Bringing purpose to place

Everybody’s talking about towns ...

Discussion on how to improve the performance of our towns was very prominent at last month’s political party conferences where we shared EY’s latest UK Attractiveness Survey report, produced jointly with the Centre For Towns, on the performance of UK towns and cities in attracting foreign direct investment (FDI). Reflecting on the discussions, and other sessions with private sector clients and local economic development agencies, I was struck by how little attention has been given to the role of business could, and should, play in driving geographic rebalancing.

All of the sessions featured lively debates with widespread agreement on the need for better broadband and transport infrastructure – including bus services – across the UK, significantly increased spending on developing skills for both young people and those in need of retraining, and the need to maximise the benefits our world-class university system offers.

We also heard more imaginative ideas developed with the aim of making places more attractive to people, so that they won’t leave their home towns and new people may be attracted in from overcrowded cities. The ideas included a greater focus on arts and culture, rebuilding of community institutions and making sure the online sector pays its full share of the costs it incurs in local areas.

... but business is in the background ...

Generally, the focus of policy is to improve the attractiveness of places via investment in infrastructure or facilities, in the hope of encouraging businesses to move to a location. There are examples of more direct approaches – such as tax incentives to help develop sectors in certain places – but these are less common. Businesses are often involved at a local level as members of Chambers of Commerce or Local Enterprise Partnerships, but this is more of a way to engage business overall, rather than to engage with individual businesses.

... which is part of the problem ...

The CFT have demonstrated in their research how the last three decades have seen political power and economic decision-making becoming ever more centralised. Even initiatives to devolve power – such as the Northern Powerhouse – are still by their nature centralised and top-down. But it is not just political power and economic decision-making that have become more centralised in the last thirty years, so has business. This was really brought home to me when I saw a social media post announcing that a free cashpoint had been established in Burslem, one of the six towns that make up the city of Stoke-on-Trent. Burslem was the centre of the pottery industry and the thought that it is now celebrating a cashpoint – not a bank branch mind – illustrates how hollowed out the banking industry has become.

Centralisation, as a means to reduce costs and capture economies of scale, has been a core feature of corporate strategies for 30 years. Add in offshoring and outsourcing, and it is easy to understand how local communities feel as cut off from business as they do from political life. As businesses have left smaller places, so have the management jobs that provided both higher income positions but also role models to support aspiration in local communities. These senior roles also created local leaders able to contribute across all facets of civic life.

With towns and smaller places relegated in the corporate hierarchy or even abandoned, there is a risk of less connection between corporate executives and their customers which may lead to poor decision-making. As an example, think of the role of the local bank or building society manager. Thirty years ago, lending decisions would have been made much closer to customers by managers with much greater knowledge and awareness of both the local market and the individuals and businesses within it.

... but could be part of the solution

Businesses today are increasingly aware of their wider responsibilities to all of their stakeholders. This sense of “purpose” offers a real opportunity for the efforts to improve the position of the UK’s towns and smaller places. Above all, businesses should incorporate “place” into their decision-making, explicitly considering the geographic impact of their actions. Decisions to close a branch office or to leave a high street should be subject to a “place” lens to think through the impact on local stakeholders.

It is unrealistic to expect that a new corporate focus on place will lead to a major shift in location decisions but there are other things that businesses can do to drive geographic rebalancing.

Supporting and promoting flexible – and especially remote working – could have real benefits for places outside of the major cities. While commuting can create benefits for the home towns of commuters, having more people in towns every day would be more beneficial. Enabling and encouraging remote working would have real benefits for local communities and high streets, rebuilding a working day population and giving workers more time to engage more with their local communities. High speed broadband everywhere is a key enabler of this proposal, but it also needs corporate sponsorship and commitment to invest in the processes and software to make it attractive to workers.

Businesses should also think about their workforces not just in terms of where they work but also where they live. When people are commuters, the aim should be to enable them to contribute to their local community and neighbouring ones. People nominally based in EY’s Manchester Office actually live far and wide and this potentially enables a much greater corporate reach. Businesses should encourage and even incentivise their employees to engage locally: acting as mentors/ raising awareness of work in schools and colleges; playing a full part in local economic and business bodies bringing insight from other places; mentoring small local businesses that might otherwise lack access to corporate knowledge; and expanding their corporate sponsorships of the arts and sports and other areas such as entrepreneurship to provide a local angle.