The rise of inclusive or ‘good’ growth

Opposition to austerity policies are often rooted in a reaction to the injustice of the impact it has on the low paid and the vulnerable. Since the Highly Valued, Hard to Value report was published in 2016, there have been a number of attempts to define an alternative economic strategy. Two of these; the RSA’s Inclusive Growth Commission, and the ‘good growth’ proposals set out in the Draft London Plan can be used to illustrate how this alternative might operate in practice.

The need for a new economic vision was summarised by the Inclusive Growth Commission (RSA, 2017) when it stated that “Reducing inequality and deprivation can itself drive growth. Investment in social infrastructure – including public health, early years support, skills and employment services – should go hand in hand with investment in physical infrastructure, and in business development. This will have a first order impact on productivity and living standards.”

The Mayor of London’s office has published a number of documents that describe the intention to establish ‘good growth’. In summary ‘good growth’ means:

  • Building a more inclusive city (which is defined as an inviting place to live, work and visit)
  • Supporting health and wellbeing for all Londoners
  • A balanced mix (including between the young and the old, between people from different cultures and backgrounds, of housing tenures and different types of workplaces)
  • Support and enrichment of the city’s public and civic spaces including the streets and routes that connect them
  • A contextual approach that allows for vitality and change whilst sustaining and strengthening the character of London’s existing neighbourhoods
  • Partnerships between the public and private sector
  • Resilient to a changing climate
  • Green and healthy, with clean air, easy access to green space and more efficient buildings supplied by cleaner energy
  • A place that enables everyone to fulfil their potential, by providing inclusive access to transport and other public services, by ensuring that communities see the benefits of growth, and by enabling broader public participation in how the city changes

The London vision (GLA, 2016) includes an emphasis on a long-term approach to investment that is designed to yield the wider benefits of change. These policies suggest a potential new emphasis on the way society could and should value economic growth differently.

While not explicitly defining the need to maximise societal value in the built environment, inclusive economic policy provides an important context to the argument that it is too expensive to invest in development that benefits the widest number of people who are affected by its establishment.

How property is currently valued

  • Societal value is challenging to measure and report because it accrues after the development is realised and mainly to occupying stakeholders. Pressures on capital costs mean that value accruing to end-users is rarely considered at the design stage.
  • Market-based valuation techniques such as cost benefit analysis do not accurately reflect the societal value accruing to people associated with development.
  • While not discounted in the guidance given to valuers in official documents, the calculation of societal value is given less emphasis and support compared to market-based methods. This may dissuade valuers from incorporating societal value in their reports.
  • Checklists, codes and frameworks designed to help designers to incorporate pro-social and environmental elements into their schemes are helpful. However, they do not replace societal valuation as they cannot quantify these features or allow an understanding of the relative merits of the impacts on stakeholders.

“There is potential for some greater flexibility in public sector procurement to give value to place-making. This might assist all parties to move beyond a purely financially-driven approach and allow developers more freedom to shape how desired outcomes can be achieved.”

Ciaran Gunne-Jones, Lichfields