In 2007, the thinktank Policy Exchange published a report called Cities Unlimited: Making Urban Regeneration Work. It offered a wide-ranging examination of the problems facing many cities and towns around the country where there were signs of long-term decline (with particular attention to cities on the coast).
The report made for sobering reading. It argued that for some towns and cities, which may once have been vital components of British economic and social life, “regeneration, in the sense of convergence, will not happen, because it is not possible”. But is that really the case, or can we imagine new possibilities?
The hard truth is that many of these cities are in what appear to be lose–lose situations. Already in decline, the road towards recovery and growth is made even more difficult. There are now fewer readily available government resources able to support economic development in these regions; and also, since the 1980s, the banking system has become more and more London-concentrated and consequently out of touch with local needs. As businesses gravitate towards more prosperous areas, more and more parts of the country find themselves facing significant financial exclusion.
Areas away from London, even when they grow economically, do so less quickly than London and the south-east generally. Lending too – whether in the form of mortgages, small business loans or personal loans – is concentrated overwhelmingly in London and the south-east, with areas in the north largely out of the loop. The economic gap between London and the south-east and the rest of the country does not seem likely to shrink at any point in the near future.
As the south-east grows, many cities are left feeling abandoned and hopeless. They are in dire need of economic rejuvenation, and they have the fewest resources with which to accomplish it. It is a vicious circle of decline. And while some excellent pieces of research have made recommendations on how to tackle this vicious circle – notably Lord Heseltine’s report No Stone Unturned: In Pursuit of Growth – their conclusions have not been taken as seriously as they should have been and remain, in large part, ignored.
Much of England is experiencing economic crisis. Our economy appears to be, in one sense, a tale of two cities – one being a growing and constantly improving London (and the south-east generally), and the other being most, but not all, other cities, alike in that they are each trapped in apparently inevitable decline.
Of course, London has many economic problems of its own. While on a national level entire cities are being cast aside and left to their own devices, one cannot walk the streets of London for long before realising that this national trend is happening at an individual level in this massive city. There is poverty around the corner from every multimillion and multibillion pound industry – individuals and families similarly trapped in apparently inescapable circles of despair.
This sketch of our current plight will not come as news to many. It is the reality we experience and see on a daily basis. And I believe that many of the prescribed remedies that so often accompany this diagnosis are deeply flawed.
The fallacy of economic rescue missions
There have been numerous and varied attempts by our governments to rescue cities in decline. There were significant efforts in economic planning in the 1960s, followed by the market-based trickle-down strategy of the 1980s and 90s. More recently, governments and planners have tried ideas such as regeneration-from-the-centre projects (known as the “doughnut effect”), investment in public transport networks, and investing in new housing and house-building. One thing all these strategies have in common is that none has experienced the success which was hoped for, or which was predicted. Nothing has really worked so far.
One example of the regeneration-from-the-centre approach is found in Liverpool, which I saw first-hand during my time as Dean of Liverpool Cathedral. The idea is that if one injects enough cash into local economies, the resulting economic production will have a ripple effect from the centre to the outskirts of the city. In Liverpool, the Liverpool One development resulted in investments of over £1bn in central Liverpool, and yet six years later the nearest boroughs of the city – just a 20-minute walk away – remain untransformed by the project’s impact.
The lack of success heralded by this approach, and the gap between highly affluent “centres” and the forgotten “inner suburbs”, can be seen most starkly in our capital city. Take the relationship between two of the most affluent and economically productive parts of London – the City of London and Canary Wharf – and the boroughs around them which include some of the most hard-pressed parts of the city.
In the shadows of some of our most successful businesses, the boroughs of Tower Hamlets, Hackney and Newham see few of the benefits that the City and Canary Wharf offer the economy. According to official statistics, around three-quarters of these areas are among the 20% most deprived in the country. An article in The Economist, written as far back as 2002, vividly captured the failure of this theory when it described the “British doughnut” as “a lump of indifferent carbohydrate with jam in the middle … rich inner-city development surrounded by acres of gloom”.
Other approaches have been proposed by academics, planners, thinktanks and politicians, and they appear to be becoming more radical in their suggested remedies for the decline of our cities. One view is that the demands of the changing marketplace cannot, ultimately, be resisted and so the remedy is to plan for continued growth in London and the south-east while the rest of the country, especially the northern cities, declines and stagnates.
This is economic determinism at its extreme. Many of these cities have been world leaders in industry for decades – whether trade in Liverpool, textiles in Manchester and the surrounding towns, or mining and other heavy industry in the cities of the north-east – and such an approach writes off the possibility that we can achieve the leap of imagination that will transform these places into economic hubs once again.
We are not alone in trying (and failing) to find solutions to the problem of urban regeneration and more general economic malaise. It is equally hard to find examples of other countries where economic problems are solved with purely economic solutions. France continues to struggle despite increases in government spending and taxation. The south of Europe remains in many cases mired in deep depression, with the threat of deflation, and economists throughout the Continent are voicing despair as to whether the current situation will ever change.
There is one factor that unites those engaged in the debate. They all assume that the value of a given community is founded solely on its economic output. This is the fundamental sin of our economic rescue missions. We have convinced ourselves that economic problems can be solved with economic solutions alone.
Economics is not an exact science – because it deals with the aggregate of human decisions. Economists are sometimes accused of treating selfishness as the characteristic human trait, but the economist’s job is to make generalisations that help predict how people will behave in response to various stimuli. On aggregate, an assumption that people follow their own interests seems to be true. But that does not make it a truth for every person all the time. If people decide to behave altruistically, as many have done over the issue of Fair Trade, for example, the economic models will reflect that fact. In other words, we are not controlled by economic models – economic models reflect our collective choices.
So while it is true that many of the cities studied in the Cities Unlimited report have continued down the path of decline and despair, a small number have experienced radical and unpredicted renewal, and are now flourishing and growing.
For example, according to a 2013 report by the Confederation of British Industries (CBI), Leeds – one of those cities “pre-destined for failure” – has flourished in a way that other cities have not. The report identifies local choices like the creation of new office space for professional services as the driving force behind its regeneration, and, while policies like this are not a panacea for every struggling city, the example gives hope that the problems we are facing today can be addressed.
Recent developments in Manchester, both encouraged by and driving an ability to attract young entrepreneurs and innovators from across the globe, are also noteworthy and offer signs of hope. The decision to move a large part of the BBC’s structures to and the development of “Media City” in Salford have already shown a positive impact on the regeneration of areas outside the centre of Manchester, as have developments around the City of Manchester Stadium in Eastlands and rapid expansion of the tram system. These positive examples of urban regeneration highlight that there is no “one-size-fits-all” approach to regeneration, and that it is vital for holistic and specifically local responses to be supported and developed.
Elsewhere there are also signs of hope, with the Church acting as catalyst and convenor. Across the country, we are beginning to see the development of well-structured and researched local initiatives focused on improving social inclusion, particularly in major cities. These initiatives have brought together the facts of unacceptable inequalities and identified integrated responses from the widest range of statutory, local authority, business, third sector and faith organisations and their leaders.
One excellent example of such an initiative is the National Social Inclusion Network, which drew together 17 cities and boroughs to sign the Birmingham Declaration in March 2014. The network was convened by the Right Revd David Urquhart, the bishop of Birmingham, with a spirit of fresh determination to promote social inclusion and ask the government to release resources to allow local leaders to get on with the job of improving social inclusion at the local level – a call that echoes the central recommendations of Lord Heseltine’s report, cited previously.
While I am delighted that these efforts appear to be making progress in tackling the problems found in modern cities in England, we cannot be satisfied with solutions based entirely on economic determinism. Nor can governments by themselves solve the problem. More dependency on cash injected on the basis of some grand plan or strategy, or dependency on the collateral benefits of a free market, are not sufficient answers. Our economic crisis is not fundamentally an economic problem. We must dig deeper. Our economic crisis is a theological problem.
Justin Welby is the archbishop of Canterbury. This article, reprinted with permission of SPCK, is extracted from On Rock or Sand? Firm Foundations for Britain’s Future, edited by John Sentamu and available for £7.99 from the Guardian Bookshop.
