Last month the North East Mayor, Kim McGuinness, launched an interim Local Growth Plan, to guide the North East’s economic growth and the work of the North East Combined Authority for the next 10 years. In this blog, Martin Brookes, Chief Executive of VONNE and VCS representative on the Combined Authority Board explains why the Plan's inclusion of the foundational economy is so important and what that means for the VCSE sector.
The Mayor has made it her mission for the North East to become “the home of real opportunity, tackling child poverty and focusing on social inclusion in her economic plans for the region”.
There are three things that we welcome about the Local Growth Plan: inclusion of the foundational economy, focus on tackling child poverty and recognition of the voluntary, charity and social enterprise (VCSE) sector as a contributor to the regional economy.
What is the foundational economy?
The foundational economy provides services and goods that are essential to everyday life. This includes food, retail, energy, transport, construction, agriculture, care and education. It is the backbone of our economy, providing vital services and the supply chain to delivering wider growth in the region. But its role is often under-recognised and employment in the sector can be relatively insecure.
It is often overlooked in strategies because it is seen as lower productivity. And national pressures on regional bodies like the Combined Authority have sometimes encouraged them to ignore, or downplay, this aspect of local economies. Strategies for economic growth like to emphasise new technologies, innovation and high productivity sectors. This can be seen in the Combined Authority’s Local Growth Plan as it sets out six key industry sectors to drive economic growth. Those sectors are:
- Offshore wind and energy transition
- Advanced manufacturing, including electric vehicles
- Creative industries and content
- Life sciences, pharmaceuticals and process industries
- Tech, digital and AI
- Defence, security and space
These industries can provide good jobs. But the foundational economy is often where entry job opportunities are, for people who are economically inactive. They are a route into the labour market, and a key opportunity to tackle economic inactivity and skills. This is going to be a key part of the Combined Authority's focus; as it is a key focus of national government.
What does this mean for the VCSE sector?
Within the Local Growth Plan, Kim McGuinness has said that the North East Combined Authority is “Committed to driving economic growth that delivers for all our residents, including supporting our public services and strengthening our foundational economy.” The foundational economy is also identified as a unique economic opportunity for the Combined Authority to create strong regional foundations and transform communities, which helps deliver on the mission of making the North East the home of real opportunity. Put simply, our sector is part of the answer for generating economic growth in the region and it’s important that we now put ourselves forward positively with this offer.
The Plan says, "We need to address the underlying causes of poor health, strengthen public services, and tailor employment programmes to break barriers to re-joining the workforce."
It adds, "This includes drawing on the expertise of the VCSE sector to reach into communities to engage with and help families."
This is repeated elsewhere:
"Using the expertise of the VCSE sector, including both the knowledge and trust of communities, to provide support to out-of-work residents and direct employment pathways.”
The repeated and explicit emphasis on the VCSE sector is welcome, and brings an opportunity for us to engage with the Combined Authority while the Local Growth Plan is in its draft stage, as well as beyond, to ensure we create recognition and respect as a contributor to the economy.
An opportunity for recognition and support
The Local Growth Plan will shape the way that the Combined Authority thinks, and acts, in terms of economic policy, investment decisions, and the value it places on the sector. We need to ensure that the Combined Authority understands what the sector can do how it adds value to the local economy.
Our organisations and the services we provide contribute directly and indirectly to the economy of the region in several ways. These four categories provide a clear impact and make a strong case for recognition and support when engaging with the Combined Authority:
- Size of the sector
- Delivery of services
- Producing social value
- Making services better, more accountable, more legitimate
We can and should highlight this to the Combined Authority to help the sector get stronger, become more resilient and even more effective. VONNE will continue to do this through our relationship with the Combined Authority, including as VCS representative on the Cabinet. We need your voices to make this a success. If you have case studies that you can share with us, we welcome your expertise, please get in touch.
You can also share your voices directly with by attending one of their Local Growth Plan consultations, happening in April 2025.