Questions and answers about coronavirus and the UK economy

#economicsfest: How can Bristol and the West of England ‘build back better’?

The pandemic is an opportunity to return to something better than ‘normal’, both nationally and in individual cities and regions. Just as Covid-19 has had varied effects across the UK, the recovery process could give local policy-makers the chance to shape the revival.

This year’s Bristol Festival of Economics featured two online discussions of the response to Covid-19 in Bristol and the West of England, both events emphasising how recovery should be combined with building a green and inclusive city-region. 

The two panels – ‘Building Bristol Back Better, Principles into Practice’ and ‘Responding, Recovering and Rebuilding from Covid in Bristol and the West of England’ – considered how the local economy could be tilted towards a more sustainable, fairer and inclusive model, and emphasised the need for regional collaboration to achieve this goal. 

Access the recordings here (Building Bristol back better) and here (Responding, recovering and rebuilding).

Bristol is home to several high-value industries, but has historic deficiencies in public transport and infrastructure, high costs of living (including housing) and large inequalities in income and education across areas and ethnic groups. The city also has concerning levels of inequality in wealth and opportunity. These conditions have not only shaped its experience of the Covid-19 crisis so far but are also important considerations in the process of recovery.

What are the roles of local and national level support?

Questions around which decisions should be made locally, and whether support is needed from central government, are crucial in evaluating how an area should respond to an economic and public health shock. Many argue that a collaborative approach is required – between central and local government; and between community and elected leaders. 

Bristol’s One City Plan provides an example of this. The level of funding available to local government is a key factor in how an area is able to respond to the challenges posed by the pandemic.

Related question: How is coronavirus affecting local government finances?

Melissa Mean at Knowle West Media Centre highlighted the importance of the community sector in recovery plans. Such organisations understand and are able to respond to the needs of the local area, which can help to ensure that emerging funding programmes reach the right recipients. 

Examples in Bristol and the West of England include Ambition Lawrence Weston, which has developed a community-owned wind-turbine and a community-led housing project; bio-manufacturing developed by the Onion Collective; and community-led housing facilitated by Knowle West Media Centre

Melissa Mean noted the importance of removing barriers for entry for community organisations, and for equal support during the current crisis – the total recovery fund from central government for charities has been £750 million, compared with £600 million for Tesco alone. Increasing support for community-led projects could pave the way for producer surplus to be held and shared locally. Such initiatives that respond to local needs are likely to also provide social benefit. 

The mayoral system and the role of elected leaders also play a role in shaping the recovery process in Bristol and the West of England. Since cities like Bristol are obliged to compete for investment with other cities around the world, leadership figures, whether selected through local election or by community groups, can have a substantial effect on what resources are allocated to an area.

Decisions taken by central government in response to Britain leaving the European Union also have localised effects, playing a part in how cities or regions will perform during the next phase of the pandemic and the recovery process. Although predicted to bring with it an additional shock to the UK economy, Brexit may grant businesses in Bristol and the West of England more flexibility on procurement and help to facilitate an increase in ‘buy local’ consumption patterns. Platforms such as Business West may well provide an important platform for trade after January 2021.

Green recovery: what next for the local economy?

While Covid-19 and Brexit are important factors in shaping both national and local economic outlooks, the need to mitigate climate change, environmental degradation and damage to biodiversity poses additional policy challenges and economic constraints. 

For example, one sector that is particularly vulnerable at both a national and local level is agriculture, where the combined challenges of the pandemic, the post-Brexit trade deal and the environment threaten to harm an already struggling and uncompetitive industry.

Related question: #economicsfest: What future for farming and the food supply chain?

For Bristol, a significant challenge is the balancing act of encouraging people and businesses back to the city centre. Covid-19 has accelerated the trend to online shopping, and as Melissa Mean argued,  ‘retail and offices can’t save city centres’. Quality investments are needed to facilitate renewal and growth, with walking and cycling routes particularly desirable to counter the shift to private transport that has occurred during the pandemic. There is also a need to inform residents about the relative safely (in terms of transmission of infections) of public transport to reduce car use. 

Related question: Can recovery from Covid-19 help transition to a zero-carbon economy?

In the West of England, redevelopment projects along the seafront in Weston-super-Mare provide an example of public investment improving the quality of life and economic circumstances. If the need for open space grows, redevelopment plans of this nature may form a crucial component in the wider regional recovery plans. 
Similar projects also bring with them opportunities for data scientists, urban planners and events specialists working in partnership with community organisations to bring outdoor events and festivals back to the city and surrounding area.

Related question: #economicsfest: How can the arts recover?

What role could local currency and Bristol Pay have in the region’s recovery plan? 

Diana Finch introduced Bristol Pay, which aims to keep card transaction charges from leaving the city, instead investing them in local social and environmental projects through CityFunds. Transaction charges (such as those levied on purchases using GooglePay) are estimated to capture around £60 million each year. Finding a way to harness this revenue and stop it from leaving the region could provide another channel through which to bolster the post-Covid-19 recovery.

Bristol Pay has been developed in response to the increasing prevalence of ‘fintech’, replacing the local cash currency – the Bristol pound. The economic rationale for local currency is to support local businesses. The New Economics Foundation found that money spent with independent businesses circulates in the local economy for longer than money spent at a high street chain.

But evidence on local currency suggests that they have a low survival rate, and the economic benefits are often not realised (Evans, 2009). Finding new ways to retain transaction charges in the region may be a step towards increasing funding for targeted improvement projects in Bristol and the surrounding area.

What gets measured gets done: how to keep the local recovery on track 

At both festival events, it was argued that measuring important outcomes is crucial in helping Bristol and the West of England move to a greener and more inclusive economy. The first step is to define outcomes and objectives more broadly than economic growth to include health and wellbeing. 

Measurable indicators for cultural change, in addition to green targets, could provide useful metrics for tracking the process of ‘building back better’. One potential starting point is the Thriving Places Index, produced by the Centre for Thriving Places, which provides summary scores for local authorities across many domains, including green infrastructure, community cohesion and mental health. 

Related question: What are the key sources of data for measuring the economy in a crisis?

How can local policy-makers ensure that Bristol builds back better?

Zara Nanu of Gapsquare argued that in the face of the Covid-19 crisis, it may now be time to experiment with local solutions. Her argument was that change will happen slowly from within communities and that policy-makers should engage entrepreneurs in this process and promote experimentation in existing and new businesses. Entrepreneurs come from across sectors, and to promote entrepreneurialism, particularly among younger people, policy-makers should aim to remove jargon and make conversations around new business ventures accessible and broad in their reach.

Another important factor for building back better that was emphasised by the festival panels concerns diversity and inclusion. The importance of inclusion in the digital economy was of particular concern. The value of connectivity is not new on the policy agenda, with economists arguing that there is a case for government investment in public infrastructure, such as broadband, particularly in areas where private companies might not have the incentives to provide it.

The panels also discussed diversity with reference to businesses: a broad range of businesses should be encouraged to provide resilience against economic shocks, and, as Zara Nanu noted, all businesses should have a social core. Indeed, it was reported that organisations that have diversified are better able to react to challenges as they have already been ‘shaken up’. 

What is the role of a living wage and universal basic income in the region’s recovery?

The crisis is exacerbating inequalities, with women and of minority ethnic groups disproportionately affected by job losses. This trend is seen nationally, as well as in local areas.

Reducing inequality was central to the panel discussions. Methods to achieve this include introducing a living wage (wages above the national minimum wage to allow a decent standard of living) and potentially introducing a ‘universal basic income’ (UBI).

Zara Nanu commented that the government’s furlough programme was a missed opportunity to trial UBI, while Charles Larking of the Institute for Policy Research felt that automation and changes in the structure of the economy may at some point make UBI ‘essential, rather than optional’. 

Economists have summarised the evidence for UBI for the Economics Observatory, concluding that it is an expensive way to reduce poverty. There may, however, be improvements or reductions to productivity in the long run, depending on individuals’ responses to changing work incentives (Kumar and Roy, 2020).

For Zara Nanu, Covid-19 has exposed discrepancies in the occupations that people value as well as the occupations that are well paid. How this can be addressed depends on whether existing pay gaps purely reflect supply and demand, or whether existing trends persist. In any case, the pandemic has exposed what some see as misallocations in remuneration, and the recovery process, both at national and local level, provides an opportunity for reform.

Where next for Bristol and the West of England?

For the city-region, there are numerous factors to consider in building back better. Once the targets for improvement and recovery are established, it remains clear that different sectors must work together to achieve the region’s goals. Local government as well as community groups could play a vital part in improving these conditions. 

The panellists in both discussions were clear in arguing that the recovery must strive to be inclusive, and that environmental considerations ought not to be overlooked. As the region moves into the recovery phase of the pandemic, there are a number of challenges ahead, but the call for experimentation could help to combat some of these issues.

At the core of the recovery is the issue of establishing what is it that local and national policy-makers are aiming to improve when they build back better. The unanimous call for measurement across a range of important indicators was seen as essential for ensuring that the city and surrounding areas not only recover but also thrive. 

Where can I find out more?

Who are experts on this question?

  • Diana Finch, Managing Director of Bristol Pound CIC
  • Charles Larkin, Director of Research at the Institute for Policy Research, University of Bath
  • Zara Nanu, CEO of Gapsquare
  • Ed Rowberry, Chief Executive of Bristol & Bath Regional Capital (BBRC)
  • Richard Bonner of Arcadis, President of the Bristol Chamber of Commerce and Initiative
  • Melissa Mean, Head of Arts Programme at Knowle West Media Centre
Author: Ellen Greaves

Published on: 20th Nov 2020

Last updated on: 27th Nov 2020

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