Economics

The UK Prosperity Index has some harsh lessons for Westminster

The sooner true devolution starts, the sooner the people of Bolsover will feel as happy as those in west Somerset

BY Cristina Odone   /  13 October 2016

London is the richest but among the least prosperous bits of the country; Surrey is not the stockbroker belt but a caring sharing place where neighbours run one another’s errands; the North East is the best place outside of London to start a business.

Just some of the preconceptions overturned in the first-ever UK Prosperity Index, published today by the Legatum Institute. Defining prosperity as wealth and wellbeing, the index offers an in-depth analysis of the 389 local authority areas across several sectors – including health, education, business and social capital. It’s a look at Britain that may have the Government calling for a blindfold: here, in scary numbers, are the huge challenges it faces to “make this country work for everyone”.

The index measures the gaps between incomes, housing prices and life expectancy that divide winners and losers in 2016 Britain. There are fewer surprises here. The median annual earnings in Kensington and Chelsea are £40, 405 while in Blackpool they are £16,384. Life expectancy differs by nearly a decade between the top (Kensington and Chelsea – 84.9 years) and the bottom (Glasgow—75.6). Unemployment in some parts of the UK is nearly 15% (Derry and Strabane). In others, it is under 2% (Stratford-upon-Avon).

The index uses both objective and survey data, and in this way provides a measure of outcomes and also of residents’ own sense of well-being – or disillusionment. West Somerset’s residents feel the most satisfied with life; Bolsover’s (Derbyshire) the least; in Nuneaton and Bedworth, people feel only half as anxious as in Pendle.

The big difference, though, lies in town and country. Or rather, in big cities and the rest. Again and again, urban areas, even rich ones, fail to deliver in terms of life chances. Anthony Horowitz can carp about village life all he wants, but the rural idyll is no myth: this is where the local authorities have been able to deliver more with less. Glasgow, Hull, but also Westminster and Haringey, have failed to transform local wealth creation into prosperity, condemning their residents to worse school results, health outcomes, and lower incomes.

Why do rural areas manage to stretch their smaller budgets to satisfy their residents’ needs better? Because local government knows what people want. Unlike Whitehall’s mandarins, local councillors are engaged in many of the relationships, connections and associations that thrive in the countryside. In the city, relations outside the immediate family are more likely to be limited to contractual ones: shop-keepers with customers, doctors with patients and bosses with staff. This is hotel society, to quote the former Chief Rabbi Lord Sacks: people pay to get a room but have little contact with fellow guests, and gain no sense of belonging. The countryside, and some of the smaller cathedral cities and towns, offer a home instead, where a nexus of relationships bind neighbours, local groups and associations and small enterprises. This is where, the UK Prosperity Index reveals, more people volunteer, say they can rely on friends and family, and trust others. They report feeling less anxious and more satisfied with life.

Crucially, people in rural areas trust that when they voice a concern, someone listens. They may not know the councillor personally but they know someone who does. Local government resides a few doors down, or only a few miles’ drive away. In this proximity, campaigning and protesting gain results. The index reports how in South Uist, in the Outer Hebrides, local residents pulled off the biggest land buyout in Scotland in 2006. The management company, still held to account by the community at the annual AGM and through the election of directors, has taken an entrepreneurial and localised approach that makes the most of the area’s assets. Their first investment was in Fanny, Wendy, and Blowy, three wind turbines that have provided a steady income with which to finance further investment, including  the expansion and renovation of the harbour at Lochboisdale, and the restoration of the Askernishgolf course (which dates back to 1891).

This community-led localism has inspired Cllr Russell Holland in Swindon, who took part of the money collected through council housing rent to pay the under-occupancy charge for a handful of families: “We did this because together with the community we knew that it would keep those families away from the food bank and off the street.”

Yet to do this, Swindon Council required the permission of central government. Despite modest devolution in Council Tax Support and local welfare payments, too much remains centralised. This is a real barrier to prosperity:  Whitehall has as little understanding of the needs of Swindon’s low income families, as of South Uist’s entrepreneurial ones; its policies are rarely tailor-made for local needs, and end up hanging, ill-fitting, on the wrong people.

Central Government, hampered by its immense girth, has trouble spotting the needs of even those close to home, and jumping to their assistance. Localism offers a better alternative: lithe, nimble, familiar with residents’ needs, it can spring into action to lend a hand when it’s needed.

The sooner true devolution starts, the sooner the people of Bolsover will feel as happy as those in west Somerset. No one wants to spend their life in a hotel: home is best.