Prosperity and poverty – the challenge of social renewal in difficult times

The Chris Patten Lecture, given by Julia Unwin at Newcastle Institute for Social Renewal.

Why now?

I started to write this lecture a few months ago. I wrote quite a lot about how places shape our sense of who we are. I had nice tables showing the disparity between different places in the UK, their economic outcomes, their social costs, and the mismatch of social capital.

And then, like so many of us, I became transfixed by the changing politics of the world we inhabit. First, of course, Brexit, and the knowledge that we all had on the morning of June 24th that there were parts of the country that felt so disconnected, so overlooked, so powerless to change, that they were willing to vote not just against the advice of the major political parties and most of British business, but also in ways that were, on the surface at least, diametrically opposed to their interests. Analysts analysed, pundits opined, JRF published research – and all of us, whether those who feared a life outside the EU or those who longed for a new self-directed world of sovereignty, recognised both that things had changed, and changed utterly, and that volatility was going to be the dominant experience of the next decade.

And then this month, confounding pollster predictions once again, the people of the United States elected a president who pledged that ‘the forgotten man and woman will never be forgotten again.’ A president who gained support from people who felt left behind and disenfranchised, and who, on this occasion at least, made their voices heard in ways that are deeply uncomfortable to those of us who may need to get used to being described as the cultural, or the political elite. 

I am no political theorist but a number of things come to me clearly from these two massive political reversals to the status quo.

  1. There is anger and despair among people who feel that our current political and economic settlement has done them no good. And they are not wrong.
  2. There are places both in the UK and in the USA in which hardship is concentrated and opportunity attenuated; where prospects are limited and poverty feels locked in.
  3. There is a tension – described, I think inaccurately, as the culture wars – between those who welcome change, freely adopt and discard identities, feel little loyalty to place, region or nation, and readily trade with their skills and their assets, and those who feel deep roots in places, a sense of huge loyalty to family, to town or region, a fear of change, and perhaps a nostalgia for the past.

We can divide and analyse people on all those familiar axes of income, generation, race, ethnicity, education and religion and gender, but at heart there are some very different experiences. And these experiences relate to place as much as they do to people. There are places that feel left behind and overlooked. There are places that feel they’re the end of the line, and in many ways they are. There are coastal communities that feel that are hanging on. And there are places of energy and drive; places where possibility seems endless; where history gives pride, not shame. 

Place matters

I don’t like to make assumptions, but I suspect that not that many lectures in the name of the great Chris Patten, let alone lectures in the Hershel building, start with asking you to fire up your imagination. Yet if social renewal is to start anywhere, it needs to start with imagination, with dreaming.

So I’d like to ask you to start by imagining a road in an area you know – a street with an artisan bakery, a gorgeous-looking coffee shop, a small art gallery selling prints, a fishmonger that looks as if it has been there for a century but actually opened only a few years ago, a shop selling only children’s shoes… You imagine this street in any city in the UK and you know that you are in a place of wealth, of comfort, of high esteem; a place with disposable, discretionary cash.

Now I’d like to ask you to imagine another street, in another place you know well – a street with cheap alcohol for sale, fast food, and very expensive finance; a chemist with bars on the window; a pound shop that’s closing down. You know you are in a place of low prospects; high deprivation. You won’t be terribly surprised if the pavements in the second place are full of litter. A place with little cash, and no wealth.

You are all clever people so if I asked you to do it, you could probably estimate with a reasonable degree of accuracy the incomes in the houses and flats off these high streets. Within a reasonable margin of error you could probably assess the rateable values, land values, the wage levels. You would not find it hard to have a stab at working out the costs of the local health service, the police and the social care budgets. And I bet you could also tell me the attainment levels in the local schools. You might risk making some judgements about the people, who live near these two streets, and you might be right, but you might be very wrong. Certainly if you start to calibrate levels of neighbourliness, social capital, and engagement you might be well off the mark. But if either of these streets is threatened by the establishment of a noisy, smelly new garage and paint spray shop, I think you could place a pretty accurate bet on which of these two places would succeed in preventing the planning permission.

So place matters. The feeling of the place matters. The sense of personal value, and the notion of worth and contribution, is profoundly affected by place. The ability to fight off depredations varies by place. The confidence that your child will succeed is affected by place, and any intervention that ignores place risks ignoring what is most important to us and to those we love. Self-esteem is associated with place. Your locus of control is associated with place; your sense of personal power and agency.

So much is evident and known. It is catalogued and described. The data is correlated and examined and the links between poverty and place have been made by organisations like JRF, and the Newcastle Institute of Social Renewal in this great civic university. 

Poverty in the UK

JRF knows from decades of research that poverty in the UK is real. In our major strategy published a couple of months ago we demonstrated that 13.5 million people in the UK do not have enough to get by. We showed that this level of poverty is damaging, of course it is, to individuals and households. But we also showed that it is enormously damaging to both our economy and our sense of social solidarity. It costs the nation, the region and the city dear. It wastes skills and aptitude that we desperately need. And it risks the social cohesion, the sense of hope and opportunity that is essential to our country’s well-being. We also demonstrated that it can be solved, and that the opportunity to solve poverty challenges governments in all parts of the UK, regional and local government, but also the great civic institutions such as universities, businesses, and voluntary and community organisations, as well as people who are themselves in poverty.  

Poverty harms us all, and we all have a role to play in addressing it. It’s not about them; it’s about all of us.

Shocks and changes

Today, in one of my final speeches after a decade at the helm of JRF, I want to reflect on what this means at a time of huge change and volatility. I want to think about what transition and change means for our great cities, and for our mission of social renewal, and of course I want to consider what this means for people and places in poverty.

Because shocks have dominated the last decade. The 2008 global financial crisis saw queues to take out cash from household-name banks; it saw the mobilisation of global financial muscle to hold the economy firm; and it severely dented any trust that had been previously held by the public in our great financial institutions – rapidly followed by the parliamentary expenses scandal, which did the same to trust and confidence in our parliamentary representatives. And, of course, the vast costs of steadying the economy fell directly on the public purse, and led to the severe reductions in public expenditure, under the name of austerity. From 2010 onwards, significant changes in public expenditure left local authorities facing nightmarish decisions, and has undeniably eroded their capacity to provide services, and support wider civil society. No discussion about place and poverty would be complete without a starting recognition that significant reductions in public expenditure and investment have fundamentally changed both the nature of place, the demands on the people living and working there, and their opportunities to respond. 

The 2016 shock in the UK: a  vote to ‘take back control’, signalling clearly that for many people and places safety first was no longer safe, a vote which will result in economic volatility and change, whatever your personal views about the vote.

And throughout, the shocks delivered by a globalised world in which an Iron Curtain no longer exerts control, and where people moving across nations and across seas nightly assail our television screens, and very often, our consciences.

A decade in which the way in which we describe people who are poor descended into a toxic discourse, pitting the poor against the very poor, and blaming those people and places disadvantaged by the global race as variously losers, or deliberately useless. A discourse that veers between pity and scorn is no way to build the confidence and resilience that global volatility requires.  

Those shocks and reversals will be no surprise to the people in the North East, who have lived through their own decades of change. The impact of deindustrialisation in this region was harsh and the hard work to recover from that has been both admirable and demanding. The transformed skyline – and fortunes – of Newcastle is testimony to the ambition and capability of civic and business leaders, but it does not, and should not, mask the very real hardship and suffering in many of the surrounding towns and villages, as well as within the city itself.

And people living in those areas and considering their futures know only too well the changes that affect them every day of their lives. Globalisation has brought massive advantages and opportunities. But it has also allowed a labour market that, at least at the murky end, is characterised more by insecurity, poor pay and conditions, minimal prospects and a level of casualisation that would have been familiar 100 years ago. The impact of automation, robotics and machine learning promises great liberation for many, but job losses and transformation for many. The British Retail Consortium predicts a loss of half a million jobs by the end of the decade. That is a loss as significant as major deindustrialisation, and its impact will be as severe – just this time it is women’s jobs, in the poorest places and it will be dispersed. You can describe the jobs that are to go as the dull, dirty, demeaning and dangerous, if you wish. But if their loss is not to result in outright destitution, we need to plan for transition. You can sagely note that over time all change creates other jobs – but you cannot ignore the impact of the shock and the management of that transition.

Just down the road in Redcar, the steel works are already closed and decades of economic certainty, if not prosperity, comes to a juddering halt. The global commodity price has a direct and immediate impact of the people of Redcar, and the costs of that huge change fall immediately upon the public purse.

Newcastle is a city built on Irish migration, and witnessed a growth in the total of non-UK born population of over 100% in the first decade of the 20th century. It has never been immune to the global shocks that generate migration – but the ways in which places respond both to the economic imperative of migration, as well as the voluntary movement of people, speaks directly to both economic prosperity and social renewal. Our hyper-diverse cities have great economic, social and cultural strengths, and migration has brought benefits. But alongside opportunity comes risk, and the requirement to plan for transition and change. It is no coincidence that the places most protected from immigration are also frequently the places most fearful of it. Young people growing up without experience of diversity and difference will find survival in our modern world hard. But there is no hiding from the distress and discomfort felt by many places as they change in nature and feel.

Economic and labour shocks are ever present, and the pace of them seems to many to have only got faster.

Shocks also to our social infrastructure, as the vast achievement of so many of us living longer and surviving dread diseases means that we have a population with more people with disabilities, more people with long-term medical conditions, more people suffering poor mental health. 

Why cities matter

Cities are central to the development of our world. By 2030, urban areas are expected to house 60% of the world’s population and generate up to 80% of global economic growth. Over the last 50 years, the percentage of people living in cities has increased from 34% to 54% and is believed to rise up to 66% by 2050, according to a report published in 2014 by the UN. 

In the UK, 61% of growth is generated by city regions. Nearly half the UK population lives within the largest 15 metropolitan centres and, if the UK’s top 15 metropolitan centres were to realise their potential, it is estimated they would generate an additional £79 billion growth.

Cities are powerful and dynamic engines of growth. They are growing in importance and impact. They can be the sources of innovation and creativity, bringing people together in new and unexpected ways and spawning the cultural quarters, the digital innovation, the start-ups and connections that enable modern growth. They can be places where independence flourishes, where identity can be reinvented, where people can flourish and grow. Our very recent history has seen the cultural renaissance of Newcastle, the regeneration of central Bristol, the retail revolution of Leeds. It has witnessed the flowering of Cardiff, Glasgow, Edinburgh and Belfast, and the impact of the City of Culture in Hull and in Derry.

Across the UK, cities were physically remodelled in the 1990s and early part of this century. They were bashed and damaged by the global financial crisis of 2008, and now they enjoy (if that is the right word) the prospect of changes to the administrative, legislative and political architecture.

Cities good and bad

In short, cities can be the place we become our best selves, the place where our human ingenuity and our capacity to support each other flourishes.

They can be places of sanctuary, providing warmth and a place for new and different identities to flourish. Look at the ways in which some cities have absorbed, welcomed and celebrated the arrival of immigrants with distinctive cultures, cuisines and capabilities. Look at the confidence and security of the ‘gay quarters’ of the 1990s, providing safety and support, and so often also supporting creativity and cultural reinvention. Cities can be places where we can be ourselves, liberated from some of the more stultifying aspects of small-town life, and even, occasionally, our own families.

But cities can also be places of isolation, of poverty, and of misery. They can become places where innovation and creativity are driven out; where the bonds of social engagement are attenuated and where solidarity is fatally eroded. They can become places where poverty is locked in. Places where progression and development is prohibited. Places where people without the support of family find alternative social networks impossible to access. Places which, while not actively hostile to the incomer, afford them so little welcome that in effect they remain forever the stranger.

Why social capital matters to cities

It is the depth and the breadth of social capital in cities that distinguishes the creative, lively, bonded city from the miserable dystopia I have painted. Cities where everyone is too busy to interact breed loneliness and despair. Cities where automation has made every interaction a soulless one, driving out human contact in the interests of speed and efficiency. Cities where the more vulnerable are shunned and ignored are cities of fear, not to mention huge potential costs. And cities where one of the very many people in the early stages of dementia receive no neighbourly support, and can only turn to A&E and the police, are cities that will be expensive to run.

Cities need the skills and assets of all their citizens. If people with money desert the city centre because of violence and danger, those centres will never thrive. If people, as they reach retirement age, leave the cities in which they worked, the city loses wisdom, and civic leadership. If cities are unaffordable for young people, they lose economic potential. And if the nature of the return to growth simply locks poverty into particular areas, those cities will never become the engines of sustained growth and prosperity that a poverty-free UK demands.

Social capital is not an optional extra for a city. It is as fundamental as the financial capital and the skills base of any successful city. Social renewal is central to any chance of economic renewal.

The language of cities and the language of social capital

When we talk about cities we talk about the physical infrastructure, we talk about inward investment, skills matrices and the role of powerful institutions. When we talk about social capital we talk about kindness and generosity. We talk about families and neighbours. We talk about affinity and belonging, of liveability, and about happiness and love. When we talk about cities we use the skills of economics and of physical planning. When we talk about social capital we learn from neuroscience and from behavioural economics. As so often these days I end up looking at Canada and the pioneering work of Charles Montgomery on what makes people happy, and therefore makes their cities successful.

It’s high time we talked about these things together.

What do we mean by social capital?

I identify three layers of social capital that are as essential in big cities as they are in tiny villages.

First there is the largely unexplored world of everyday kindness which the Joseph Rowntree Foundation examined in a neighbourhood in Glasgow. Community participants were asked to list the everyday, often unacknowledged, favours, bits of help and mutual help. Rather beautifully, one described it as ‘spraying water on a spider’s web’ and some were amazed both at the strength of this apparently fragile web, but also its breadth and reach. Equally, others noted quite how thin their webs of support were, and how desperately isolated they were. This essentially reciprocal and vital layer of social capital needs nurture and care. It does not happen by accident and there are steps we can take to preserve and grow, just as surely as we can destroy.

We know that neighbourhood responses to poverty always start at this level. It is the shared fiver that circulates in so many families and social groups, the short-term mini loans. It is the offers to babysit and the introduction to possible job starts, the offer of a sofa for a teenager that stops her from becoming homeless. Word of mouth and social networks are, and always have been, the frontline defence against poverty.

The second layer involves the many organisations, groups, associations and businesses which contributed to help happening in a place – what sits between the very informal, person-to-person helping relationships and formal help and care.

The middle layer has an important role to play in creating the conditions for ‘ordinary kindness’, simply by encouraging social interaction. Groups, organisations and associations draw people together through shared interest or purpose; and they provide spaces within which interaction can happen. As such, they serve as junction boxes, connecting diverse strands of community and social networks. These networks and groups demand fostering and support, and in our age of harsh austerity frequently suffer first.

While there may be an apparent fit between the community sector and notions of everyday help and support, ‘ordinary kindnesses’ are evident in corporate or commercial settings too – whether a supermarket, café or corner shop. For example, in one area of Glasgow, the local supermarket was a place where interactions of kindness and help happened. In another area it was the local café that served as a meeting point and a source of help for local parents with children.

It is often when individuals transcend their formal or scripted roles that there is the greatest scope for small acts and relationships of help and support to emerge.

The third layer is the institutions that govern, as well as serve, the city, the neighbourhood. They are the ones that frequently absorb the available resource and talent. The anchor institutions, the housing associations, the local authority, the hospital, the university, and the funded voluntary organisation. How much do these bodies foster social capital? Are they providing services to customers, or are they building the strength and resilience of the communities they exist to serve?

Perhaps even more crucially, how much are these institutions and economic systems enabling the pre-conditions for strong social capital?

Because we know what starves social capital and therefore prohibits social renewal. We know that people who are deeply insecure are much less likely to contribute to their communities and neighbourhoods. We know that anxiety and a lack of time make engagement challenging. And of course we know that the 13.5 million people living in poverty are insecure, anxious and – juggling multiple responsibilities – frequently very short of time. We know that isolation and loneliness drains social capital, and we know that hyper mobility makes involvement difficult. Someone on a six-month tenancy, or waiting for a change in tenure because their household income has crept above £30,000, will not contribute the glue that makes social renewal possible.

And we also know quite a bit about what feeds social capital. We know that good connections can build social solidarity; that digital engagement is as important as transport connections in building links and engagement; that kindness matters as much as utility; and that confident neighbourhoods advocate more effectively than distressed ones.

Critically we know that economic renewal without social renewal is dangerous and arid. And that social renewal without economic renewal is simply managed decline.

So fostering civil society and associational life is essential for the well-being of cities, their citizens and the places within them. It is also of critical and non-negotiable importance for the economic recovery and viability of a place.

So what can we do?

  1. We need to start to see civil society and associational life as a good in itself. In a world where we measure outcomes, and evaluate impact, we need to be brave enough to say that the gathering of people, their shared enterprise, and their collective voice is a good in itself. That we may not like the product – I have faced more than my fair share of angry residents’ meetings to know we will not always agree – but the power of the collective and the fostering of shared purpose is in itself something worthy of cultivation, and support. We need to recognise that social resilience in our fast-changing world doesn’t happen because we wish it. We need the will to focus on the means and not just the end. We need to foster self-esteem, and a sense of personal agency, not because it is nice to do, but because our shared survival depends upon it.
  2. We need to recognise the economic power of civil society. The anchor institutions that exist in every city in the country – the hospitals, the universities and the local authorities – need to be joined by the arts centres, and the voluntary bodies, the housing associations and the community groups that one way or another have deep roots in every economy. These institutions have huge transactional power – their supply chains and their HR practices shape fundamentally the economy in which they operate. But they also have huge emotional power, which is equally economic and goes way beyond the transactional. They can inspire confidence and pride, can represent what is best in a place, can encourage and reward, and in so doing support that intangible sense of confidence, and of opportunity, which is so central to economic performance. The University of Toronto, reported by Atkinson Foundation, used its procurement power to support the long supply chain of food production in the region to transform the local economy – a conscious use of economic power to rebuild and strengthen what was a source of pride in the first place.
  3. And we need to take seriously the health of civil society, just as we take seriously the health of the market. Our new shared language needs to encompass not just GVA, and inward investment metrics, it also needs to understand the relationships between neighbourhoods and within them. We need to understand in fine-grained detail not just the skills mix in places, but the bundle of attitudes, hopes, fears and expectation that determine whether or not people can take the jobs on their doorstep. It needs to understand with clarity and certainty the ways in which waves of migrants benefit a place, or don’t. We need to be clear that the ways in which the private rented sector is organised in a place has a direct impact on the health and well-being of that place.

In this talk I have argued that we live in uncertain and volatile times. I know that is a not a particularly controversial thing to say!

I have argued that we need strong social renewal if we are ever to achieve the sort of economic renewal and growth that we need. And those cities, and the institutions within those cities, are central to achieving that goal of a new and more sustainable prosperity.

I want to conclude by arguing that the hard work of social renewal in our cities is neither optional nor easy. It will involve complex trade-offs and a form of democratic engagement that will challenge many of our institutions and ways of operating. Crucially it will involve a steely focus on the eradication of poverty, because continuing high levels of poverty undermine our economic opportunities, our social solidarity and any prospects at all of achieving prosperity.

Social renewal is not easy.

It involves the recasting of relationships, and challenges established places of power. It recognises, for example, the strengths and resilience of some of the hardest-pressed communities, the power of individual story tellers and history holders. It is messy because it involves peoples’ feeling and the ways people get on. It pays attention to the intangible and the relational, as much as to the structural. It involves speaking of unspeakable things, engaging with things that are even more difficult than spreadsheets and Gantt charts. It requires us all to understand that the front line in the fight against poverty is always, and always has been, the family friend who gives someone a start in a job, the kindness of the aunt who lets her nephew sleep on her couch, the favours granted, the skills swapped. It is only when these are all exhausted, and frequently exhausted by the actions of the same local state, that people turn to the more impersonal agencies of the state.

It involves local authorities – as so many are now doing so effectively – working to build a new prosperity; working with business, and with civil society, with cathedrals and universities, community centres and theatres, to develop a coherent voice for the place, to advocate effectively for their place.

But continuing high levels of poverty will undermine this goal. It will cost too much, it will waste too many skills, and what we have learned, painfully over the last few years, is that it will divide and toxify. The sort of poverty that is witnessed across the North East is the sort of poverty that holds the region back, and makes the dreams of a stronger and more inclusive region harder to achieve. An alliance between civil societies, the democratic institutions and the proud businesses of this region have between them many of the tools to eradicate this damaging poverty:

  • inclusive growth that means the benefits of growth are felt across the region, means that decisions about growth, about inward investment, skills planning, procurement and recruitment all need to be done with a clear focus on poverty. What will they do for the poorest people and places is the first and last agenda item for any organisation concerned with the future prosperity of the region. Several of the states of the USA know, and say clearly that they know, that attracting some employers just proves to be too expensive for the local state. Temporary unreliable work costs state institutions too much. So too in the UK we need to consider the real costs of some business practices
  • a concerted focus on the costs facing poorer households – the costs of housing, of childcare, of borrowing – is creating misery across this region. Together, reducing those costs can be a purpose for all involved in seeking long-term prosperity
  • using the economic power of civil society to ensure that money spent in this region, plays its part in transforming the fortunes of this region.

In conclusion, I read in the New Yorker this weekend that President Obama explained the recent election to his daughters as follows:

People are complicated. This is not mathematics. This is biology and chemistry. These are living organisms and it’s messy.
Barack Obama

There could be no better ending to a talk given in honour of Chris Patten, in the cause of social renewal, than the recognition that the challenge of solving poverty in our great cities will not be done by big systems change alone. It will be done by the way in which we foster relationships, build communities that have voice, resilience and confidence, and recognise that economic renewal and social renewal can never again be separated.

The Autumn statement tomorrow will promise change. Of course it will. They always do. But those of us with a purpose of social renewal need to remember that the change won’t come because it is mandated. It will come because people in communities – and places in poverty – feel the confidence to demand the real and lasting change that they so urgently need. That will only happen when we pay close attention to what is really happening, and avoid being deafened by the voices of people far away.