Last Wednesday, the Chancellor spent quite a lot of his spring budget speech talking about ‘productivity’ and growth. By coincidence, many miles north of Westminster in Yorkshire, CTP and our partners at CLES were also exploring routes to productivity and growth. Here we explore the very different visions of those concepts that emerged and ask: exactly what should our ‘productivity’ produce?

Confusingly, much of what the Chancellor said about ‘productivity’ wasn’t actually referring to economic productivity – the standard measure of ‘growth’– although there was also plenty of other talk about economic growth. Instead, the word was bandied around when talking about the NHS and Local Authorities, and how well they are able to meet their statutory duties.

The general implication was that these institutions, which are on their knees from lack of investment, could solve the crisis they are in by being more ‘productive’. Perhaps their state of crisis is not so much about the decades of severe underfunding, his language suggested, but rather, whatever the opposite of ‘productivity’ is in our imaginations – inefficiency, poor management, laziness and poor value for money. If less time and money were ‘wasted’ and their systems were more ‘productive’ then all would be well with our hospitals, GPs, care systems, schools and streets.

CTP and our partners spend a lot of time arguing that ‘productivity’ is a limited and often unhelpful measure of economic progress. For a moment last week though, the Chancellor didn’t use it in this way at all, but instead, unwittingly revealed the actually intensely ideological basis for the current government’s views on ‘productivity’ as a concept: ‘something vaguely to do with not being inefficient and wasteful’ – a moral judgement rather than an economic descriptor of value.

Either way, though, whether we’re talking about efficiency at doing something well, or GVA growth, very few people are asking what is it, exactly, that we should want to be actually productive at doing?

Is there another way to look at productivity and growth that might radically change both the political discourse AND the outcomes for people, communities and the planet? 

Luckily, that conversation is alive and well in many corners of the UK. As the Chancellor stood at the dispatch box, CTP and our partners at CLES were in Leeds with regional and local leaders from across West Yorkshire who were asking how exactly to invest resources, structure services and link up policy to produce better quality of life, less inequality and a radically better distribution of economic wealth across demographic groups in the region.

The focus of the question was, in fact, very specifically how to make the most efficient and productive use of decimated local government budgets, and unpredictable and often short term pots of central government investment into the region through devolution, to actually deliver wellbeing and sustainability outcomes. Part of that discussion absolutely revolved around making the best use of limited capacity in the local authorities and NHS to deliver growth in better health outcomes, proportion of high quality jobs, retention of locally produced wealth. 

‘If we were to look at how efficiently every pound spent or hour worked delivers human and planetary wellbeing, our notion of productivity would be very different’

The conversation also unpacked how closing the economic productivity gap in a couple of the region’s potentially high growth sectors, including advanced manufacturing, could be done efficiently – to generate growth in skills levels in young people, the number of people shifting from low paid to higher paid jobs and the size of the decarbonised economy. Those discussions are transformed when the focus is on the ‘what’ we are producing – and shifting that to growing our collective capacity to thrive now and into the future.

If we were to reflect this approach nationally, and look at how efficiently every pound spent or hour worked actually delivers human and planetary wellbeing, then our notion of productivity would be very different to the dogwhistle reference to supposedly bloated public services and narrow idea of growth as an end in itself regardless of who benefits.

Funding arms to fight global wars, subsidising the oil and gas industry to pollute our atmosphere, investing in major financial corporations to hand out eye-watering bonuses to shareholders, might be productive in converting pounds spent to more pounds produced and consumed, but they could never be considered productive at improving lives.

There is an extraordinary disconnect between the ‘value’ that we place on time spent teaching our children, caring for our older citizens, nursing our sick people, cleaning our streets and growing our food, and our sense of how ‘productive’ these parts of the economy are. Their value is almost immeasurable if we were judging their productivity in converting each pound spent to the increase in the quality of life of every citizen. If the productivity metric was ‘who is converting pounds to long term human and planetary wellbeing?’, all our focus and investment would be chasing this goal.

This sort of productivity would also transform our ambition for ‘growth’. Our ability to have clean energy for generations to come, our capacity to build more houses that provide shelter and community, our ability to move between places safely, cleanly and affordably, the education of our children to grow up to be citizens able to improve their own and each other’s lives – these are the things that need to grow, and our economy needs to be vastly more efficient and productive at delivering them than it currently is.

All around the country, local leaders are stuck between these two worlds which are in fact extremely challenging to smoothly, efficiently and productively link together. 

The directive from central government is to increase inward investment in growing a region’s productivity in order to contribute to national UK economic GDP, regardless of how much of that is generated through low paid jobs and wealth extracting development, or how tangential that growth is to the lived experience of local service provision or liveability. 

By contrast, the needs of the real world they can see on every street, in every hospital, school and community centre around them, actually demand different kinds of economic interventions – like growing local wealth retention, raising wages in foundational sectors, reducing extreme inequality in living standards, or tackling carbon reduction and nature recovery. In this reality, there are often extraordinary levels of productivity – producing healthier citizens, brighter young people and investing in local business. There are legions of people working to ‘grow’ these outcomes of the economy, starved of investment by those who define that work as unproductive and of minimal value.

CTP is working with many of these courageous and conflicted local leaders – supporting them to choose a different compass by which to define the success and growth they know is needed, helping them wrestle power and resource, and supporting them to shape local economic policies, strategies and investments to deliver a growth in the conditions for us all to thrive.

Liz Zeidler, Chief Executive and Rachel Laurence, Deputy Chief Executive

If you’d like help to forge a new era of productivity and growth in your area, get in touch at hello@centreforthrivingplaces.org

Photo by Yan Krukau on Pexels