Case study: Developing an inclusive growth agenda in Rotterdam

24th Jan 2017

Rotterdam is the second largest city of the Netherlands with a population of approximately 624,000. Following around 20 years of population decline, it saw population growth from the mid-1980s onwards.

The city is divided into two parts by the Nieuwe Maas channel: a more prosperous north and a more disadvantaged south. Rotterdam’s port is the largest in Europe and remains a key driver of development in the city, although port-based employment has declined at 2% per year from the mid-1980s, and the city economy has diversified with growth of important sectors in health, distribution, consumer services, knowledge and education. The port-industrial complex is one of the economic clusters selected by the city leadership as key to future development, along with the health/medical (concentrated around the Erasmus University Medical Centre) and the creative sector.

The port boomed in the 1960s and early 1970s and workers came to the city from southern Europe, Turkey and Morocco. The port was badly hit by the oil crises of 1973 and 1979, employment declined and port-based activities shifted westwards. The immigrant population of the area increased and approximately half of Rotterdam’s residents (or their parents) are foreign-born. 30% of the population is under the age of 25. Rotterdam’s unemployment rate is higher than nationally, while the level of average educational qualifications is lower than average.

Governance

In the Netherlands there are three levels of government: central government; twelve provinces; and municipalities. Rotterdam is part of the province of South Holland and is part of the Randstad (a conurbation of urban agglomerations), the Metropolitan Region of Rotterdam–The Hague, and the Urban Region of Rotterdam.

The central government sets out a policy framework and collects and redistributes state budgets. Provinces are responsible for the coordination of public policies such as planning, transport, culture and social affairs.

The implementation of significant parts of national level policies has been devolved to municipalities, especially regarding welfare policy – with municipalities taking charge of the welfare budget for those residents (nearly 39,000) who do not qualify for unemployment benefit. The social security system of the Netherlands is based on social insurance and supplementary income support provisions. The main principle of the system is that all members of society must be able to play an equally active role in society.

While the responsibilities of municipalities are increasing – including new responsibilities for home care services, budgets are declining: the total budget of Rotterdam decreased from €4.4 billion in 2010 to €3.8 billion in 2014. Of the municipal budget of €3.6 billion in 2016, over €2 billion was spent on social activities, with the largest single share to social welfare.

Nationally the Urban Agenda is undergoing some major changes and ‘City Deals’ (modelled on those in the UK) are being negotiated. City Deals do not provide any new funding, but pool existing resources and allow for a temporary adjustment of regulations for innovative pilot projects.

City governance in Rotterdam comprises a Mayor and vice mayors at the top level. Rotterdam City Council is made up of 45 elected members, who are elected every four years. At the second level there is a share service centre and staff at city hall. At the third level there are five service clusters:

  • economic development and physical planning
  • physical repair and cleaning
  • welfare and job finding
  • social development (including education, health care, sports, etc.) and
  • public services.

Overall, the city is characterised by very open channels of communication – including with the Mayor.

There is an appetite in Rotterdam for experimenting with innovative governance and incentive systems; 5% of the city budget set aside for innovative approaches and some empowered civil servants (‘city marines’) work closely with the Mayor.

Strategy, Vision and Leadership

The emphasis in Rotterdam has tended to be on actively ‘doing projects’, rather than a ‘top down’ approach of setting ‘broad goals’ and relying on formalised ‘strategic partnerships’ to take them forward.

Nevertheless, the municipality, local partners and experts (including higher education institutions, NGOs and, in some cases, representatives from the private sector) have formulated a series of strategic plans/development frameworks. Several of these have made links between the port and the city. For example, Koers 2005 (‘Destinations 2005’) was a strategic development framework, positioning the city as a service centre for transport and logistics and an incubator for new economic activities (including the creative industries).

More recently ‘Rotterdam 2042: Connected Port City’ positions the city to include the Port, with a strong focus on sustainable growth. In May 2016 Rotterdam published a Resilience Strategy, underpinned by a vision for a sustainable, safe, inclusive and healthy future, as part of the Rockefeller Foundation’s ‘Resilient Cities’ framework which aims to help build resilience to the physical, social, and economic challenges in the 21st century. There are seven objectives:

  • a balanced community with skilled, active and engaged citizens
  • a global port city running on clean and reliable energy
  • cyber port city
  • resilience to climate change taken to a new level
  • infrastructure for the 21st century
  • a network city – in which residents, public and private organisations, businesses and knowledge institutions together determine the resilience of the city and
  • embedding resilience in the city.

South Rotterdam (the poorer part of the city with a large immigrant population) is the subject of a national level long-term strategy that combines urban regeneration and active labour market inclusion policies to:

  • promote entrepreneurship and
  • combat poverty in seven focal districts.

The project plan was signed in 2011, with 17 public and private partners (including the City Council, social housing corporations, schools, NGOs, etc.). It focuses on education, labour market inclusion and improvement of public and private spaces.

In a ‘Children’s Zone’ (modelled on US experience), which forms part of the South Rotterdam programme, in the poorest neighbourhoods extra funding is being used to support children’s personal social development, alongside an aim of closing the attainment gap with the rest of the city.

Another key element in fostering inclusion in Rotterdam is the use of public procurement. Since 1996 any company tendering for local government contracts worth more than €225,000 is obliged to dedicate a minimum of 5% of the contract value to creating employment opportunities for people currently on social benefits, young people on apprenticeships and those supported under the Dutch Sheltered Employment Act.

Since 2009 this rule has been integrated into municipal procurement policy. Privatised (former municipal) services, such as public transport and harbour services have ratified the 5% settlement initiative and apply it in their own procurement process. Employers are supported in meeting the expectations of the public procurement rule by a service centre run by the City’s public employment service in co-operation with the private sector.

Housing policy has evolved over time to focus on developing greater choice for residents. Renting has an important role in the Netherlands and housing corporations are important actors. Recently the focus on urban renewal involved citizens having a role in co-creating the city and making central areas more attractive for living and working.

The Act on Exceptional Measures Concerning Inner-City Problems, 2005, limits the proportion of low-income households in designated deprived urban areas on the grounds that they cannot accommodate any more vulnerable residents. The Act is in effect in certain designated areas in Rotterdam. Critics argue that the Act violates the rights of vulnerable groups and indirectly limits the housing choices of disadvantaged ethnic minorities (Tersteeg et al., 2014). In general the aim of policy in the city is to create mixed neighbourhoods.

Design, Implementation, Monitoring

In Rotterdam there is a tradition of partnership working – often involving informal or voluntary collaboration alongside or instead of more formal approaches. In Rotterdam there is an increasing trend towards emphasising co-creation in formulating policy. Some interviewees spoke about partnership working being part of a ‘mindset of co-operation’, characterised by an open approach in dealing with challenges, getting a range of people involved and trying new ideas. Partnership working often spans the public, private and NGO sectors.

The municipality of Rotterdam actively finds space for implementing experimental and innovative projects with a view to acting as a catalyst for change. Much policy design is informed by international experience.

Rotterdam pioneered the use of social impact bonds in continental Europe to tackle low youth employment rates. The ‘Buzinezzclub’ project aimed to empower disadvantaged young people by providing individualised coaching and training to young people while continuing to receive benefits, and provided savings for the municipality and returns for investors.

Exemplar themes

Activation policy and civil contribution

Following the ‘Participation Act’ of 2015 Social assistance is no longer an unconditional right: recipients of social assistance and services are expected to make a civil contribution. This can include volunteering, sheltered employment with training, undertaking caring responsibilities, language or physical training, or working on personal issues (which may be medical, mental, financial or social in nature).

The initiative has resulted in more and better connections between service providers in the welfare, health and other associated policy domains. At the end of April 2016 there were 8,000 registered civil contribution contracts in Rotterdam, of which 4,000 concerned voluntary work. Evidence indicates that, in general, participants have better self-reported health as they climb up the ‘participation ladder’:

  • living in isolation
  • increased social contacts
  • participating in organised activities
  • an unpaid job
  • a paid job with support and
  • a paid job.

Emerging evidence indicates that the social return on investment is positive and that community initiatives are growing, that there is increased inter-ethnic contact and that volunteering helps to reduce loneliness and increase emancipation and integration.

Social enterprise and entrepreneurship

In Delfshaven, an area to the west of the main centre of Rotterdam, the Delfshaven Cooperative is an exemplar of residents, local entrepreneurs, the City Council and other institutions working together.

Formed by a local bank, housing association, local entrepreneurs and residents, with support from the City Council, the Cooperation has a long-term strategy to develop an attractive and entrepreneurial district, with an emphasis on converting empty buildings to house new functions/act as meeting places, and to improve quality of life.

The future of work: from ‘jobs’ to repackaging tasks into ‘work’, microfranchising and 21st Century Skills for the Next Economy

Middle level jobs are declining and low-skilled jobs are being increasingly splintered into ‘tasks’, with zero hours contracts being replaced by the ‘gig economy’ in which organisations contract with independent workers for short-term engagements. A new pilot initiative in Rotterdam involves  microfranchising (building on experience in developing countries to combat poverty), identifying and matching individuals to tasks that they can do on their own with existing skills and minimal equipment, while dealing centrally with issues of branding, price setting, administration and payment.

The idea was developed by ‘Rotterdam Partners’. Related to the future of work there is a focus on the development of ‘21st Century Skills’. The emphasis here is on development of digital skills, enterprise skills and personal leadership skills for the Next Economy.

Synthesis and Conclusion

A broad shift from government to society is evident in Rotterdam. In part this may be viewed as a response to austerity, but it may also be seen as important in a longer-term strategy for building resilience, enabling connections and fostering inclusive growth. It is part of an asset-based approach to community and urban development.

For more information and references, see our report and appendix.