Inclusive growth is one of the key themes underpinning the aspiration to grow the London economy set out in the ‘Towards a new London Plan’ document. This begs the question as to what is meant by the term ‘inclusive economic growth’? We have had to grapple with this question when preparing Inclusive Economic Growth Strategies for local authorities (most recently in LB Greenwich).In the past we have opted for the OECD definition which states that:

Inclusive growth is defined as economic growth that is distributed fairly across society, and which creates opportunities for all[1].

The London Plan review picks up on two key issues which are seen as being relevant to inclusive economic growth: access to employment, and affordable workspace (which we will focus on in next week's article). But is this focus too narrow?

Our view is that inclusive economic growth needs to be a cross-cutting theme that flows throughout the updated London Plan document. Inclusive economic growth cuts across the issues of housing, design, health and well-being, the environment and transport. Whilst we recognise that achieving a strong and dynamic London economy is essential, it cannot be realised without benefitting the people who live here. And, in order for growth to be inclusive, this aspiration needs to be aligned with all elements of development. There are some signs of this within the London Plan review, with references to ‘healthy communities’ and ‘designing for everyone’ but we hope that this can be bought to the fore in any updated Plan.

Inclusive economy and social value added to planning applications

Some local authorities are ‘ahead of the game’ and recognise the important role which planning can have in supporting inclusive economic growth, and are setting out new planning validation requirements to support this goal.

It is commendable that some London Boroughs where we are working, such as LB Islington have incorporated inclusive economy aspirations into their planning validation checklists. Major developments incorporating employment uses are required to prepare Inclusive Economy Statements. As well as setting out details of any jobs created and local procurement opportunities, they also need to set out potential community benefits and social value initiatives.

Elsewhere across the country, local authorities are increasingly setting out requirements for social value strategies to be submitted alongside major applications. Wirral Council have recently updated their planning validation requirements to include this, and others such as Salford Council have requested this for some time. Whilst this can sometimes prove to be a burden for some developers, other developers we are working with are embracing the requirement for social value strategies.  Some are looking to us to help them to monitor their social value impacts more widely so that they can proactively demonstrate their achievements to local authorities and other stakeholders.

So, will we see an increased emphasis on preparing social value strategies as a result of an updated London Plan? We are already seeing an increased requirement for Employment and Skills Plans which can help to support and deliver inclusive growth and social value. We have recently worked with LB Havering for example on one of these to support their flagship Farnham and Hildene scheme, which forms the third phase of the Harold Hill Town Centre regeneration plans.  It will deliver 481 much-needed new homes, alongside high-quality retail and community spaces. Given the significance of the scheme, it is essential that the developer can demonstrate how it will support local employment and training opportunities. We therefore welcome this approach and recognise the benefits for developers of having someone with our expertise guide them through the process of preparing these strategies which both meets the Council’s requirements and is deliverable.

Linked to this, Health Impact Assessments and (to a lesser extent) Equalities Impact Assessments are now more routinely being requested as part of the planning process. Again, these are important tools to demonstrate how a development will impact on the local community and particularly diverse groups.

So, why is inclusive economic growth important:

• London currently has the highest unemployment rate of all regions at 6.4%[2]
• Black, Asian and Minority ethnic graduates from a low socio-economic background are 45% less likely to get a job compared to those who are white.[3]
• In Q2 2024[4], the employment rate for people with disabilities was 53%, compared to 81.6% for those without disabilities.
• 16% of the population in London hold no qualifications[5]. Far higher proportions of the population hold no qualifications in Barking and Dagenham (22.7%), Enfield (22.5%), Brent (21.7%), and Newham (20.7%)[MC5] [AP6] .
• 17.5% of London residents earn below the London living wage.[5] The difference is greatest for Brent (25.2%), Barking and Dagenham (23.8%) and Newham (23.5%).
• Child poverty effects 33% of children in London [6]. For some London borough’s the child poverty rate after housings costs is as high as 48% (Figure 1). The borough’s with the highest child poverty rates include Tower Hamlets (48%), Newham (44%), Hackney (43%), and Barking and Dagenham (42%).[8]
• Whilst somewhat dated, the Index of Multiple Deprivation (IMD) highlights that there are significant pockets of deprivation across London.[9] Notably, Barking and Dagenham, Hackney, and Newham were ranked among the 15 most deprived local authorities in England.

Figure 1: Child Poverty Rates (after Housing Costs) across London Boroughs