Economy
Supporting Local Businesses for Community Resilience
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In the wider economy, we know that the doctrine of “Trickle Down” doesn’t work – giving money or tax breaks to the wealthiest people or businesses in society, in the hope that the benefits will trickle down to the poorest.
At a local level, attempts persist to support the ‘local’ economy by investing in places that are doing well (our town and city centres, or the most successful business districts). In practice, “Trickle Down” becomes “Trickle Away,” and inequalities worsen, with little of this investment reaching more deprived neighbourhoods. This is partly because so much of the investment gets eaten up in large contracts with developers or by companies based outside the region.
A Green Mayor would seek opportunities to invest differently:
- Investing directly within local neighbourhoods
- Supporting locally based businesses and SMEs
- Enabling smaller firms to win public procurement contracts.
Investing in neighbourhoods
I would increase funds available for community projects, with decisions on how to spend the money made by community groups who can commit to core aims of sharing best practice and increasing neighbourhood resilience.
Assistance would be given to groups working within more deprived neighbourhoods. Any funding for less deprived areas would depend on plans to share learning and to give support to a community without access to private funds.
Supporting local businesses
Supporting local businesses is not a priority solely because they are best placed to serve the specific needs of their neighbours and communities, though that is often the case. Money spent within the local or neighbourhood economy is more likely to circulate locally:
- A local small or medium sized enterprise (SME) is more likely to employ local tradespersons or professional advisers, rather than being bound by national contracts.
- Their profits will usually be spent locally, supporting further jobs and services, rather than feeding corporate HQ costs or shareholders.
- Successful local shopping districts reduce the need for people to travel into city centres or to large out of town developments, as they can attain the goods and services they require locally.
- Thriving local businesses are a key component of the self-reliant communities that lie at the heart of the Green vision for the North East – better able to look after those who are vulnerable, better able to adapt to the challenges of climate breakdown, and better able to thrive sustainably.
Larger businesses are better placed to absorb periods of financial hardship whereas the smaller, local businesses do not have the infrastructure or resources to do so. Big business can often use its financial muscle to devastating effect – putting smaller shops out of business, forcing farmers to sell at a loss or even paying rents on local closed premises to keep them empty. My role as a Green Mayor will be to level the playing field, so that local businesses can withstand these pressures and communities can be more self-reliant.
Enabling smaller firms to win public contracts
Whether in relation to traditional construction work or new digital infrastructure, smaller, specialist companies have a lot to offer but have been poorly served by public procurement practices. Too often, funding for major developments has been rolled into large contracts, for which only the very largest national or multinational companies are able to tender. Smaller companies are reduced to the crumbs of subcontracts provided by the big contractors, often having to travel further to find work, and too often left high and dry when large contractors have failed. In return, local public services lose out on the benefits that smaller, more agile contractors can bring, in terms of innovation, customer service and value for money in the long term.
As your Green Mayor, I would be committed to changing this, unlocking more public contracts for smaller firms. This could start with subdividing major contracts for Mayoral funding, by taking more of the project management and short-term risks in-house. Longer term, I would work with the North East Procurement Organisation (NEPO) to provide more project management services to local authorities within the region, building on their work to divide contracts into smaller ‘lots’. This would enable more public procurement money to go where it can best serve our communities, instead of being locked up in big contracts that chiefly serve the construction or digital giants.
Wellbeing economic indicators
One of the North of Tyne Combined Authority (NoTCA) projects which would be continued across the wider North East, would be the wellbeing framework developed by NoTCA in 2021/22. Economic wellbeing cannot be adequately measured by conventional indicators like Gross Domestic Product (GDP). GDP is a poor indicator of true progress and does not adequately measure people’s sense of wellbeing – it measures only the activity in the formal sector, regardless of what that activity is or even whether it is beneficial to society. The NoTCA wellbeing framework attempts to measure social, economic, environmental and democratic wellbeing. While its range of data may be too complex to produce the clear indicators of wellbeing required (and in many instances, the dashboard is not kept sufficiently up to date), the principles are correct. With sufficient revision for the new devolution deal and powers, this wellbeing framework will be used by your Green Mayor for the North East.
A brilliant example of the sharing economy operating at local level. Andrew Gray met Councillor Sarah McKeown in December 2023. Her Toy Collective has found new homes for thousands of unwanted toys each year, reducing waste and providing Christmas presents for some of the most deprived families in South Shields.