Beyond shipbuilding and shrinking funds: Where now for Newcastle?
The decline of manufacturing and the impact of public sector cuts are creating a perfect storm in Newcastle’s marginalised areas. Can the city forge a new vision that goes beyond municipalism and industrial growth?
As Newcastle was negotiating the sign-off of the region’s £1.5bn devolution deal last month, a group representing civil society and small businesses in the city was planning its own collaborative deal.
The fifth ‘Activating Local Alternative Economies’ event took place in Newcastle in mid-October, bringing together representatives from the small business sector, and from community and health organisations and the arts.
Devolution will bring much needed funding to the region but the jury is out on how much of that funding will reach into deprived communities and re-build a vision for the region’s prosperity.
Newcastle has been audible and public about the impact of ‘impossible’ public sector cuts on the city. It slashed almost its entire arts budget and plans to cut a total of £108m from city spending by 2017. Leader of the council Nick Forbes told New Start, ‘The government’s ongoing austerity programme has been extremely difficult for Newcastle and is likely to be very challenging in the coming years.’
‘The city has lost its sense of vision, as public
sector leadership gives way to growing fragmentation’
For a city that has been heavily reliant on the public sector and municipalist in its outlook, the blow has been particularly deep. On top of public sector cuts, Newcastle is reeling from the closure of the Northern Rock Foundation, which provided philanthropic capital for the region’s civil society, making £225m worth of grants in the area between 1998 and 2014. And as a city that symbolises heavy industry more perhaps than any other UK city, the decline of its shipbuilding and other manufacturing businesses has left a deep scar.
It is not only funding and jobs that have been lost through the double whammy of austerity measures and industrial decline. Those who attended the event talked passionately about the impact of cuts on local communities, but also about the way that the city has lost its sense of vision, as public sector leadership gives way to growing fragmentation. Networks that had previously provided a channel for people to come together and discuss local issues – from local strategic partnerships to regional development agencies – have fallen victim to cuts or public sector reorganisation. Many voluntary and community sector organisations that provided support are struggling with increased demand and a fall in funding, and cross sector working and understanding has fallen away.
‘What keeps me awake at night are the growing numbers of poorer working people and the lack of ways to hold creative conversations around solutions’, one delegate said.
As Gillian Hewitson – chief executive of skills and employment partnership Newcastle Futures – points out elsewhere in this edition, face-to-face collaboration has become a luxury. And the partnerships that now exist – local enterprise partnerships and the combined authority – are more narrow in their focus, delegates said.
So can local organisations work together more closely not only to fill the gaps left by funding cuts but also to create a new vision for their city?
New approaches are being tested
While a sense of fragmentation exists in Newcastle, there are also examples of how austerity has created opportunities for new approaches within the city and the wider region.
In Durham the Federation of Small Businesses teamed up with the council in 2009 on the UK’s first social value taskforce, bringing together a range of groups including the North East Procurement Organisation, County Durham Economic Partnership, Social Enterprise UK and various departments of Durham Council.
The aim of the taskforce was to make public sector procurement work harder for its local economy by increasing the amount spent with local small and medium-sized businesses and the third sector and building greater social value into procurement processes. The shift has had a big impact since it started working, increasing the amount of local spend and embedding social value within the supply chain.
Jamie Thomas, sustainable procurement officer at Durham Council, says: ‘By taking steps to ensure our procurement process is sensitive to environmental issues, supports community benefits, and provides as much opportunity as possible to local suppliers (particularly SMEs and smaller third sector organisations), we serve the wider public good – which is why the council exists in the first place.’
Arts and culture organisations have also been learning to work in partnership for their own benefit and for the greater common good. Culture has been at the heart of Gateshead’s regeneration and restructuring of the area beyond heavy industry since the late 90s when the Angel of the North sculpture heralded a new wave of cultural buildings from the Baltic art gallery to the Sage concert hall. In 2009 cultural organisations across Newcastle and Gateshead came together to create a strong collective voice – Newcastle Gateshead Cultural Venues – through which they share learning and resources, collaborate on initiatives and and measure and monitor their economic impact.
And in Walker – a deprived area on the banks of the Tyne – a two-year programme of work to develop local resilience initiated by Building Futures East and facilitated by CLES, brought together partners from the university, philanthropic and small business sectors to find new ways to stimulate local entrepreneurialism.
The difficulties of doing something different
Newcastle is not alone in needing to find new ways to stimulate and strengthen its local economies beyond a reliance on public sector largesse or strong economic growth. But its industrial, working class heritage means that it is perhaps more paternalistic than other core cities, still heavily reliant on industry and development, and, as some delegates pointed out, resistant to change.
‘Newcastle is very risk averse’, one delegate said. ‘We operate within the same limited thought processes and are stuck in that frame.’
The work on local resilience undertaken by Building Futures East (BFE) and CLES revealed the difficulties of introducing new ways of working.
‘Paternalism towards Walker and similar places, means that agencies
want to provide for them rather than work together with local citizens’
During the programme, BFE worked with the Federation of Small Businesses, Northumbria University and the community sector to create a model for how local partners can work together to stimulate local economic activity in marginalised communities.
It set out to be different to previous local partnerships or regeneration activity by starting from the basis that extra resources or new interventions were not what Walker needed; instead it aimed to build on the human, community, financial and physical assets in the area and to stimulate local action and raise levels of self-esteem and entrepreneurialism.
A number of practical solutions have got off the ground – including a micro grant funding dinner, Walker Soup – but the final report into the programme highlighted the difficulties of making partnerships meaningful in communities and of translating ‘goodwill into real action.’
The attempt to do things differently came up against resistance, not only from local people weary and wary of the ‘new’ but also from public and social sectors unwilling to admit that their way had failed. The evident paternalism towards Walker and many places like it, means that agencies want to provide for them rather than work together with local citizens, the report said.
The reliance on the dominant economic model – growth and the associated regeneration benefits – found people struggling to see what could happen without significant growth or financial resource.
How can the issues identified in Walker – in particular a cultural resistance to change and a reliance on mainstream models of boosting economic activity – be challenged and confronted?
Getting a social ask from big business
A potential key partner in local collaboration – and one that delegates suggested is preventing change in economic policy in the city – is big business.
For a city whose prosperity was built on shipbuilding and heavy industry, its reliance on big business is hard to shake off. Participants in the debate said the city is gripped by the success of Nissan UK – whose headquarters are in Sunderland – and focuses its economic policy on replicating that success.
One participant said that the leadership in the city gets ‘sucked into a national agenda rather than thinking about the strengths that the city has’ and worried that devolution would create an even greater gap between local needs and the broader economic agenda.
Newcastle Council says it is proud to be home to Nissan UK and the UK’s biggest software company Sage, and currently spends £189,000 a year on inward investment.
There are examples within the city of good corporate social responsibility, including the Sage Foundation, and the now defunct Northern Rock Foundation. But there are also examples of big businesses doing little to give back to the city or help address social issues such as youth unemployment.
Walker is home to oil and gas companies but only one – Shepherd Offshore – purposely helps enable people from the local area to access jobs there. As a result 80% of people in the area think that the jobs available at those businesses are not for them.
A key question for Newcastle and for many cities is how can big business be brought in as part of the solution? How can it play a deeper role within the communities in which it operates?
Joining the dots to create an alternative
The questions raised during the ‘Activating Local Alternative Economies’ debate do not currently have answers. But the debate sparked enthusiasm and energy for finding ways to join the dots in local resources and build and strengthen local relationships.
Participants at the event – who came from a wide range of organisational types – were keen to find ways in which they could think differently about their own approach and input to the local economy. The Tyneside Cinema, for example, where the event was held, has recently shifted its mission to focus on community, and has a strong programme of events, from training young people in film-making to dementia-friendly film screenings. As a venue it has a lot of spare capacity which could be used by other community organisations looking for space. Its is looking closely at all of its processes – from commissioning to spend – to ensure that it benefits the local area.
The delegates are keen to keep up the momentum and enthusiasm for working more closely across the region. During the debate they considered models to help dialogue take place in the city, such as the art world’s successful What Next? conversations, which convene discussion around the future of arts funding. Could a similar model be used to bring together partners around solutions to a more resilient local economy?
The event concluded with a decision to plan a future event called the ‘Alternative State of the City’, to bring together a wider range of local partners interested in working together for the common good.
For as austerity deepens, it will be local resources and local relationships that will make a difference to areas that are suffering.
As one delegate said: ‘In successful places, people talk to each other and come up with ideas together.’
- This Newcastle edition is part of a series of city editions mapping alternative local economics in the UK.