Hidden in plain sight – the value of green spaces

jardin public

By Heather Cameron

They may be something most of us see every day but take for granted – the area of green space we pass on our way to work or frequent in our lunch break. And although we might make use of such spaces on a regular basis, is the true value of them really understood?

As highlighted by a recent report from the Land Trust, green spaces provide even more to society than we often think about.

Wider value

It has long been recognised that green spaces provide multiple benefits to communities and wider society, but there has been limited robust evidence on their wider economic value. The Land Trust report highlights that the services delivered by soil, grass, flowers, trees and water provide society and the economy with significant benefits.

It suggests that several important functions are provided by these green spaces, including:

  • Reducing and preventing flooding
  • Cleaning our water
  • Storing and removing carbon
  • Cleaning our air, reducing air pollution

Such functions help to alleviate costs to local and wider communities, such as to the health service, other public services and local businesses. Previous research has similarly alluded to such benefits.

Independent research by UK scientists in 2011 highlighted the true value of nature in relation to the economic, health and social benefits, estimating that it was worth billions of pounds to the UK economy.

Other research has also shown that green space has been linked to reduced levels of obesity in children and young people, and that access to open spaces is associated with higher levels of physical activity and reductions in a number of long-term conditions such as heart disease, cancer, and musculoskeletal conditions.

The proportion of green and open space is also linked to self-reported levels of health and mental health, through improved companionship, sense of identity and belonging and happiness. And living in areas with green spaces is associated with less income-related health inequality, thereby reducing the effect of deprivation on health.

What the Land Trust’s report does differently, is demonstrate these widely recognised benefits in physical and monetary terms to help create a greater understanding of the economic contribution of well-managed green spaces.

Natural capital accounting

A ‘natural capital accounting’ approach was taken to translate these benefits into financial terms, taking consideration of the physical land, its quality, how it is managed, used and the functions it performs.

Two different parks – Silverdale Country Park in the Midlands and Beam Parklands in London – were used in the study to demonstrate this value. Overall, Silverdale’s annual natural capital value was estimated to be £2.6 million, with a return on investment of £35 for every £1 invested, while Beam Parklands’ natural capital value, based on a 99 year period, has been valued at £42 million – an increase of £21 million since 2009.

Other benefits provided by Silverdale include:

  • Nearly £400,000 per year of flood risk reduction benefits
  • An annual value of £82,000 for the park and its maintenance to retain and purify water
  • A wider annual value of £840,000 of absorbed and stored carbon
  • A potential increase of 113% in local air pollution absorption since 2011

Other benefits provided by Beam Parklands (primarily a flood defence) include:

  • Nearly £600,000 per year of flood risk reduction benefits
  • Nearly £800,000 per year of educational and health benefits to the local community

As two well-maintained green spaces, they indicate the importance of long-term investment.

Final thoughts

Perhaps these financial values will help people to better comprehend the true value of our green spaces. As the report notes, it is important to remember that they are “not ‘one off’ monetary values or price tags” but rather an indication of what our green spaces are worth and their benefits to both society and the economy.

Put simply, as the Land Trust concludes, “green spaces… are valuable to society”.


If you enjoyed reading this, you may also like our previous articles on pocket parks and green spaces.

Follow us on Twitter to see what developments in public and social policy are interesting our research team. 

Government Transformation Strategy 2017 to 2020: has it been worth the wait?

Whitehall, London

By Steven McGinty

On 9 Feb 2017, and after over a year of delays, the UK Government finally published the Government Transformation Strategy 2017 to 2020.

It’s been a long time since the Government Digital Strategy was published in 2012. Therefore, it’s understandable that politicians, industry leaders and media commentators have been frustrated by the lack of a new strategy in 2016.

In January 2017, Iain Wright MP, chairman of the Business, Energy and Industrial Strategy Committee (BEIS) warned that the UK risked being left behind and losing its competitive advantage in the digital economy because of its ‘absence of clarity and strategic focus’.

Similarly, Stephen Metcalfe, chairman of the Science and Technology Committee, wrote a letter to digital minister Matt Hancock highlighting his disappointment at the lack of a government digital strategy.

However, now that the Government Transformation Strategy is here, what does it say and will it have a lasting impact?

A brief overview

According to Ben Gummer, Minister for the Cabinet Office and Paymaster General, the Government Transformation Strategy is:

“The most ambitious programme of change of any government anywhere in the world, by a government that has already done more to transform itself than any other.”

It sets out the government’s aim to build on the success of the 2012 strategy, and to not only focus on improving the citizen experience but to change the way services are delivered. The strategy states that the government will achieve this by transforming:

  • Whole citizen-facing services – ensuring an improved experience for citizens, businesses and users within the public sector
  • Full government departments – enabling organisations to deliver policy objectives more flexibly, improving citizen experience, and working more efficiently
  • Internal government – supporting the collaboration of government departments and delivering digitally-enabled change more effectively

However, the majority of the strategy is structured around five main objectives:

Business transformation

Government departments have made significant progress over recent years.  The strategy explains that lessons have been learned through this service transformation process, and that there is now cross-government agreement on the key areas that transformation must focus on. These include bringing policy development and service design closer together and recognising that government services are delivered through a variety of channels (online, telephone and face-to-face).

Grow the right people, skills and culture

Since 2012, government departments have been recruiting digital, data and technology specialists to improve their digital capability. However, the strategy accepts that the public sector is working in a competitive market and that recruiting and retaining staff is likely to remain a challenge. Embedding a new culture is also identified as an important enabler of change, with several goals highlighted, including increasing civil servants’ knowledge of digital and improving digital experts’ understanding of government.

The Digital Academy, which was formed in 2014 by the Department for Work and Pensions (DWP), will be transferred (by the end of 2017) to the Government Digital Service (GDS) to create nationwide training opportunities for civil servants.

Build better tools, processes and governance for civil servants

Civil servants vary widely in how they work, including the digital technologies they use and their approach to policy development. The new strategy explains that the government will create a better working environment by developing common and interoperable technologies that can be shared across government and adopt a more agile working environment.

Make better use of data

Data is vital for providing services that meet the needs of citizens. However, the strategy emphasises that the government must earn the public’s trust in managing data safely, securely, and ethically.

Create shared platforms, components and reusable business capabilities

The government has already had some success in introducing shared platforms, such as GOV.UK – a publishing platform which brought together over 300 government agencies’ and arm’s length bodies’ websites within 15 months. The strategy outlines the steps to be taken to encourage the development of new technologies, including leaving large single contracts with IT firms – a practice which is deemed a barrier to providing better technologies for civil servants – and purchasing from a wider variety of suppliers, such as SMEs.

From digital to transformation

It’s important to note that the strategy’s title has changed: from a digital strategy to a transformation strategy.

Jane Roberts, strategy director at Kable, suggests that this reflects the government’s realisation that digitisation is not a process with a defined end date, but a ‘constant dynamic ongoing process.’ Government, says Roberts, now understands that digitisation involves more than just moving services online, and that whole scale change is needed, from encouraging civil servants to work more collaboratively (including sharing cross-governmental data), to digitising back office processes.

In addition, Roberts also highlights the need for digital services to be designed to cope with this dynamic process. This includes supporting the integration of new technologies – particularly those related to the Internet of Things (the use of internet technology to connect everyday items) – and responding to increased citizen demand for greater control over their personal data.

What does it mean for local government?

The Government Transformation Strategy makes no comment on the challenges facing local government. However, London Borough of Camden councillor, Theo Blackwell, suggests that the strategy leaves scope for a ‘digital settlement’ to be developed between central and local government. He observes that the strategy:

leaves the door open for this discussion to be starting and concluded in short order, kickstarted by elected mayors and combined authorities in May 2017, and building on the groundwork of the last two years”.

Mr Blackwell also sets out what needs to be done to achieve this digital settlement:

  • Support the ‘coalition of the willing’, as well as improvement – encouraging local councils who have already made progress with digital transformation to work together, as well as helping struggling councils to improve;
  • Open platforms and a new market for start-ups – enabling the development of platforms and smaller start-up companies;
  • Shared Resource – developing partnerships between local councils and central government, which fund digital initiatives jointly.

Missed opportunity

The strategy has also received a significant amount of criticism for its lack of detail and limited commitments. Independent digital analyst, Jos Creese, has described the strategy as:

“…a mix of re-packaged principles and refreshed ‘transformational government’ themes, coupled with some new but not revolutionary ideas.

Creese argues that there is a general lack of pace with government programmes, such as with GOV.UK Verify – an identity assurance platform that allows people to prove who they are when using government services. And – unlike Theo Blackwell – Creese believes that the lack of collaboration between central government and the wider public sector is a missed opportunity (particularly as 80% of public services are outside central government). In his view, the strategy should have addressed some of the fundamental challenges facing local services, such as healthcare and crime prevention.

Final thoughts

Although the Government Transformation Strategy has received a mixed response since it was first published, there are certainly positives which provide hope for the future. Firstly, it was important that the strategy was finally published to provide a clearer indication of the government’s future direction.  Secondly, in the coming months, the government will have the opportunity to provide greater clarity, and set out how they intend to achieve the praiseworthy objectives of the strategy and realise the full potential of digital transformation.


Follow us on Twitter to see what developments in public and social policy are interesting our research team. If you found this article interesting, you may also like to read our other digital articles

Planning for an ageing population: designing age-friendly environments

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In the UK, increased life expectancy means that people can expect to live longer than ever before.  While this is clearly good news – and has a number of potential economic benefits – the shift in demographic structure towards an increasingly elderly population has a number of significant implications.

Following Wednesday’s blog post on the implications for planning of the ageing society, today we highlight some of the ways in which planners can help support the creation of age-friendly environments by influencing the design of the urban environment, transport, housing and the wider community and neighbourhood.

The importance of an age-friendly environment

Age-friendly environments are underpinned by three key factors:

  • Safety
  • Accessibility
  • Mobility

Such environments impact positively upon the quality of life of older people by enabling and encouraging physical activity and social connection.  This in turn has a beneficial impact upon their physical and mental health, and helps to tackle social exclusion – which can be a particular problem among older people.

Conversely, as the World Health Organisation (WHO) notes, poor design can have a negative impact:

“older people who live in an unsafe environment or areas with multiple physical barriers are less likely to get out and therefore more prone to isolation, depression, reduced fitness and increased mobility problems”

Creating an age-friendly environment

There are a number of areas in which planners may have an influence on the provision of age friendly environments:

  • the design of the urban environment
  • supporting appropriate transport options
  • the provision of age-appropriate housing
  • adequate neighbourhood and community facilities

Urban environment

In terms of the urban environment, green spaces are an integral aspect of age friendly environments.  Access to green spaces supports the physical activity of older people, makes a positive contribution to their health and wellbeing, and provides opportunities for social interaction.

Research has found that green spaces that are poorly maintained, perceived as unsafe, or contain potential hazards resulting from the shared use of parks and walkways are less likely to be used by older people.  Suggestions for improvement include the creation of small, quieter, contained green spaces and improved park maintenance.

Paths, streets and pedestrian areas are also a key planning consideration. Older people have greater reliance on pedestrian travel and are more likely to be physically active in areas that are pedestrian friendly.  The perception of safety also influences use – therefore, lighting and road safety measures can help to enhance this.

Adequate public toilet provision will also become an increasingly important issue.  Recent cutbacks have resulted in many public toilets being closed – in their review of public toilet provision in the UK Help the Aged noted that provision was sporadic. They found that the majority of older people had experienced difficulties in finding a public toilet, and even when toilets were found, they were often closed.

Transport needs

Responding to the transport needs of different groups will also present a key challenge. For example, an analysis of major European cities  by the Arup engineering consultancy found that older people typically make fewer journeys, use private cars less, public transport more (trams and buses in particular) and walk more.  In addition to this, older people’s typical walking speed – as well as the average length of walking trips – were lower than younger people’s patterns.  These differences must be considered when designing age-friendly environments.

The growing population of older people in rural and semi-rural areas, and the reliance on cars in areas with limited public transport options were also identified by Arup as important issues.

Age-appropriate housing

There will be increased demand for age-appropriate housing that meets the needs of older people as the population ages. People are likely to have longer periods of retirement and possibly longer periods of ill-health. As noted by the Future of an Ageing Population Project, unsuitable housing can damage individual wellbeing and increase costs for the NHS.

In order to meet demand, it will be necessary to both adapt existing housing stock, as well as ensure that new housing can adapt to people’s changing needs as they age.  Age-appropriate housing that supports independent living can reduce demand on health and care services, and positively enhance the lives of older people.

Thinking ‘beyond the building’

There is also a need to think ‘beyond the building’. It is thought that interventions that improve homes are likely to be less effective without similar improvements in the neighbourhood.  The ability to socialise and to access services is considered to be particularly important.

Therefore, planning for the provision of local shops and other community facilities such as GP surgeries, post offices and libraries, in tandem with an increased focus on walkable neighbourhoods and public transport provision, will help older people to be physically active and more independent.

Raising awareness

Despite a pressing need for action, the provision of age friendly infrastructure in the UK has been constrained by a lack of resources, and assigned a relatively low priority.  However, there is growing recognition of the need to raise awareness of the potential effects of the ageing population and its implications for the design of cities, towns and villages across the UK.

Planning departments cannot address these implications in isolation.  However, for their part, knowing and understanding the potential implications of the UK’s ageing population is a positive step towards the creation of a successful age-friendly built environment.


For further information, you may be interested in our other blog posts on the creation of age-friendly towns and cities and the economic opportunities presented by an ageing society.

We have also published two members-only briefings on Ageing, transport and mobility and Meeting the housing needs of older people.

Planning for an ageing population: some key considerations

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On average, the UK’s population is becoming older and living longer, healthier lives.  This is due to historically low fertility rates and reduced mortality rates.  Between 2014 and 2039, the government predicts that over 70% of UK population growth will be in the over 60 age group. Although this trend is partially countered by migration, by 2037 there will be 1.42 million more households headed by someone aged 85 or over.

The implications of population ageing for society are so complex and far reaching that they are impossible to fully predict. However, a key priority is the provision of age-friendly environments.  This is where local government, and planning departments in particular, have a crucial role to play.

In this blog post – the first of two on the implications of population ageing for planning – we highlight some key areas for consideration.

Some areas will be more affected than others

While headline-grabbing statistics paint a very clear picture of the significant growth in the number of older people that is predicted, often they obscure the subtleties of the way in which population ageing will occur across the UK.

In reality, it is likely that population ageing will not occur equally in all areas of the UK.  The degree to which some local authorities – and therefore planning departments – will be affected varies considerably.

The impact of population ageing is measured by a ‘dependency ratio’ – the number of people aged over 65 for every person between 16 and 64.

Recent research has found that coastal localities are likely to have higher dependency ratios than urban areas.  Urban areas will, however, experience a larger overall number of older people.

Dependency ratios will vary considerably between local authorities.  On average, it is predicted that by 2036, there will be over four people aged over 65 for every 10 people aged between 16-64.  However, local figures are likely to vary – from just over 1 in 10 in Tower Hamlets, up to 8 in 10 in West Somerset.

You can see how your own area is likely to change in an interactive map created as part of the Future of an Ageing Population Project.

Differences between the ‘young old’ and ‘older old’

And while there is awareness of the growth in the overall numbers of ‘older people’, another complexity is that ‘older people’ are not a homogenous group. 

As life expectancy increases, the differences between different age groups become more significant.  For example, there are variations in the needs, tastes and lifestyles between the ‘older old’, i.e. those aged over 80, and the ‘young old’ who are just approaching retirement age.

Some planning departments are already taking this into consideration.  Northumberland County Council – who have a higher than average number of older people within their population – use a three phase definition as part of their strategy to prepare for the ageing population. They categorise ‘older people’ into three distinct groups: older workers; ‘third agers’; and older people in need of care.

Understanding social impact and interpretation

The physical environment is commonly understood to be a ‘societal context’ in which ageing occurs.  This is reflected in the term ‘physical-social environment’ – it suggests that there is no physical environment without social interpretation.

However, recent research has found that while planners were reasonably aware of the physical needs of older people, they were less aware of the social and economic contexts of older people’s lives.  This included the links between wellbeing and attractive environments, green space, activity and health, and the positive impact of place attractiveness on social interaction.

Related to this, older people’s social interpretation of the built environment – including the importance of place meanings, memories and attachments ­– is likely to become an increasingly important consideration for planners.  As too is the potential effect of redevelopment on older people – which may include feelings of insecurity and alienation, disorientation, loss of independence, and social exclusion.

Involving older people in the planning system

How to effectively involve older people in the planning system in an increasingly technology-dependent age will pose a number of challenges.

Planners will need to think creatively about options for engagement.  Increasingly, social media platforms and other online media have been used to engage with users.  However, these technologies may not be readily accessible or easily used by older people due to a lack of technological skills or access to the internet.

Older people may also need certain adaptations to support them to become involved – either online or in person – if they have physical or other disabilities.

Negative assumptions about technology’s usefulness held by some older people may need to be challenged or worked around.

Supporting healthy and happy lives

There is no way to fully predict the impact that population ageing will have across all sections of society.  Developing our understanding of the way in which the built environment can help to support and enable older people to live happy and healthy lives – and the implications of this for planning towns and cities across the UK – is increasingly important.

In our next blog post we will look at some of the ways in which planners can help support the creation of age-friendly environments through their influence on the design of the urban environment, transport, housing and the wider community and neighbourhood.


For further information, you may be interested in our other blog posts on the creation of age-friendly towns and cities and the economic opportunities presented by an ageing society.

Who’s afraid of the big, bad robot? Preparing the labour market for a future with AI

massive production

By Heather Cameron

Science fiction is slowly becoming science fact”. This is what the interim Chair of the government’s Science and Technology Committee said in their recently published report on robotics and artificial intelligence (AI).

While admitting there is still some way to go before we witness systems and robots like those portrayed in the creative arts such as Star Wars and Ex Machina, the report noted that there have been a series of recent advances across these fields that are beginning to have transformational impacts.

But just what will these impacts look like, particularly in relation to the labour market?

‘Transformational impacts’

Driverless cars and supercomputers that assist with medical diagnoses are highlighted as some of the transformational impacts of AI that have already arrived.  Others include improved automated voice recognition software and predictive text.

The increase in processing power, the wealth of data and the development of techniques such as ‘deep learning’ have all contributed to the recent progress.

However, the report also notes that such advances raise a number of social, ethical and legal questions that require consideration. These include issues about the transparency of AI decision-making as well as privacy and safety.

And while there is much excitement about the potential of AI to improve and enhance our lives, there is also widespread concern over the potential impact of increasing automation on the workplace.

Implications for employment

Fears over increased unemployment as a result of increasing automation are longstanding. The inquiry found conflicting views over the potential impact to the workforce, with some predicting a rise in unemployment, while others anticipate a transformation in the type of employment available.

It is likely that some occupations will become obsolete. Deloitte has warned that 11 million jobs across the UK economy are at high risk of being automated by 2036, with the retail and transport sectors most vulnerable. The research also indicated that almost 750,000 net jobs had been lost in manufacturing since the turn of the millennium, while the wholesale and retail sector saw net job losses of 338,000.

However, it was noted that millions of new roles had also been created in order to meet changing demand. So perhaps it is adaptation within the workforce that is needed.

Indeed, the Committee’s report highlights a need to focus on delivering the skills needed for people to adapt and thrive as new technology continues to emerge. It has been argued elsewhere that cognitive and social and behavioural skills should be made a priority in any skills strategy for the 21st century to “make workers more resilient to technology-driven labor market shocks like automation.”

And of course some sectors may be more susceptible than others.

Recent research by McKinsey suggests that the impact of automation differs dramatically across sectors and activities. It found that:

While automation will eliminate very few occupations entirely in the next decade, it will affect portions of almost all jobs to a greater or lesser degree, depending on the type of work they entail. Automation, now going beyond routine manufacturing activities, has the potential, as least with regard to its technical feasibility, to transform sectors such as healthcare and finance, which involve a substantial share of knowledge work.”

Another common theme highlighted throughout the inquiry was that robotics and AI could increase productivity and efficiency. One recent study estimated that ‘£1.24bn in automation investment could raise the overall value added by the manufacturing sector to the UK economy by £60.5bn over the next decade’.

Future

There are clearly many debates about the potential impact of robots and AI, but it is not yet clear what the actual impact of advances in these fields will be on the labour market.

What is clear is that there is a need for skills to be developed for a world where AI is more prevalent.

But as the inquiry highlighted, the government doesn’t yet have a strategy for developing these new skills or responding to the social and ethical issues it poses. The report therefore recommends that “the government must commit to addressing the digital skills crisis through a Digital Strategy, published without delay.”

Perhaps the future will be similar to the past, as written evidence to the inquiry suggests:

During the industrial revolution, mechanisation did not change long-run equilibrium employment because new jobs emerged which were unimaginable at that time. Similarly, jobs lost to automation today might be replaced by jobs we cannot yet imagine.


Follow us on Twitter to see what developments in public and social policy are interesting our research team.

Grandparents – the ‘hidden army’ of kinship carers

mamy and the little boy

By Heather Cameron

Tomorrow is the International Day of Older Persons, designated by the United Nations in order to recognise the important contributions made by older people, while raising awareness of the issues of ageing.

Today there are around 600 million people aged 60 years and over world-wide. A number that is set to double by 2025 and reach 2 billion by 2050.

With people living longer and healthier lives, it is not surprising older people are playing a considerably more active and increasingly important role in society. Not least when it comes to contributing to the care of their grandchildren.

Extent of kinship care

Kinship care – when children are brought up by relatives or family friends in the absence of their parents – has grown markedly in recent years.

It is estimated that between 200,000 and 300,000 grandparents and other relatives are raising children who are unable to live with their parents. Common reasons cited for this include abuse and neglect, parental illness or disability, parental substance misuse, domestic violence or death of a parent.

In examining the prevalence of kinship care, drawing on census data, a recent University of Bristol study found that there has been a 7% increase in the kinship child population in England since 2001 – more than three times that of the population growth rate of all children in England, which was 2% over the same time period.

The study also found that one in two (51%) children were growing up in households headed by grandparents.

Positive outcomes

With regard to the children in kinship care, research suggests that they do ‘significantly better than children in care’, both emotionally and academically.

Indeed, a recent study on the educational outcomes of looked after children found that children in long-term foster or kinship care made better progress than children in other care settings.

The largest kinship carer survey in the UK, conducted by Family Rights Group, also highlights the effectiveness of kinship care in preventing children entering or remaining within the care system, to the benefit of both the child and the public purse. The data found that 56% of children had come to live with the kinship carer straight from the parents’ home, with 27% having been in unrelated foster care.

The caring contribution of grandparents has also been shown to have made a material difference to maternal rates of employment.

And as 95% of children being raised in kinship care are not officially ‘looked after’, billions of pounds are saved each year on care costs.

But while benefiting the public purse, and despite evidence that kinship children have better outcomes, many kinship families face a financial burden. The University of Bristol study found that 40% of all children in kinship care in England were living in households located in the 20% of the poorest areas in England (an improvement of only 4% since 2001), and three quarters (76%) of kinship children were living in a deprived household.

Impact on grandparents

As there is no statutory requirement for local authorities to make provision for kinship carers and no automatic right to child benefit, many receive no formal support; leading to financial hardship, and the stress that comes with it.

Many kinship carers have had to give up work or reduce their working hours, either permanently or temporarily. And this is often their main source of income.

A study from Grandparents Plus on discrimination against kinship carers found that of the 77% of grandparents that have asked for professional help, only 33% received the help they needed. And 30% said they didn’t receive any support at all.

The study also found that, overall, kinship carers score ‘significantly below average’ when it comes to their wellbeing.

Other recent research has suggested that regular and occasional care for grandchildren can impact on the mental health of grandparents. The findings indicated that ten additional hours of childcare per month increases the probability of developing depressive symptoms by 3.0 and 3.2 percentage point for grandmothers and 5.4 to 5.9 percentage points for grandfathers.

Policies that substitute informal with formal childcare, it argued, could improve the mental wellbeing of grandparents.

Of course there are positive impacts on grandparents too, many of whom find caring for grandchildren rewarding and who enjoy closer relationships with them, which can in turn have a positive effect on their health. As the research suggests:

the effect of grandchild care provision on grandparents’ health seems to depend on its intensity, the cultural context, as well as on its stability and change.”

Final thoughts

It is clear that grandparents play an increasingly vital role in family life. But it seems this role is in need of greater recognition and support, if society is to continue to benefit from this ‘hidden army’ of kinship carers.


If you enjoyed reading this, you may also be interested in our previous blog on the economic opportunities of an ageing society, published on last year’s International Day of Older Persons.

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The economy and Brexit – what’s next?

money-economics-growth

By Heather Cameron

‘Uncertainty and volatility’ – these were two key terms highlighted at a recent event focusing on the impact of Brexit on the economy, hosted by STEP Stirling.

Following the historic decision of the UK to leave the European Union and all the press that has ensued, it was interesting to hear from experts in the field on what they believe the true impact will be.

Speaker: David Bell, Professor of Economics, University of Stirling

Professor David Bell from Stirling University delivered the first presentation, providing an overview of the key economic implications of Brexit.

David suggested that the negative impacts from a leave vote have not materialised as predicted, noting that “the economics of Brexit has moved at a slower pace than the politics.” Many predicted that there would be an immediate impact on the economy and on consumer confidence, but this hasn’t happened. Retail sales have shown no signs of collapse, with recent research actually showing growth.

Nevertheless, David noted that things were different for businesses, which are experiencing a lot of uncertainty. He indicated that this business uncertainty has dragged UK business output and optimism to a three year low.

What is clear, is that there has been a significant depreciation in Sterling which is unlikely to be reversed in the short to medium term. David considered the implications of this, including that we are poorer, more time will be spent working to benefit smaller businesses, there is lower borrowing costs and it is bad news for pensions.

David also highlighted the issues around the UK’s deficit in goods and surplus in services and trade agreements, which are particularly complicated. To conclude, David acknowledged that negotiations will be difficult and that we will be in the same position for some time to come – with a lot of uncertainty.

Speaker: Craig Wilson, Senior Director Treasury Solutions North England & Scotland at Clydesdale Bank

Following David, was Craig Wilson from the Clydesdale Bank. He considered the impact of Brexit from a financial markets perspective.

To begin, Craig highlighted that what was surprising about the Brexit vote was that ‘the bookies were wrong’, with odds as much as 2/9 suggesting an 82% probability of a remain victory. He noted that the immediate reaction, as similarly highlighted by David, was a drop in Sterling. He said:

“We had a reaction to a recession without the recession taking place.”

Craig also highlighted what has happened since the vote in terms of GBP/Euro stats, interest rate cuts and the price of Brent oil. Interestingly, Brexit hasn’t been shown to have affected commodities as oil prices only dropped slightly and have now increased again.

In agreement with David, Craig argued that there will be a negative impact on the economy in the short to medium term. Economists have cut UK GDP growth going forward to just 1%. Craig suggested that house prices will be important because if they hold up, consumer confidence is likely to remain.

The future, however, was also emphasised as uncertain by Craig. He highlighted that there are lots of variables, both within the UK and abroad, including:

  • UK data
  • Public perception and consumer sentiment
  • Recession?
  • Bank of England monetary policy – will there be more cuts?
  • Negotiations – timing of these, will they be positive or negative?
  • House of Commons/Lords may ignore the vote
  • The US presidential elections
  • US interest rate increases?
  • The Italian debt crisis
  • Emerging markets

In conclusion, Craig suggested the one thing to take away is that so many factors will make the markets volatile.


If you enjoyed reading this, you may also be interested in our other recent blogs on the impact of Brexit:

Follow us on Twitter to see what developments in public and social policy are interesting our research team.

The 24-hour city – the Night Tube launches London into an elite group

london tubeBy Heather Cameron

With the long-awaited launch of the night tube service at the weekend, London has joined a growing number of cities across the globe that offer all-night subway services to varying degrees – including New York, Copenhagen, Berlin, Barcelona and Sydney.

More than 100,000 travellers used the service in its first 48 hours, which was hailed as a “great success” by Transport for London (TfL), and many were impressed with the service.

The new service is being phased in, with trains running all night on Fridays and Saturdays, initially on two out of the 11 lines, roughly every 10 minutes.

Demand

According to TfL, demand for such a night-time service has soared in recent years, with passenger numbers having increased by around 70% on Friday and Saturday nights since 2000. And use of the night bus has increased by 173% since 2000, outstripping demand for all other forms of transport across London.

There has been growth in night-time activities across the UK, which have expanded beyond just pubs, clubs and alcohol-related activities. There has been an increase in the number of flexible venues, casinos, all-night cinemas and gyms. The total value of the night-time economy in the UK has been estimated at £66 billion, employing 1.3 million people.

The night tube is also reportedly driving up house prices, as demand for property near the lines running the service is high.

Who benefits?

Independent research into the economic benefits of the night tube conducted in 2014 estimated that it will cut night-time journeys by 20 minutes on average, with some being reduced by almost an hour. It also found that the night tube could support around 2000 permanent jobs and boost the city’s night-time economy by £360 million – although it is expected to take three years to break even. The benefit-to-cost ratio is estimated at 2.7:1 – meaning it will generate £2.70 for every pound spent.

Other unquantifiable benefits were also identified, including improved commuter journeys for night-time workers, potential for longer operating hours for a variety of businesses and reduced congestion.

Late night revellers will no longer have to rush for the last train, cutting short their nights out. The service could also benefit shift workers and those working in the hospitality industry. Figures from TfL show that more than 50% of people using night buses are going to or returning from work.

But while the potential positive impacts have been emphasised, there have also been concerns raised over potential negative impacts.

Concerns

Residents living near the Central line fear their quality of life, as well as the value of their homes, will be affected by the noise generated by trains running every 20 minutes during Friday and Saturday night. And TfL’s own risk assessment has reportedly highlighted similar concerns.

Alcohol-related anti-social behaviour has also long been recognised as a challenge for the night-time economy. A recent report from the London Assembly notes that alcohol features in a higher proportion of crimes in London that occur at night than during the day. Many of these are concentrated in areas with a strong night-time economy.

So it is no surprise that the Mayor has invested £3.4 million in police funding for the night tube. If the launch weekend is anything to go by, however, it would appear that any dramatic increase in crime as a result of the night tube has not materialised.

Final thoughts

It is of course too early to tell whether the night tube will bring the economic and social benefits to the city as predicted. What is clear is that the night tube supports London in its drive to becoming a truly 24-hour city. And it should be encouraging that other 24-hour subways have been successful, such as those serving New York and Berlin.

The success or failure of London’s night tube could also pave the way for other cities thinking of making the move.


If you enjoyed reading this, you may also be interested in our previous blog on night-time transport infrastructure in global cities.

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Are councils embracing an agile future … or is it cost-saving without the transformation?

By Heather Cameron

An increasingly diverse working population means that more people require and expect enhanced flexibility to help them balance their lives at work and at home, manage a range of different caring responsibilities and transition into retirement, for example, by reducing hours or through adaptations to how they work.” (CIPD, 2014)

The needs of the workforce is changing. No longer is nine to five office working the norm as more and more employees expect flexible working environments.

According to the CIPD, these changing needs, combined with the fast pace of economic change, require organisations to adopt more agile working practices. And this applies to both the public and private sectors.

What is agile working?

The concept of agile working refers to a way of working that incorporates time and place flexibility. It enables employees to work where, how and when they choose, subject to business needs, in order to improve work/life balance and maximise productivity. It is a move away from the reliance on the office location towards a culture that incorporates remote working and more dynamic office spaces.

The Agile Future Forum defines agile working practices along four dimensions:

  • Time: when do they work? (e.g. part-time working; staged retirement)
  • Location: where do they work? (e.g. people working across multiple sites)
  • Role: what do they do? (e.g. multi-skilling)
  • Source: who is employed? (e.g. using contractors or temps)

In addition to offering practical solutions to help improve the work-life balance of the workforce, agile working can also provide the opportunity to reduce and control operational costs. One of the biggest costs for any organisation, whether in the private or public sector, is the fixed costs associated with buildings and furniture.

As local government finances continue to be squeezed, councils face an ongoing dilemma of having to try and reduce costs while maintaining service delivery. So perhaps agile working is a way of achieving this.

Cost savings?

 As a recent briefing paper on agile working in the public sector has highlighted, it is no surprise that the public sector estate should be earmarked for cost savings and reform, given its vast scale. The local government estate consists of over 180,000 buildings, with a value of £250 billion and annual running costs of £25 billion.

Council offices are also often housed in old inefficient buildings that are often located in prime real estate sites that could be sold for redevelopment. “They have become valuable assets that are ill-suited to their current purpose.”

And many of these buildings are underutilised. According to the briefing paper, the majority of local government buildings have a desk occupancy rate of 45% and a meeting room occupancy rate of 60% – meaning that there can be as many as 297,000 empty desks on any given day and numerous underutilised meeting and conference rooms.

It is therefore no wonder we have seen a move by councils to introduce agile working in recent years.

Agile working in local government

Earlier this year, it was reported that Angus Council plans to invest £2.2 million in two buildings to promote agile working among its staff. This forms part of the council’s plans to close 32 offices in a bid to save almost £5 million a year from its budget.

Head of technical and property services at Angus said:

“The investment in works and furniture will provide modern office environments to support staff adopting new ways of working aligned with the agile culture, while reducing the council’s existing estate portfolio.”

In 2013 Monmouthshire Council opened a new £6 million headquarters with only 88 desks for 200 staff. The new office was created to help facilitate the council’s agile working policy and reduce costs.

Lambeth Council is moving from 14 operating sites to just 2, with a 10:6 desk ratio. The council’s flexible working strategy aims to help reduce its real estate costs by £4.5 million per year.

It has been argued that the main catalyst for change across councils has been the creation of the government’s One Public Estate initiative, launched in 2013.

Under the initiative, councils in England have freed up land for around 9,000 homes and created 20,000 jobs. It is expected that the councils involved will raise £129 million in capital receipts from land sales and cut running costs by £77 million over 5 years.

Final thoughts

The potential cost savings from agile working would seem undeniable. But does the adoption of agile working in local government represent true transformation?

Of course, it is more difficult to embed a shift in culture change within an organisation than it is to merely convince people that agile working is beneficial. Nevertheless, the success stories from Timewise Councils suggest that transformation is happening.


If you enjoyed reading this post, you might like our previous post on flexible working.

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Rising household debt: a real risk to the economy?

pink pig and coins

While household debt is still below its pre-crisis levels, it began to rise relative to incomes in early 2015 and remains high by historical and international standards, according to the Bank of England.

With the current uncertainty surrounding the economy following the EU referendum, there are concerns that household indebtedness could present a big risk to the UK economy.

So what do the statistics mean and just what impact could they have on the economy? A recent House of Commons briefing paper highlights the latest statistics and forecasts for household debt in the UK, including international comparisons, and the effects on the economy.

The statistics

The level of household debt more than doubled from £725 billion in early 2000 to £1,600 billion in late 2008. The global financial crisis resulted in a decline in the household debt-to-income ratio, however, from 168% at its peak in early 2008 to just over 140% in recent years. The levels of debt have increased again over the last couple of years, with annual rates of growth of around 3% recorded since 2014.

The Office for Budget Responsibility (OBR) forecasts that the household debt-to-income ratio will increase in coming years, peaking at 167% at the start of 2020, close to the pre-recession peak. However, this has been revised down on earlier forecasts, such as December 2014, when it was forecast to reach just under 184%.

Despite these increases, the costs of household debt is expected to remain low relative to household income, and much lower than pre-recession levels, due to continued low interest rates. As a result, the debt burden is more affordable for households.

Benefits

The negative effects of debt on individuals has been highly publicised, but low levels of household debt can also provide benefits to individuals and the economy, as highlighted in the briefing paper:

“It allows people to buy things, like a house, that they would not be able to pay for in one go, raising their standard of living. In other words, it allows people to smooth their consumption over time, including during periods when their incomes temporarily fall. This can provide stability to the economy.”

Consumer spending can obviously be good news for retailers and the high street and high levels of mortgage approvals is good for the housing market.

The paper highlights evidence that the accumulation of household debt from 1996 to 2003 contributed to economic growth, with indebted households adding roughly 0.35% points a year to overall consumer spending growth of about 4.5% per year over this period. So a total of 2.5% was added to the level of consumer spending from 1996 to 2003.

Nevertheless, higher levels of debt can make households more vulnerable if an economic downturn occurs. And as the briefing paper shows, the households most likely to have debt (excluding mortgages) are those in the lower wealth quintiles – who are already vulnerable.

Economic impact

As the Bank of England has warned, the ability of some households to service their debts would be challenged by a period of weaker employment and income growth, which could have a wider economic impact through reduced expenditure. And higher interest rates may also lead to further reductions.

This could then have a knock-on effect on businesses which, faced with reduced revenues, may have to cut back on costs such as labour costs by reducing wages or the workforce.

Indeed, research on the impact of household debt on the economy highlighted in the briefing paper suggests that large increases in household debt prior to recessions tend to lead to longer and more severe downturns. And this is as a result of households with high debt levels cutting back on their spending by more than other households during and after a recession.

According to a 2012 OECD working paper, high debt levels can create vulnerabilities by impairing the ability of households and companies to smooth their spending and investment.  The paper also found that when household debt levels rise above trend, so does the likelihood of recession.

Other research has also found that large increases in household debt have preceded more severe and protracted recessions. And recovery following a recession was found to be typically slower in countries that carry the legacy of a large private credit boom.

Final thoughts

So it would seem that perhaps a certain extent of household indebtedness is good for individuals and the economy, in terms of maintaining growth. But when it rises above a certain level in relation to incomes, the evidence suggests it becomes a serious concern.

And with the current economic uncertainty, increasing household debt isn’t something to be ignored.


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