Published on 8 August 2023
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What is the role of a Combined Authority in nurturing social capital?

Personal relationships and trust can support economic growth and collective wellbeing, writes Robin Fry, Inclusive Economy Advisor for the North of Tyne Combined Authority.

It can be difficult to define exactly what ‘social capital’ is. Perhaps this is why it tends not to feature prominently in many economic development policies. Where social capital exists, you can expect to feel a sense of pride, belonging, togetherness, safety, and having each other’s backs. The people of the North East are often considered to be some of the proudest and friendliest in the country. So how might this translate into inclusive economic growth and collective wellbeing for regions across the UK?

The Bennett Institute for Public Policy’s Wealth Economy approach identifies social capital as one of six assets – the others being natural, human, knowledge, institutional, and physical capital – that together enable people to fulfil their economic potential and lead a meaningful life.

This approach was at the core of the government’s Levelling Up White paper (Feb 2022) which considers social capital to be the personal relationships and trust that helps shape the norms and values which support economic growth and wellbeing. In the words of the White Paper’s authors – “the glue that holds society together.” As such, social capital is recognised as a key economic asset and contributor to inclusive wealth.

Writing on the relationship between social capital and economic development, Mcintosh and Dasgupta (2010) consider social capital as pivotal to economic development due to its important role in building strong networks of trust, and argue that “the deep requirement for economic progress is the development of trust among people.”

This trust contributes to an increase in ‘total factor productivity’ (TFP) the secret sauce that can increase levels of production without increasing levels of labour and capital, a subject that Dimitri Zenghelis has already written about for the Bennett Institute blog. Essentially, people who work in trusting environments tend to work more effectively. The result is economic growth and a subsequent increase in the economy’s wealth.

In the North East of England, 2,000 residents provided evidence of the importance of social capital as part of the co-design of the North of Tyne Wellbeing Framework. The Framework positions collective wellbeing at the heart of the combined authority’s decision-making to create a more inclusive economy by providing the organisation with the language to articulate the outcomes that it wants to achieve and a set of indicators to understand progress.

During the initial consultation phase of the framework, residents highlighted the importance of social relationships and a strong sense of community.

“The street I live on, everyone stops to chat to each other. Everyone knows everyone. There’s a good community feel on the street. We cook for each other.”

Emerging from the Covid pandemic and lockdown, The Relationships Project – an organisation with a developing practice in relationship-based approaches, sees strong relationships as assets in themselves as well as tools to achieve social and economic progress. Supported by a network of associates and collaborators, they are producing a vast body of work that explores the role of relationships in improving the health and happiness of people and communities. Their Bridge Builders’ Handbook provides practical information for Local and Combined Authorities who seek to grow social capital by nurturing the foundations of trust between groups and organisations.

This is not only about responding to emergencies but about investing in communities where we are all ready and able to seize opportunity, cope with adversity and support one another in good times and bad.” (‘The Sense of Connection’, Relationships Project)

So, what are the implications of this growing body of evidence for a Combined Authority? If high levels of social capital result in resilient communities, seized opportunities and strong economies then it surely must be key to realising the  North of Tyne’s ambition of:

“A dynamic and more inclusive economy, one that brings together people and opportunities to create vibrant communities and a high quality of life, narrowing inequalities and ensuring that all residents have a stake in our region’s future.”

Using the Wellbeing Framework as a compass, and following a lengthy period of consultation and co-design, the North of Tyne Combined Authority is investing almost £6m in programmes that seek to build social capital through:

  • increasing opportunities for people to come together to build strong and trusting relationships.
  • strengthening the capacity of voluntary, community and social enterprise (VCSE) sector organisations to meet the needs of the local community.
  • inviting communities to become active participants in the decisions, plans, initiatives and services that shape our local places.

This investment is going directly into communities, recognising they are often best placed to identify and respond to the challenges they face. With the support of Local Authority and VCSE sector partners, the North of Tyne Combined Authority is investing in small neighbourhood groups, opportunities and skills for volunteers, and enhancing places and spaces for people to come together. At the heart of this investment is a commitment for local government and citizens to work together to tackle some of the complex problems being faced.

Participating in the new online Wealth Economy course, developed and led by the Bennett Institute’s Professor Diane Coyle and delivered through Cambridge Advance Online, provides the North of Tyne Combined Authority with the tools to consider what their ‘balance sheet’ might look like across all six capitals. They are keen to make the best use of their collective, and sometimes scarce, assets so that everyone in the region has what they need to live well now, and in the future.

The ongoing support of the Bennett Institute for Public Policy, alongside like-minded partners such as the Inclusive Growth Network, Centre for Thriving Places and The Relationships Project, will help to draw out, connect, and amplify learning and create impact. Together they’re developing a sense of shared purpose and togetherness, increasing their levels of TFP, and moving closer to a future where local people and our planet can really thrive.

Find out more about the University of Cambridge’s online Wealth Economy course.

The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.

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