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Each week there are hundreds of pieces of research that are relevant to those working in local authorities. Much of the work is well-evidenced, thought-provoking and demands more of our attention than we can afford to give it. While often we might not necessarily agree with comments or recommendations contained within research, it is always important to be aware of new thoughts, ideas and the views of others.
In this Local Government faculty newsletter we have selected a piece of recent research, Out of Shape: Taking the Pulse of the UK Economy, by Institute for Public Policy Research (IPPR) that we think is worth you knowing about and summarised its key message.
The research looks at the whole of the UK economy and explores its vulnerability. It identifies that there is too little investment, both public and private and that productivity is persistently low.
Whilst acknowledging that over the last three years, the UK economy has been steadily growing at more than 2% a year, it challenges the assertion that Britain is ‘the strongest major advanced economy in the world’ (HM Treasury 2016).
The report identifies six symptoms and takes these in turn as they examine the causes of economic weakness:
Symptom 1: The investment problem
We invest substantially less than our peers in other developed countries, and investment as a proportion of GDP has been declining.
Symptom 2: The trade problem
We import far more by value than we export, and this problem, too, has been worsening over time.
Symptom 3: The fiscal problem
The government’s revenue-raising capacity is lower than its spending obligations, and is set to deteriorate further as the population ages.
Symptom 4: The income problem
Most of the gains from economic growth low to a small minority of the very richest in society, while those on lower incomes have seen their incomes stagnate.
Symptom 5: The regional problem
London and the South East perform significantly better than the rest of the UK in terms of income and productivity, leading to widening regional inequality.
Symptom 6: The carbon problem
We are falling short of the emissions reductions required to achieve our statutory carbon targets, and thereby to meet our global commitments on tackling climate change.
Following the analysis of these symptoms the report’s conclusion suggests that there is something fundamentally wrong with the way our economy works and questions whether the very character and structure of the economy need to be rethought.
They are subsequently launched the IPPR Commission on Economic Justice which over the next two years, will conduct a comprehensive examination of the British economy.
We look forward to seeing how the commission progresses over the next 24 months.