Inclusive Growth in Greater Manchester 2020 and beyond

Executive summary

The Inclusive Growth Analysis Unit (IGAU) has taken stock of the progress that has been made in Greater Manchester (GM) towards inclusive growth, in the period since 2016 when inclusive growth started to become a prominent objective for UK cities. It has reviewed developments in policy and practice, principally those of the Mayor and GM Combined Authority (GMCA), but also of local authorities, businesses and organisations in the voluntary, community and social enterprise sector. In this legacy report, IGAU ask whether what has been done is sufficient and if not, what else could be done. The report learns from case studies from around the UK and abroad.

Inclusive growth and why we need it in GM

Inclusive growth is the idea that economic prosperity should create broad-based opportunities and have benefits to all. It challenges economic models which have produced large rises in income and wealth for some, while sustaining high levels of poverty and high levels of inequality. Since the global financial crisis, sustained economic inequalities, increasing social divisions and the rise of nationalism and populism have led to calls for different models of economic and social policy which will involve more people in economic opportunity and result in prosperity that is more widely shared.

Greater Manchester needs more inclusive growth

While the Greater Manchester economy as a whole performs relatively well compared to other UK cities outside London, it underperforms the UK economy as a whole and that of other leading European city regions, such as Munich, Helsinki and Barcelona. There are significant problems with low pay and insecure employment, with around 620,000 people in relative poverty, a majority in working households. More neighbourhoods are in the top fifth of the national indices of deprivation in 2019 than in 2015. The centre of the conurbation has seen the lion’s share of job growth since before the financial crisis, although not always benefiting local residents, while outer areas like Rochdale and Tameside continue to struggle on many economic indicators. Women, minority ethnic groups and disabled people tend to fare much worse in terms of jobs and pay than men, white, and non-disabled people.

Tackling these social and spatial inequalities would enable GM to make more use of the talents of a wider range of its people. Changing economic behaviours and labour market practices would spread the benefits of economic activity more widely, raising living standards and combatting poverty and injustice.

Greater Manchester is about to enter a new policy period with a Mayoral election in 2020 kicking off a new four-year Mayoral term and a refreshed GM strategy. The report makes recommendations about what could be done in this period to consolidate and extend the work started to date, and to set out on a more ambitious path towards a fairer economy and society in the future.

Inclusive growth policy and practice has two broad spheres of activity:

• working towards economic structures and activities that are more inclusive by design, for example: fairer systems for profit-sharing and reward; more equitable employment practices; and better quality jobs.

• making sure that local people are connected to economic opportunities, physically (in terms of housing, transport and digital connectivity) and in terms of having the education, training, health and care services they need.

Within these spheres, IGAU expect to see a particular emphasis on areas or groups of people more likely to have been excluded in the past.

Progress towards inclusive growth in GM

IGAU assessed progress in GM against a wide range of ideas and examples that are emerging as cities in the UK and internationally (and countries, including Scotland and Wales) experiment with policies to achieve inclusive growth. It looked at the two main spheres of inclusive growth policy – designing more inclusive economies and linking people to opportunities – and at policies to tackle social and spatial inequalities. IGAU also looked at how GM is approaching inclusive growth in terms of strategy, leadership, delivery and measurement. Table 1 summarises those findings.

Overall, these developments represent substantial progress. They will need to be sustained and built upon, and there will be new opportunities, such as bus franchising, which will need to be approached with an inclusive growth lens.

What has not yet happened in GM is the bringing together of these emerging policies in a clear vision and integrated approach.

Inclusive growth still means different things to different people and is more prominent in some policy areas than others. This is in contrast to some other parts of the UK where inclusive growth is being adopted as the central objective of economic plans and/or it is becoming embedded into policy-making and investment decisions through the use of inclusive growth metrics, decision tools, and new funds. Nor is inclusive growth yet a long term vision, shared by the citizens of GM, which sets out goals, values and principles about the kind of growth GM wants, how it will be achieved, and how it will serve wider social and environmental objectives and ensure a successful inclusive transition into a low-carbon, high tech future.

Full report PDF available here

In the next Mayoral Term (2020 -2024) the Mayor of Greater Manchester should signal a commitment to inclusive growth as the central motif of his/her Mayoral term. His/her central objective should be to set GM on a long term path towards a fairer and more sustainable economy and society. To support this the political leaders of GM should adopt a clear statement of what they mean by inclusive growth and the ways in which it will make a difference to GM citizens, including those on the lowest incomes. This should be the centrepiece of the new GM strategy (GMS). Stronger mechanisms should be established to ensure that inclusive growth outcomes are considered in all major policy decisions. GM should establish a successor organisation to IGAU to ensure that it has dedicated support for research, analysis and policy development on inclusive growth. It should work with central government and other cities to make clear the principal financial, policy and regulatory barriers to inclusive growth at subnational levels and how these can be addressed in future devolution settlements.

Between 2020 and 2024, the Mayor, Combined Authority (GMCA) and other GM leaders should take specific action to embed and develop inclusive growth strategies for the economy, places and people.

On the economy they should design and build a stronger and more integrated eco-system to support the development and continuation of inclusive economy activities. Meanwhile the Mayor and GMCA should commit to the development of the good employment charter, to publishing their plan for the foundational economy, to providing support and resources to develop the work of the Co-operative Commission and to starting work on the development of mechanisms to protect quality of work and pay for workers in the ’gig’ economy. They should work with other combined authorities to review and report on opportunities and constraints in promoting good employment at city region level. The Mayor should establish an Inclusive Growth Investment Fund in order to support innovative proposals led by business, voluntary, community and social enterprise actors and to support scaling up.

On places, GMCA should develop inclusive economy plans for all major development sites identified in the Greater Manchester Spatial Framework and for the Town Centre Challenges. The Mayor should appoint a senior figure as a Neighbourhoods Champion who should have an overall objective to make sure all neighbourhoods of Greater Manchester benefit from the city’s economic, technological, environmental and social transformation, especially those which have previously been vulnerable to the forces of change. GMCA should develop ‘Total Place Plus’ pilot projects which will build on the Unified Public Services Model to incorporate shared planning and delivery in public services with place-based social economy and employment initiatives.

On people, the Mayor and GMCA should establish strategic oversight of the GM education and training system as a whole, whether or not additional formal powers are devolved. GMCA should develop inclusive education and training plans for growth sectors, supported by the proposed GMLIS investment pot. They should strengthen links between equality and diversity strategies and education/employment/skills strategies.

The Mayor should also take steps in the next mayoral term to set a more ambitious long term economic, social and environmental vision for GM. Following the examples in the report, he/she should commission deliberative work with residents in order to understand what they mean by ‘prosperity’, ‘inclusion’, ‘living standards’ and inclusive growth and what kind of GM people want. This should be the basis for the 2024 GM strategy.

Full report PDF available here

‘Inclusive growth’ – a term relatively unfamiliar in the UK five years ago but now increasingly common – captures the idea that economic prosperity should create broad-based opportunities and have benefits to all. It challenges economic models which have produced large rises in income and wealth for some, while sustaining high levels of poverty (including for those who are working) and high levels of inequality.

Definitions of inclusive growth:

Over three years ago in summer 2016, IGAU's report Inclusive Growth: Opportunities and Challenges for Greater Manchester reviewed evidence of inclusive growth in GM. IGAU set out the evidence that, despite recent economic success, GM still fell a long way short of its 2020 vision to pioneer “a new model for sustainable economic growth based around a more connected, talented and greener city region where all our residents are able to contribute to and benefit from sustained prosperity and enjoy a good quality of life”. IGAU argued that, like other large ex-industrial cities, GM faced considerable challenges in achieving this vision: persistent poverty; a changing economic geography with growth concentrated in central areas; changes in labour market structure with increasing concerns about low pay, underemployment and precarious work; and large disparities in economic opportunity and outcomes between people from different social and ethnic groups. Drawing on a local consultation and emerging evidence of what inclusive growth policies might look like, we followed up with a second report: Achieving Inclusive Growth in Greater Manchester: What can be done?

A great deal has happened in GM since then: the election of a Mayor; the adoption of new Greater Manchester Strategy; publication of a revised spatial framework setting out a long-term plan for the city region; an Independent Prosperity Review (GMIPR) and a new GM local industrial strategy. Once implicit, inclusive growth has increasingly become a more explicit aim of GM strategies and policies. At the same time, wider interest in inclusive growth has grown. In the UK, a high profile RSA Commission reported in 2017; an all-party parliamentary group has continued to meet; and a new think tank (the Centre for Progressive Policy) has been established to promote the agenda. Outside the UK, the Organisation for Economic Cooperation and Development’s (OECD) campaign for inclusive growth in cities and its ‘champion mayors’ initiative’ has gathered pace.

As the next GM Mayoral elections approach, the aim of this report is to take stock of the progress that has been made since 2016/17 and, crucially, to consider what might be done next. Are the challenges still the same? What policies have been put in place, and are they sufficient? Is GM ‘on track’ for more inclusive growth or do efforts need to be ramped up? If more could be done, what should it be? What can be learned from the emerging national and international evidence on inclusive growth and from promising examples in other cities?

The report is structured as follows. In Chapter 2, IGAU briefly review statistical evidence on the GM economy, poverty and social and spatial inequalities. This, as IGAU sees it, is the challenge for inclusive growth. Chapter 3 explains more about what inclusive growth means and might look like in practice. IGAU also consider some other current terms and ideas related to inclusive growth and overlapping in some ways, since many of the ideas and examples it looks at could also be described in these terms – ‘economic justice’ or ‘community wealth building’ for example.

Chapters 4 to 7 review different aspects of inclusive growth policy in GM. In each, we describe and assess policy developments, in the light of emerging understandings of what inclusive growth policies might look like – drawn from a growing inclusive growth literature and knowledge base. IGAU also provide short case study examples from other places around the UK and abroad which suggest ways in which GM policies might develop. The methodology for gathering and reviewing this evidence is covered in Appendix 1. Chapter 4 covers the take up of inclusive growth ideas in GM as a whole and looks at issues of strategy, leadership, delivery and measurement. Chapters 5 and 6 cover the two principle spheres of inclusive growth activity: designing more inclusive economies and including more people in the opportunities that are created. Chapters 7 and 8 cover spatial and social inequalities and the ways in which policies are responding to these. IGAU arrive at an overall view in Chapter 9, and make a set of recommendations for taking the ‘inclusive growth agenda’ forward in GM in the next policy period.

The report will obviously be of most interest to people in GM itself. But as many city regions and other places also attempt to get to grips with inclusive growth, we hope it will be a useful reference point and guide for others in the UK and beyond.

Full report PDF available here

Structures, delivery and measurement

Consistent with its decision not to adopt the terminology of inclusive growth as a central mission, GMCA has not established any central unit/resource to develop its inclusive growth policies and actions ensure their embeddedness across multiple areas of policy. This approach contrasts with that of the West Midlands combined authority (WMCA), which has established an internal Inclusive Growth Unit, to ensure that inclusive growth is “hard-wired” into mainstream West Midlands investment, economic growth and local industrial strategy. The Unit provides research, analysis, insight and citizen engagement to support more inclusive policy and investment decisions, and is intended to give long term strategic support for the WMCA and its public service partners within the region. The existence in GM of the IGAU as an independent evidence resource and convenor of stakeholders may be a factor in GM’s different approach. GM has also chosen not to allocate a political portfolio holder within the Mayor’s Cabinet responsible for inclusive growth. Current portfolios most relevant to inclusive growth are those for: ‘the economy’, ‘education, skills, work and apprenticeships’; ‘community, voluntary and co-ops’; and ‘age-friendly and equalities’. However almost all other portfolios could have an element relating to inclusive growth.

Specific inclusive growth metrics, based on a re-thinking of what inclusive growth means and what measures would signal success, have also not yet been developed in GM. IGAU’s research suggests that there are many different approaches to inclusive growth measures, some more radical than others. Some simply involve measuring indicators of inclusion alongside measures of growth or prosperity. Some involve attempts to combine indicators in a single measure, so that the value of economic output is effectively weighted by the extent to which other social goals are achieved.  Some keep multiple existing measures of growth and of social outcomes such as education and health, but pay much more attention to their distribution between places and population groups. Others develop frameworks which give more attention to citizens’ understanding of the meaning and value of growth and inclusion, or to the conditions and processes which underpin inclusive growth (such as resilience, participation or social and cultural infrastructure).

GM has developed an extensive outcomes framework to support the delivery of the GMS. This includes inclusive growth metrics at the level of priorities, particularly “good jobs with opportunities to progress and develop” and “a thriving and productive economy in all parts of Greater Manchester”. Elements of this framework are supported by performance dashboards, reported to the relevant body in the governance structure. This, in our view, represents advanced progress in command of data for monitoring purposes. Four things have not yet emerged or become established:

• A smaller set of high-level measures that would represent progress on inclusive growth, which might enable impact assessment tools to be developed for proposed policies or investments.

• Deliberative processes to determine priorities and trade-offs.

• A clear understanding of the relationship between measures across policy areas and the relationships between them. For instance, what measures of culture or social participation would support developments in skills, health and jobs?

• A critique of, or challenge to, existing goals or measures based on broader citizen participation and debate.

Turning to the question of wider involvement in leadership and governance, our consultation suggests that significant steps have been taken in recent years and particularly since 2017. These include the establishment of the VCSE reference group, a Mayoral accord with the VCSE sector, and various initiatives to increase voice and representation from marginalised groups (see Chapter 8). As we have documented in other work, devolution to GM has in any case (regardless of inclusive growth) fostered an increase in formal and informal partnership working and collaboration across local authority boundaries, across sectors and within and across policy boundaries. Examples include GM’s Ageing Hub, partnerships formed around the Mayor’s homelessness agenda, and the Education and Employability Board which brings together schools, colleges, universities, local authorities, DfE, Regional Schools Commissioner, GMCA, the LEP and others. High level VCSE representation has been sought for the GM Housing Commission. The University of Manchester has taken a lead with the Centre for Local Economic Strategies and GMCA in establishing a steering group to develop an ‘anchors initiative’ in GM. A number of local authorities in GM, particularly Wigan (the Wigan Deal), Manchester (Our Manchester) and Oldham (Co-operative Council/’Our Bit, Your Bit’) have sought to foster new relationships with communities, including community investments funds, asset ownership and wider involvement in decision-making. Since 2017, cross-GM conversation, partnership working and strategy formation have been mobilised on specific issues through ‘summits’ (on school readiness, social enterprise and the economy) and through formal commissions (on Cohesion and on Cooperatives). However, in respect of ‘inclusive growth’ as a whole, IGAU’s multi-stakeholder advisory board remains the key forum for discussion and representation. Our consultation also raised questions about effective representation of diverse communities, and of different parts of the VCSE sector (with voluntary, community and social enterprise elements all having very different perspectives and expertise).

Finally, we note the challenges of financing inclusive growth strategies, in the context of limited and piecemeal devolution to city-regions, a long period of austerity, and the phasing out of local government revenue support grant. Inclusive growth raises resource questions in multiple ways including but not limited to: how to finance the delivery of work at the city-region level such as good employment charters, policy development and appraisal; how to fill gaps in public funding or enhance services to meet city-region priorities (for example in relation to skills or transport); how to support innovation and evaluation; how to pool existing public and private resources in new ways; and how to increase access to finance for local business growth. Proposed solutions include establishing local financial institutions to enable local saving and lending; local investment of anchor institution assets and funds; municipal or social investment bonds; and municipal ownership or community ownership of local public assets. Devolution from central government and the capacity to pool budgets across service areas is a key issue, as will be any future settlement relating to the distribution of regional funds following the UK’s exit from the European Union (EU).

As we document throughout this report, new inclusive growth initiatives in GM are being financed in a variety of ways, including levies on taxpayers through the Mayoral precept, ‘earnback’ arrangements with central government, retained business rates, local authority and business contributions. GM Mutual, a local bank, was registered with the Financial Conduct Authority in 2019, with support from several of the GM districts, the GM Chamber of Commerce, the Federation of Small Businesses, and third sector organisations, but plans are still at early stages. As work on inclusive growth develops in GM there will be a continuing need to identify costs, benefits and financing mechanisms, including through any further devolution settlements following the government’s recently announced White Paper on devolution.

Learning from other places: see case studies 1,2,3,4

Key points:

■ Inclusive economy activities aim to change the way the economy functions in order to achieve a fairer distribution of economic opportunities and to deliver wider social and environmental benefits.

■ Policies that develop some of these ideas have begun to emerge in GM, including around promoting good employment practices, efforts to develop and support different types of economic activity, and recognition of the importance of the ‘foundational economy’.

■ Much of this activity is still in the early stages. GM needs to go further in embedding a commitment to build an inclusive, resilient economy with good jobs for residents.

■ Examples from other places suggest that cities can develop systemic and long-term approaches to supporting the growth of local businesses that can offer good jobs to residents. Recent examples include offering dedicated funding to support the development of inclusive economy initiatives and efforts to re-organise care services in line with co-operative principles.

Making local economies more inclusive

An inclusive economy is one where economic structures and activities are more inclusive by design, reducing inequalities and delivering wider social benefits. It rests on the idea that the economy is currently ‘exclusive’, therefore requiring intervention in key markets, sectors, business ownership models and the flow and distribution of assets and resources. The economy is re-framed as the product of collective decisions about the organisation of production and exchange – decisions which can be unmade in order to change the ways that resources are distributed, governed and owned. A better society and standard of life, good services and infrastructure and strong relations between community members are priorities, rather than economic growth in and of itself.

A key plank of local inclusive economy strategies is supporting employer behaviour that raises wages, improves job quality and builds opportunities for in-work skills development and pay progression. Approaches include employment charters, living wage policies, support for job redesign and work re-organisation in low paid sectors. Public procurement and commissioning may also be used as tools to promote better employment practices.

More broadly, cities can adopt economic strategies that, over time, support the development of activities, sectors and types of economic organisation that are more likely to deliver high quality employment for local residents as well as social and environmental benefit. These can include various forms of ‘growth from within’ approaches, rather than focusing mainly on attracting external investment, as well as strategies to stimulate employer demand for higher level skills and better use of existing skills. Places can support co-operatives and social mission focused organisations to produce core services and goods, creating a more diverse and therefore potentially more resilient economy as well as better outcomes for residents, and workers. Some make the case for treating ‘foundational’ types of activity differently, with utilities, health and social care subsidised, organised and delivered on a low risk, low return basis. Municipal ownership of assets and utilities, or co-ownership models, may also be considered.

Inclusive economy policies in Greater Manchester

From our reading of the Greater Manchester strategies, and GM-level policies, inclusive economy policies were not especially prominent in GM before 2017. However, there are some promising recent developments.

The Good Employment Charter is a particularly significant development in this area. The Charter was part of the mayor’s manifesto but has been developed through consultation with employers, unions, and employment specialists and researchers. Launched in July 2019, it is being piloted with a small group of employers who will help to set the criteria for membership. Rather than just aiming to recognise the ‘best’ employers, the charter aims to support all employers in the city region to identify how they can adopt better employment practices across seven broad themes (see Box 7). The charter has great potential but a number of challenges lie ahead.

Our review of local employment charters found that previous initiatives tended to engage a relatively small number of employers directly, in terms of accreditation and membership. However, they can play a more indirect role in initiating wider conversations and raising expectations around good employment. For GMCA, and its constituent LA members, the implementation of the charter could have a significant impact through highlighting how these organisations could improve employment practices, as well as the impact that they have in setting employment standards beyond the local authority, e.g. around commissioning of services and investment decisions. In terms of wider engagement, it is likely that significant time and resource will need to be invested to achieve the ambition of working with all employers, including those in lower paid sectors, small and micro-businesses, particularly where changing practices will have a direct impact, at least initially, on business costs. Careful integration of the charter into GM’s social value strategy and investment funds could provide strong incentives for some employers to engage with the charter.

Turning to other business-focused policies, the Growth Company (GC) is the umbrella body in GM which brings together a range of businesses and organisations supporting growth and job creation activities across the city region. In this role, it is tasked with helping to deliver against the ambitions of the GMS and has enthusiastically adopted the ‘inclusive growth’ framing within some key areas. The Growth Hub, which is part of the GC and which coordinates a range of business support services, has trained its advisors to ask those businesses who engage with their programmes a core set of ‘diagnostic’ inclusive growth questions. These questions aim to determine whether the business: pays the Living Wage; uses zero hours contracts; supports volunteering; and supports local suppliers. Business may then be referred to advisors within the Growth Hub to discuss how they might adopt these practices. However, at present the extent to which these questions lead businesses to think about how they might offer, for example, better pay, or more secure contracts is not clear. Depending on quality, the data collected by advisors could be used to track business practices, and/or the number of employers who subsequently engage with support to change these practices. This could also be helpful in planning future support services, giving an indication of the demand for more intensive support and whether this should be targeted. An Inclusive Growth steering group, which was recently set up within the Hub, could review this activity, as well as considering what other diagnostic data could be usefully connected.

The GM Business Productivity and Inclusive Growth programme, which has attracted £45 million in funding, is also being led by the Hub. The overall programme is primarily targeted at businesses with ‘the greatest potential and ability to grow and/or improve their productivity’67, including sectors with growth potential (like health innovation and advanced manufacturing) and large employment sectors (like retail and hospitality). The overall programme has the potential to support inclusive economy activities. One strand within the programme, the Large Companies Support programme, aims to help large companies to become more resilient in the face of changing markets and economic shocks through support to plan for the future. Other strands are supporting innovation and carbon reduction, with match funding from the European Regional Development Fund. Currently, the number of businesses engaged and the number of jobs created are the main targets against which progress is being reported across the different strands of activity, so it is difficult to determine the level of engagement across sectors, the types of jobs that have been created and how far this might be supporting companies to transition to a fairer, or greener approach. Outside of the Productivity and IG programme, the Hub is also working with the Chamber of Commerce to encourage small and medium-sized employers to take on apprentices.

A range of networks, organisations and policies are promoting the use of social value within GM. There is a Greater Manchester Social Value policy, currently under review, which supports information sharing, training and networking around social value across GM. As a part of the wider GMS, Greater Manchester is aiming to embed ‘quality jobs, skills provision and career progression’ as core outcomes for all skills and work contracts. For example, in 2018 the contract for the Work and Health programme was awarded to InWorkGM, a partnership between Ingeus and three social enterprises, including the Growth Company. The partnership has committed to deliver a range of social value commitments, including: ensuring that employees are paid the Living Wage; offering leadership development workshops to voluntary and community sector organisations; and ensuring that they recruit a diverse range of people, with at least 35% of people from ‘priority characteristics’ such as young (16-24) and older (over 50) people, ex-offenders, and those with a disability or health condition.

Aside from the commissioning process, parts of the Work and Health programme have also been adjusted with the aim of promoting better employment outcomes for participants. GMCA has varied the payment by outcomes model so that providers will be paid an ‘earnings fee’ if they support participants into work that pays the equivalent of the Living Wage for a specified number of hours and period, this is in contrast to the national *programme which pays providers based on the National Living Wage70. As a large share of the funding for the programme (around 45% of what was budgeted in 2018) came from EU funds it is as yet unclear what will happen when this funding expires. A more recent development which has the potential to considerably strengthen activity around the inclusive economy is the Co-operative Commission for Greater Manchester. This is an independent panel set up in 2018 to help identify ways to support the development of the co-operative sector in GM, and the role of the Combined Authority in enabling this activity. While the Commission is not due to report before this paper goes to press, initial findings indicate that GM has a relatively underdeveloped co-operative sector but that there are opportunities to strengthen support for the sector. Commission hearings have focused on housing, transport and digital sectors and ways to support the development of co-operative businesses. Alongside the Commission, a Social Enterprise Strategy is also being developed, which will set out how the sector can support the implementation of the GMLIS, whilst also promoting good jobs and innovation. The GMLIS also committed to developing a plan for the ‘foundational economy’, including looking at ways to improve productivity and job quality in these areas.

The strategy, and the GMIPR, gave significantly more attention to the importance of pay, job quality, skills and progression in the large low paid sectors which make up a large part of the GM economy than its predecessor, the Manchester Independent Economic Review (MIER). However, it is as yet unclear how the foundational economy is understood in this context – whether it is being used in a more limited way as shorthand for ‘low paid sectors’, or a more expansive way including utilities and elements of ‘social infrastructure’ such as education and health. It is also as yet unclear how the plan for the foundational economy will be integrated into the wider GMLIS and the implementation plans that are being elaborated around it: failure to do so could marginalise and limit the potential of this commitment. Inclusive economy activities are also being explored and implemented by individual local authorities. Manchester has recently developed a Local Industrial Strategy, which is aligned to the GMLIS and explicitly aims to create a more inclusive economy for the people who live and work in the area. The strategy outlines plans to create quality job opportunities in the foundational economy, including working with anchor institutions. Several local authorities have committed to increase their use of social value within contracting and procurement, including adopting a 20% social value weighting when assessing tenders (e.g., Manchester, Stockport, Tameside). Many local authorities are taking steps to monitor their spending and increase the proportion that goes to local suppliers: Oldham’s community wealth building approach, for example, brings together the local authority with other local anchor institutions to increase local spend and create employment opportunities for residents. Moving beyond contracting, Salford has introduced the 10% better social value campaign, which is asking people and organisations from the third, public and private sector within Salford to make a pledge to help them to meet a variety of goals, including reducing waste, increasing recycling, increasing volunteering and increasing the number of people who are paid the Living Wage. Similar commitments also feature in the Wigan Deal, and the Deal for Business. Meanwhile, Rochdale Council is targeting some financial support, such as business rate relief, at organisations that are judged to be offering jobs with progression and development opportunities. Our consultation also suggests that housing providers are increasingly involved in building inclusive economies in their areas. There are examples from around GM of: facilitating networks of local businesses; providing enterprise advice, business skills workshops and signposting to small business grants; and grant-funding community business start-ups and consolidation, including targeting under-represented groups. Housing providers also support local social businesses through their own procurement processes. Overall, this account suggests that that there has been an emergence and strengthening of inclusive economy policies in GM in recent years. However, current initiatives are still in their early stages, rely on ad hoc funding or have been established on a short term basis, so work will be needed to put activity in this area on a more sustainable footing capable of supporting a longer term transformation of economic activity.

While the GMLIS certainly signals a shift to a more plural approach to economic development, this has not yet been turned into a clearly integrated strategy, located within the city region’s growth narrative, which links the different developments (on responsible business, low paid sectors, and the social economy). GM has also not yet pursued some of the more ‘progressive’ or ‘radical’ ideas emerging around local ownership and governance, although the report of the Co-operative Commission may initiate moves in this direction. GM could also prioritise support for initiatives that aim to reduce the insecurity and low pay experienced by workers in the gig economy, e.g. the development of digital co-operatives platforms.

Learning from other places: see case studies 5,6,7,8.

Key points:

■ People can be connected to economic opportunities and enabled to live well by investing in quality services and infrastructure, and through targeted initiatives to strengthen the links between economic and social policies.

■ GM has already made substantial progress particularly in the area of work and skills, and through its public sector reform programme.

■ Key next steps will be to maximise the inclusive growth benefits of local bus franchising, as well as to ensure that inclusion is a central feature of strategies for growth sectors, including in green industries.

■ GM also needs to develop a strategic approach to its education and training system, as it has done
with health and social care.

■ Examples from other places illustrate how cities can take a system-wide approach to improving education outcomes, connect disadvantaged groups to new sectors and opportunities and subsidise travel to improve access.

Connecting people to opportunities

In addition to developing an economy that is inclusive by design, another major sphere of inclusive growth activity relates to making sure that local people are connected to economic opportunities, through improving physical and social infrastructure and making access more equitable. This is more familiar policy terrain than some of the ideas discussed in terms of developing more inclusive economies since it typically falls within mainstream policy debates – on affordable housing, transport connections or digital infrastructure, or education and training, health, care and, often neglected in relation to inclusive growth, culture and leisure.

In the context of inclusive growth, city-regions have two main challenges in dealing with these issues. The first challenge is to make universal and targeted public services work in ways which significantly shift long standing inequalities in human, social and cultural capital, while at the same time facing rising costs and needs and reduced spending. Devolution of powers to city-regions creates an opportunity for innovation and transformation through the joining up of services and budgets in place.

The second challenge is to link social and economic policies more closely. This could mean designing social policy interventions directly to support economic strategies – for example developing holistic approaches to tackle health-related barriers to employment. It could mean designing economic strategies and actions in ways which bring more equitable social benefits, for example by developing strategies for growth sectors which enable people who would not typically benefit from these to access sustainable and high quality training and work opportunities. Other examples include working with employers on job design, recruitment, and entry requirements in order to widen opportunity; developing accessible learning (including for those in low wage work who want to progress), and supporting residents to adjust to changes in the types of jobs that are likely to be available over the short and long-term. Box 8 provides some examples of key ideas that connect to these priorities and challenges.

Key points:

■ Spatial strategies for inclusive growth can include changing priorities for infrastructure and investment as well as building local economies through fostering local enterprises and maximising benefits of local spend, and targeted social policies.

■ The policies announced by GMCA during 2019 demonstrate clear intent to take responsibility for spatial inequalities and put in place spatial strategies and delivery structures to reduce them.

■ Key developments are the revised GM Spatial Framework, the focus on place in the GM Industrial Strategy and the neighbourhood-based delivery structure for the GM Unified Public Services model.

■ Examples from other times and places suggest how there can be stronger alignment of plans for growth sectors and places, governance mechanisms to ensure a spatial focus across policy and a focus on the highest priority neighbourhoods, and more support for community economic development.

Inclusive growth and spatial inequalities

Internationally and in the UK, the inclusive growth agenda tends to have a strong focus on spatial inequalities,addressing concerns about places that have been ‘left behind’ by de-industrialisation and by the emergence of new economic geographies in which central cities have tended to be more advantaged than peripheral areas. The RSA Commission, for example, emphasised that inclusive growth was about enabling people and places to contribute to and benefit from economic success (see Box 1), “addressing inequalities in opportunities between different parts of the country and within economic geographies” (RSA Inclusive Growth Commission, p.6). In this sense, it presents a clear challenge to the economy orthodoxy of recent decades which has resisted intervention in the geography of markets and emphasised the benefits to all of agglomeration economies.

The proposals that arise from this new spatial emphasis tend to be of five different kinds, operating at different spatial scales. One is the establishment of structures and funds that give places (usually at the regional or sub-regional level) responsibilities and powers to determine and deliver tailored local economic plans – local industrial strategies in England and regional economic partnerships in Scotland. Another is the suggestion that these economic strategies should pay attention to spatial inequalities between localities within larger places.

As the independent Industrial Strategy Commission put it “an industrial strategy should not try to do everything everywhere, but it should seek to do something for everywhere”. The RSA Commission advocated “resourcing place regeneration as well as business investment” (p.10). Third, as discussed in Chapter 5, inclusive growth has an emphasis on capturing the greatest local benefit from economic activity, through procurement and commissioning. Applied to places, this often includes work to maximise local benefits of major housing or industrial developments, and/or focusing the activities of ‘anchor institutions’ on particular local areas rather than city or city region geographies. Fourth, there can be a neighbourhood or locality focus within economic development, with coordinated and sustained efforts in a place to support and network local firms and support local ownership of assets and organisation of services. Fifth, other policies and activities such as education and skills and health initiatives, may be targeted on specific places. As is the case at larger spatial scales, an inclusive growth approach should ‘join up’ economic and social strategies in places so that they are mutually reinforcing, although this is additionally challenging.

Policies on spatial inequalities in GM

How to approach the spatial (im)balance of the GM economy within the context of commitments to inclusive growth has been a contested issue within the GM ‘family’ of organisations in the decade since the MIER. While its underlying enquiries had a focus on spatial inequalities at the neighbourhood level, the MIER report downplayed the importance of place, emphasising that deprivation arises at individual not neighbourhood level and therefore gave weight to strategies to target individual educational attainment (including the early years), skills, and ‘worklessness’. The MIER explicitly rejected any redistribution of economic activity and emphasised the importance of growing the GM economy overall and encouraging concentration of activities in the regional centre to capture agglomeration benefits. This approach underpinned GM’s economic strategy for the next decade. By summer 2016, when the Brexit referendum highlighted widespread discontent in ‘left behind’ places, it was already attracting increasingly vocal critique from politicians in less economically successful areas of the conurbation. These critiques were also raised in the consultation over the initial (2016) draft of the GMSF, which largely persisted with the ‘regional centre and growth hub’ strategy.

In 2019, the publication of the revised GMSF signalled the adoption of a significantly different approach. In his foreword to the document, the Mayor describes its purposes as spreading prosperity more widely, especially to the North of GM. The term ‘inclusive growth’, referring to spatially more even growth, features very prominently throughout the strategy. Indeed it is stated that “the central theme of the spatial strategy for Greater Manchester is to deliver inclusive growth across the city region, with everyone sharing in the benefits of rising prosperity” (p. 41). Targets include both the GMS priority “a thriving and productive economy in all parts of GM” and a target to “reduce inequalities and improve prosperity”. There are specific goals to reduce the number of wards in most deprived 10% nationally of the IMD, and to strengthen the competitiveness of the North of GM. While the earlier emphasis on making the most of the key locations and assets best-placed to support economic growth is retained, the revised plan also prioritises “providing high quality investment opportunities across Greater Manchester that help to address disparities”.

IGAU’s analysis of this plan found a relatively good fit between areas of proposed new investment and areas of severe income deprivation. Of the 159 neighbourhoods (defined by LSOAs) that can be categorised as ‘severely income deprived’, 97 (61%) are within a three-mile radius of at least one of the proposed employment allocations identified. Of these, 43 are places that have been on a downward trajectory (getting worse in terms of income deprivation) since 2001. Of course, whether the sites actually bring benefits to local residents depends upon the volume and quality of the employment opportunities, the extent to which they are able to acquire relevant skills, accessible and affordable transport provision and many of the other issues raised elsewhere in this report. Plans for inner regeneration areas will need to include sufficient affordable housing, recognising the notion of the rights of lower income households to access the city and not be driven to the periphery and be judged not just in terms of reductions in deprivation rates, but absolute numbers of poorer households and benefits to those households. As we reported in Chapter 2, improvements in rates can be the result of gentrifying processes which may not impact on those at the bottom of the income distribution. Our consultation exercise identified a need for specific inclusive growth plans to be built into major regeneration schemes (both those already underway in particular local authority areas and those which are part of longer term plans) and for there to be some oversight of delivery of these plans, since the experience of past developments has often been that they have not yielded the benefits for existing residents that might be hoped for or expected.

In addition to the core proposals over the GMSF, plans also now include the Mayor’s Town Centres Challenge, incorporating a Mayoral Development Corporation (MDC) in Stockport, covering 130 acres of brownfield land and plans for a new urban village; and proposals for six other town centre schemes (Farnworth, Leigh, Prestwich, Stalybridge, Swinton, and Stretford), which have no core finance from GM but could include use of Compulsory Purchase Orders (CPOs) and Mayoral grants to kick-start planned developments.

GM’s Local Industrial Strategy also signals a less centric approach to the GM economy, founded partly on an analysis of GM’s economic complexity in the GMIPR. Among the GMLIS’ strategic priorities are to: ‘ensure a thriving and productive economy in all parts of GM, by maximising national and international assets, city and town centres, strategic employment locations and neighbourhoods’ (emphasis added), and the implementation plan emphasises the intention to “strengthen economic areas across the city region based on their unique opportunities and challenges, building on the diversity of its people and places”. As a starting point, each GM LA is setting out how the GMLIS links with the opportunities and barriers in their own locality, and plans will be developed to coordinate GM and district level implementation. What will be critical in this process is the link between the sectoral growth strategies in the GMLIS – health innovation, advanced materials and manufacturing and digital, creative and media – and the spatial elements, so that these growth sectors bring maximum benefits to less advantaged localities and neighbourhoods. This will need to involve multi-faceted (and joined up) approaches including development of local specialist clusters, spatial targeting in the development of skills pipelines for growing industries, and local supply chain development through business support, grants and procurement policies. Some of these opportunities are already signalled in the implementation plan, for example the development of creative clusters in Oldham and Ramsbottom and a digital cluster around Ashton Old Baths in Tameside. The GMLIS commits GM to consider creating a fund to grow local independent production companies as well as attracting others to relocate, with enhanced skills support to enable residents to access these opportunities. The next year will be important in the development of this approach.

The Social Enterprise strategy announced in the GMLIS is yet to emerge and at the time of writing, the recommendations of the Co-operative Commission are not yet known, so it is not yet clear whether there will be a GM-wide approach to developing the local social economy as part of strategies to reduce spatial inequalities and develop thriving and productive economies across GM. In a number of places in GM, work of this kind takes different forms. Salford is one of Social Enterprise UK’s Social Enterprise Cities. Activities coordinated by Salford Community and Voluntary Services (CVS) have included working with residents to identify how social enterprises could tackle local challenges, and establishing a knowledge bank/exchange. Wigan Council established a £10m Community Investment Fund to support community groups and projects working towards improving outcomes for local residents – ranging from small grants to community projects to social enterprise start-ups and a community cooperative. In Rochdale, Rochdale Stronger Together (a collaboration of local institutions) is working to support and promote co-operatives, social enterprises and other community businesses to become well-established local suppliers of goods and services. The Rochdale Social Enterprise and Co-operative Forum offers support and training to new co-ops and social enterprises.

In relation to all of these issues (major developments, development of local economies, links to growth sectors and development of the social economy in places), the GM model of unified public services, with its focus on integrated working in neighbourhood teams, offers a major opportunity. It is significant that the industrial strategy implementation plan under the theme of ‘place’ also has a strategic priority to “continue reforming public services to ensure local public services are focused on improving outcomes and reducing inequalities”, signalling the importance of social policy to economic performance. But the spatial focus and organisation also offers the potential both for an increased focus on community economic development and its linkage to joined-up services, and for integrating neighbourhood plans within plans for growth sectors and major developments. A forthcoming IGAU working paper suggests how GM can build on its analysis of economic complexity to take a more holistic view of the how the economic, social, cultural and natural assets of places combine to contribute to economic development.

Overall, the developments announced in 2019 represent clear intent at the GM level to take responsibility for spatial inequalities and put in place spatial strategies and delivery structures to reduce them. This fills a gap in English policy making, since central government withdrew from responsibility for spatial inequalities in 2010 and removed requirements and resources for LA level partnerships to do the same. There is potential to go further in building local inclusive economy plans and linking these to emerging neighbourhood-focused public service structures.

Learning from other places: see case studies 13,14,15.

Key points:

■ Action on inclusive growth must be informed by an understanding of who is not currently included and why, with tailored strategies to tackle between-group inequalities.

■ In GM, some progress has been made to recognise disparities between groups protected under the Equality Act 2010, and represent their needs in new GM-level panels.

■ However, measuring, tackling and monitoring equalities between groups has not being systematically built into inclusive growth policies.

■ Examples from other places suggest that more could be done to systematically assess the impact of policies on different groups and to develop tailored programmes as part of inclusive growth policies to reduce inequalities.

Addressing economic inequalities between social groups

Although much of the inclusive growth literature focuses on economic inequalities (i.e., between people in the distribution of educational attainments, jobs, wages, earnings, incomes, opportunities), inequalities between social groups in their access to and benefits from the economy are also a core part of the agenda. Inequalities between groups have been emphasised by both the RSA Commission, who noted that “the economy is experienced differently by different social or demographic groups”94 and the OECD framework for inclusive growth that clearly connects gender equality, diversity and non-discrimination to inclusive growth. Social and spatial inequalities are inter-related, since disadvantaged groups are more likely to live in disadvantaged areas,and this may compound their existing disadvantage.

Action on inclusive growth must be informed by an understanding of who is not currently included and why, with tailored strategies to remedy between-group inequalities and build equality in. Such strategies might be in relation to individuals, improving access and reducing barriers to labour market participation, and also in relation to institutions, for example improving support for women-led or minority-led businesses. These need to be underpinned by representative and consultative structures which allow multiple voices to be heard and address historical power imbalances in decision-making. This chapter focuses principally on two large axes of economic inequality: gender and ethnicity. Disparities can of course be traced on multiple other axes, typically according to the ‘protected characteristics’ in the 2010 Equality Act.

Addressing disparities in Greater Manchester

The GMS states under Priority 3 that, “Age, gender, sexual orientation, race, disability or socio-economic background should be no barrier to success in Greater Manchester” (p. 29). Equalities issues are prioritised in GM governance, with a portfolio in the Mayor’s Cabinet (originally ‘Fairness, Equality and Cohesion’, currently ‘Age-Friendly Greater Manchester and Equalities’). The principal developments in this space since 2016 have related to BME groups and to women, but they are limited.

In respect of ethnic inequalities, the need for attention to differences in economic outcomes has been highlighted through the work of the GM Cohesion Commission, established by the Mayor following the Manchester Arena attack. One of the Commission’s four objectives was to identify the “broader determinants of social exclusion” and in its report, the disparities between ethnic groups in economic opportunities and outcomes were identified as “likely to have a negative impact on social cohesion and may have an impact on risk of radicalisation” (p.6). The report advised that GMCA should accept all recommendations of IGAU’s paper on ethnic inequalities in the labour market. The recommendations include establishing regular monitoring (a local Race Disparity Audit and/or ethnic breakdowns of the key indicators in the GM outcomes framework); creating employment targets; making fair recruitment practices part of any new ‘good employment standards’ for GM and reviewing and dismantling barriers to the take up of apprenticeships by BME groups. The report also made recommendations for other GM public sector institutions, for the LEP and business representatives to develop strategies for increasing BME employment in relation to key growth sectors and strategies for meeting skills shortages.

Some of the Cohesion Commission’s recommendations have been taken forward but to date only in a limited way. The GM Good Employment Charter asks employers to sign up to “transparent, fair and inclusive practices” in recruitment and progression, and “fair and inclusive workplaces”. The GM Outcomes Framework includes disaggregated data for ethnic minorities for employment rates, although not in other areas. There has also been some work to recognise and measure the diversity of apprenticeships in GM, which was formalised in Manchester’s participation in the ‘5 Cities Project’. So far the outcomes have included: the GMCA report ‘Apprenticeships and diversity in context’ revealing the ethnicity gap in GM, the GMCA guidance for employers to increase apprentice diversity, and a target for reducing the ethnicity gap. However, there is no mention of ethnic inequalities made in the GMLIS or its implementation plan, and a very brief mention in the GMIPR.

At the time of writing there are plans to develop better links between BME communities and the work of the Combined Authority. The Mayor has requested that a series of roundtables are convened to explore the option of establishing a GM ‘faith and race equality panel’, and if so, what it should do, and who should be involved. This would bring faith and race representation in line with some other groups protected in the Equality Act, with representative panels; the Mayor established a Lesbian, Gay, Bisexual and Transgender (LGBT) panel in 2018, and a Disabled People’s Panel in 2019. It is unclear how the Panels formally relate to other existing structures. Gender equality issues have had a higher recent profile, perhaps partly because of active campaigning around the time of the mayoral election which elicited gender equality pledges from all mayoral candidates.

This followed longer-standing concerns about a lack of diversity at the GM decision-making table, and after the establishment of DivaManc that brought women’s voices into the devolution discussion. In 2018, the Mayor announced a gender-balanced Combined Authority, although this is limited in practice since the assistant portfolio leads (who make the authority balanced and are largely women) are not allowed to vote in meetings. As of March 2019, civil society actors and activities are being brought together in a ‘Women’s Voice group’, whose remit is ‘to check and challenge policymaking in Greater Manchester’. In the GM Outcomes Framework some attention is given to gendered inequalities, with disaggregated data by sex available on indicators (in priorities 1, 2 and 9) but comparison of disparities between the groups is not available.

These developments suggest that more attention to women’s economic position (for example in low paid and part time jobs) might be on the horizon. The GM Growth Hub has also recognised the need for dedicated business support for female-led businesses. The Hub has started analysing the gendered take-up of their current programmes and have announced plans to develop ‘female-focused programmes’ to encourage more women to start and scale up their own businesses. Details of these programmes are expected shortly.

In relation to gender, ethnicity or other protected characteristics, we find little evidence of impact assessment in the development of GMCA strategies. There has been one published equality impact assessment screening report in January 2019 for the GMSF, which found that “the draft GMSF is unlikely to have negative effects on protected characteristics or persons identified under the Equality Act 2010 and as a result a full EqIA will not be required at this stage”.

Equality impact assessments (EqIAs) can be carried out by public authorities prior to implementing a policy, in order to determine its potential impact on equality. Government bodies are not required by law to conduct such assessments, but they are required to meet their Public Sector Equality Duty, and the EqIA can be a useful tool to ensure they are complying with that duty. However, ensuring robust scrutiny of spending decisions and effective impact assessing requires capacity and resource, and while the creation of combined authorities has created another tier of public sector responsibility in which equalities must be considered, devolution settlements between central government and CAs have not devolved funds for equalities work.

Overall, tackling economic disparities between groups is an area of inclusive growth that is developing but lacking resource and direction in GM. There has been some progress in representation of excluded groups through the LGBT panel, disabled people’s panel, women’s voice group and now potentially a race and faith panel; however, their remit within existing structures could be clearer, as well as their involvement in tailoring policies. There has been less progress in the development of specific policies and their integration within economic strategies and broader inclusive growth policies. Measurement of inequalities and monitoring impact is also under-developed at this stage.

Learning from other places: see case studies 16,17,18,19.