Public Policy

Boosting enterprise in deprived areas has been a key goal of Gordon Brown's Treasury. But the results of many enterprise programmes have been disappointing, with deprived areas tending to stay deprived.

Government enterprise policy needs to be a lot smarter. The Centre for Cities at think tank Institute for Public Policy Research has been looking into this. Our City Markets report proposes a new approach for the next phase of business promotion in deprived areas.

We have identified a group of 30 business-deprived areas with very low levels of business activity. Some of these are in London, but most are in the North West and North East of England, in places like St Helens and Sunderland. For most of these areas, we are calling for bigger interventions to boost demand for private sector jobs and investment.

A blanket approach to enterprise does not work. There should be fewer - but more strategic - interventions in deprived areas. So rather than focusing on all deprived areas, business-led regeneration efforts should treat business-deprived areas as a priority. And because each business-deprived area is different, they each require tailored strategies for business development.

We recommend a focus not on the hardest to reach - like Easington, in the North East. Or on those closest to success - like Bristol, in the West. But on business-deprived areas with the potential for business growth - like Doncaster, South Yorkshire.

Understanding the problem

Business-deprived areas are not all the same. Some suffer from local market failures, such as limited access to finance. Others face more fundamental problems such as population loss. Each business-deprived area needs to find out why it has low business activity.

Business-led regeneration should focus most on those business-deprived areas that have specific problems, but some assets too. Doncaster, for example, has the potential for more business growth - and has the advantage of very good rail and road connections.
Areas like Easington face serious structural issues as well as particular market failures. They have seen long-run population and jobs decline as well as poor health and education outcomes. Promoting start-ups here is likely to bring low returns. For business development to work in these areas, they first of all need to get the basics right.

Other business-deprived areas, like Lewisham, south-east London, have very few businesses - but they are part of wider labour markets and commuter areas. They function as residential locations, with many of their residents working outside the area.
Rather than lots of new businesses, Lewisham would benefit from improved transport and skills, so its residents are better connected to available jobs.

The role for CSR

So what does this mean for corporate social responsibility? CSR efforts should complement business-led regeneration, with one strategy for business-deprived areas where business is most likely to flourish and another for those hardest-to-reach areas. CSR practitioners have a role to play in both scenarios, but the role needs to be different - one helping to lever in business investment and jobs, the other helping to re-connect people and places to the wider economy.

Centre for Cities
www.ippr.org.uk/centreforcities

The Inner City 100
www.theinnercity100.org

City Growth
www.sbs.gov.uk/citygrowth