The trouble with economic recovery is that someone else always has to do it – the bankers, investors, industrialists or mandarins.  What about the rest of us – and what about the places we live?  Are there no economic levers they can pull to improve their lives?

Manchester is to get new powers, and the same powers have now been agreed for Sheffield – but what will the cities do with these powers when it comes to economic revival?  Or will they just let the Treasury decide economic policy on their behalf?

The trouble is that there is no communication, and little understanding, between the economic localisers and the mainstream national policy-makers, who are very sceptical about local economics – at least more local than LEPs.

People Powered Prosperity is the result of a project (thanks to the Friends Provident Foundation) to translate between the two worlds, interviewing a range of leading economists, including the Treasury, to see what was causing the logjam between central economic policy-makers and the energy of local economic activists.  The book is the result.

It sets out a new narrative for very local economics, based on local financial and enterprise institutions, which might be embraced by national politicians – and by the Treasury.  It is a potentially important intervention to kickstart a vital debate – about why mainstream policy-makers are so suspicious of revitalising local economies, the only basis for the real devolution of power.

The book also proposes two reforms:

• Small business now earns 51 per cent of value added in the UK economy.  They should therefore be getting a similar proportion of the business investment available in the UK.  If they are not doing so, then it is a sign of serious market failure and we need to provide the intermediaries and institutions which could make this possible.  In the interim, the Government needs to track these numbers regularly – comparing profitability and investment by size of business – and to report on them.
• The Treasury needs to develop a body of practical knowledge about ultra-local economic solutions and local economic resilience.  They need to set up an ultra-local policy and delivery unit, learning the lessons from the experience of local authorities in urban and rural areas which are succeeding in developing working solutions to their economic difficulties.

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Download People Powered Prosperity

Table of Contents:

Foreword by the Rt Hon Danny Alexander MP
1. Introduction
     The great divide
2. The regeneration paradox: people or places?
     Paradox 1: People don’t leave 
     Paradox 2: Local problems, national levers 
     Paradox 3: The trouble with names
3. Misunderstandings about regeneration
     Lessons from overseas
     Banco Palmas
     What might this mean in the UK?
     A misunderstanding about the word ‘local’
     A confusion about how places develop
     The fear of displacement and deadweight
4. Towards people powered prosperity
     The great measurement muddle
     The Green Book
     Other measures
     Reasons for action
     Big data
     The search for information
     Sunspots and co-ordination
     Information and externalities
     Information and finance
     The implications
     Tackling local market failure 
     Social and environmental externalities 
     Distorted competition 
     Labour mobility and immobility 
     The importance of economic resilience 
     Making the most of local economies
5. What should we do?
     Measurement tools 
     Local enterprise and ownership
     Developing micro-enterprises 
     Linking up high-growth companies locally 
     Seeking out the opportunities
     Small Enterprise Zones
     Localising ownership 
     Local finance and money 
     New local banking sector 
     The new mezzo level 
     New investment institutions
     New development bank 
     New property lending 
     Secondary money systems
     Two actions for Government