starting to model the kind of economy for which there is much more support. Yes it needs support, it needs investment, it needs that money currently being spent on bypasses and new roundabouts, and it needs to be far more visible on the ground. Portas puts it beautifully in her report, “what really matters, what’s really important, is that we roll up our sleeves and just make things happen“. Indeed.
At the end of the meeting, one of the senior representatives of South Hams District Council stood up to give his reflections on the day, and what he said gave a great sense of how these two narratives might find some common ground, and how Council thinking might shift. He talked about how own his thinking had shifted as the day went by, and that he was now questioning why developing an economic strategy for the area always meant thinking in terms of large scale ‘solutions’ and big centrally-funded infrastructure projects, and that perhaps focusing on local economies might be a more skillful way to move forward. This felt like a powerful observation, and one we can certainly build on locally.
I often end talks with Arundhati Roy’s quote “another world is not only possible, she is on her way. On a quiet day I can hear her breathing”. Might we be able to adapt her quote, so that, in the context of what I have written about here today, it is not only a case of hearing her breathing, but being able to see her, around us, setting up local businesses, reviving her local economy, setting up a community bakery, mentoring scores of young people with business ideas, attracting inward social investment finance, creating the models whereby people can invest in their communities, creating economic blueprints which set out the case clearly for how the local economy can be strengthened and supported? Yes there are very real barriers to growth, such as the barrier that you can’t do infinite growth on a finite planet, but there are no barriers to the growth of the innovation, community and resourcefulness that already underpins our local economies and local traders, and which represents the real bedrock on which a new, more resilient economy needs to be built.