The good life: communities

Measuring inclusive growth across communities

15 September 2019

By Zoë Billingham, John Dudding, Ben Franklin, Andy Norman and Rosie Stock Jones

This report is the second output of the partnership between the Centre for Progressive Policy (CPP) and the All-Party Parliamentary Group (APPG) on Inclusive Growth, and introduces the new CPP Inclusive Growth Community Index.

When it comes to assessing economic progress, the case for going ‘beyond GDP’ is growing. We need new measures that are better able to capture the effects our economy on people’s lives. There have recently been a range of proposals at the international and national level that offer a broader understanding of prosperity. Included amongst these is CPP’s Inclusive Growth Country Index, launched earlier this year in parliament, which assesses the progress of 155 countries towards inclusive growth.

In the UK, local leaders are also redefining what constitutes economic progress. The next step is to help them measure it. That is why we are launching the CPP Inclusive Growth Community Index. The index combines data on five key outcomes – consumption, healthy life expectancy, leisure, inequality and unemployment – to create an inclusive growth score (IG score) applicable to local and combined authorities up and down the UK.

The index is designed to bring greater clarity, focus and direction to the inclusive growth agenda. Yet the process of achieving these outcomes should be locally led, drawing on local resources and responding to local challenges. To deepen the understanding of this process, the report presents an analysis of the links between local characteristics and IG score.

Using the following interactive map, you can explore the IG score for different local authorities, as well as variations in consumption, healthy life expectancy, leisure, inequality and unemployment.

Key findings:

The CPP Inclusive Growth Community Index presented in this report is the second in a series of three metrics produced in partnership with the with the All-Party Parliamentary Group (APPG) on Inclusive Growth. The three measures aim to capture what matters for the good life, redefine what we mean by economic progress and aid our ability to deliver broad-based prosperity.

1. Variations in healthy life expectancy are key to understanding how broad-based prosperity differs across local areas in the UK. Our index suggests healthy life expectancy is more important in explaining differences between areas than any other single factor. The range in average healthy life expectancy across local authorities is 16 years. This is the same as the difference between the UK and Sudan.

2. Combined authorities tend to have lower than average inclusive growth scores, but with significant variation within their boundaries. Cambridgeshire and Peterborough is the only combined authority that has an above average IG score. Yet within these areas there are significant variations. For example, in Greater Manchester some local authorities have more than double the IG score of others. These new levels of regional government have an opportunity not only to raise average levels of prosperity, but to ensure that no areas are left behind.

3. Building vibrant labour markets are important for ensuring inclusive growth. Vibrant labour markets, defined as having high levels of good work, low levels of benefit claimants and a low health related employment gap, are positively correlated with our inclusive growth index. This adds to the evidence of the importance of good work in achieving broad-based prosperity.

4. Inclusive growth is closely related to the Index of Multiple Deprivation (IMD), but only weakly correlated with traditional economic measures at the local level. Gross Value Added (GVA) and Gross Household Disposable Income (GDHI) are poor proxies for the broad based economic progress local areas are seeking to achieve. Our index is more closely correlated with the IMD than traditional economic measures, signalling its ability to provide a broader assessment of economic progress.

5. More prosperous areas are more unequal, and less prosperous are less unequal. Poorer areas tend to have fewer people at the top end of the consumption spectrum, meaning their greater equality is due in large part to equality of deprivation. With a growing body of research showing inequality is a drag on growth, we must find ways to make the more prosperous places more equal and the more equal places more prosperous.

The CPP Community Index is the second in a series of three metrics produced in partnership with the All-Party Parliamentary Group (APPG) on Inclusive Growth. Together, they aim to redefine what we mean by economic progress and aid our ability to deliver broad-based prosperity. The final part of this series will be our analysis at employer level.