After Covid-19 let’s not return to business-as-usual
AThe impact of coronavirus has hit like a tidal wave, brutally exposing the fragility of our economy. In response, economic orthodoxy has been turned on its head – the government is paying employees’ wages, with targeted economic intervention once thought impossible being scaled up on an almost daily basis. All of this is entirely necessary. We need bold measures that protect businesses and put pounds in people’s pockets during an enforced economic shutdown. But we need to be thinking, too, of where we go next.
When the virus recedes – when the crisis abates – what will be left? And what kind of economy should we be seeking to build in Northern Ireland? A return to normal would be a mistake: even at the end of 2019, growth was anaemic, and the Northern Irish economy was still smaller – in real terms – than it had been back in 2007. For a long time, the Northern Irish economy has not been working well for people and place. Productivity was stagnant. Poverty and inequality remain stubbornly entrenched and we have the highest rate of economic inactivity across the UK (27%) – an unenviable record we have held for over 30 years.
Business-as-usual wasn’t working before – it definitely won’t save us now. Instead, as we emerge from this crisis, we need to build back better, forging an economy across NI shaped by the principles of community and cooperation, with inclusivity and resilience at its heart. We need to seize opportunities presenting themselves. How do we respond to the spectre of climate emergency? How can we build a green new deal into our industrial strategy? What are the key features of our new welfare system and what should a social contract between citizens and state say about the society we want to live in post Covid?
We need change, in part, because we will have no other choice. The ‘bounceback’ idea – that we will see a large crash, followed by an equally rapid recovery – seems more and more unlikely, not least as the crisis, soon to be followed by Brexit, creates supply chain and connectivity issues between NI and Great Britain and the Republic of Ireland (ROI). Economic estimates for the impact on Northern Ireland are starting to filter through, and they paint a grim picture. In early April, economists at Ulster University estimated a 9.6% fall in output across Northern Ireland through to June, with close to 250,000 employees – 44% of the NI private sector workforce – either placed on furlough or temporarily laid off.
A week later, the Office for Budgetary Responsibility estimated an all-UK fall of 35%. Work by the Centre for Progressive Policy, mapping these figures onto local authority areas, found that Mid Ulster and Mid and East Antrim look set to be worst hit, with respective falls of 45% and 40% in economic output. Even the least affected areas in NI, Belfast and Derry City and Strabane, are still looking at 30% falls in output. We are through the looking glass here.
So where, then, should we be looking to end up? Our organisations – the Centre for Local Economic Strategies, and Development Trusts Northern Ireland – have been working closely on developing policy and practice to progress more resilient local economies. Last year, we published a report – ‘Time to Build an Inclusive Local Economy’ setting out a community wealth building approach to building inclusive local economies: the time has definitely arrived to apply and develop this work. The ABCD of inclusive economies that we identified – advancing community power; building local community wealth; commissioning and procuring for social value; and developing finance to support local economies – is essential now, as we seek to rescue, recover and reform the Northern Irish economy.
Indeed, as public officers, councillors, MLAs, the civil society sector, businesses and communities start to look towards this recovery and rebuilding process, it is crucial this agenda – working on the ground in localities across Northern Ireland and Great Britain – is embraced and amplified at scale. As part of this, CLES last week published ‘Owning the Future’ & ‘Rescue, recover, reform’ which detail the issues we face and how the growing community wealth building movement offers answers and a practical way forward. Central to this is a framework for how we rescue, recover and reform the economy. At its heart, this work asserts that there is now a pressing need to develop – at scale – community wealth building strategies which advance plural forms of economic ownership, with a greater role for the social and democratic economy.
In NI we already have the seeds of a more inclusive economy. We have some of the most progressive community development trusts & associations working across the UK and Ireland. Our reformed local government authorities can play an enhanced role in regeneration and economic renewal, deepening democracy & civic participation delivering social change. An inclusive economy can be achieved when the public, social and commercial sectors mutually support and develop one another and are unafraid to build relationships and share power.
In recent days and weeks, we have openly acknowledged and been dependent upon the work of community to help navigate the public health crisis. A key next step is to recognise that community has a role to play beyond food distribution, prescription delivery and befriending. They can be supported to emerge as community businesses, as benefit societies and worker cooperatives working in partnership with the public and independent private sector to seed and build new business models to meet public service needs be that health & social care or housing for example.
One way to germinate those seeds is through a broader use of our public assets – our land and buildings creating more opportunity for community management and ownership, by investing in and building the skills and talent in our communities to generate economic benefits that build long lasting prosperity.
Of course, in these immediate moments and the coming months, our first priority has to be on prioritising public health. But, when it comes to recovery and building a better NI, we also need to recognise this virus has confronted us with a choice. Do we carry on doing things the way we had been doing them before? Going all in on attracting foreign direct investment, and hoping the wealth trickles down? Treating community and the social economy as a nice afterthought? Or do we build on the existing and untapped potential and ingenuity of all our communities and recognise that things could be different – indeed, that they must be different?
With high levels of public spending in Northern Ireland, we have a massive and scalable opportunity to build on existing inclusive local economy work and do things differently – building an economy that truly works for all. This work needs to be progressed at all levels, from Stormont down, and from the community up. We owe it to each other to ensure this happens. From the importance of key workers, to the strength of community, to the power of the state, this crisis has exposed much that we cannot ignore – from this, there can be no return to business-as-usual.
Additional reporting: Charlie Fisher (DTNI) and Neil McInroy (CLES)
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