Victoria Sutherland from What Works Growth discusses the benefits of social infrastructure for communities. However, despite its importance, it can be difficult to demonstrate the economic benefits gained from it.
This blog was first posted on the What Works Centre for Local Economic Growth website in September 2024. What Works Centre for Local Economic Growth are part of the Local Policy Innovation Partnership (LPIP) Hub Project Board.
As the What Works Centre for Local Economic Growth, it is perhaps unsurprising that we think local economic growth matters. It ensures good quality, well-paying jobs for residents, and helps improve living standards. However, we don’t think economic growth is everything – lots of other aspects of life are important – spending time with friends and family, enjoying nature and culture, having good health, and feeling part of a community, amongst others.
Lots of policy interventions contribute towards these other aspects of life. For example, a leisure centre could help us stay healthy or provide a place to spend time with friends. Despite these wider benefits, there is often pressure to quantify the impact of these non-economic interventions in terms of their contribution to local or national growth.
Understanding the local economic impacts of non-economic interventions
There are three issues with this. Firstly, it can miss the point of these interventions – leisure centres, parks, and community centres are valuable regardless of whether they contribute to local growth. Secondly, it is often difficult to establish impacts, especially if they are complex, and there is rarely good evidence to map across non-economic to economic impacts. And thirdly, trying to estimate the role these interventions play in economic growth can distract us from more important questions. Given the need for higher economic growth in the UK (articulated in the UK government’s mission to ‘kickstart economic growth’) and limited evidence on ‘what works’, we need to focus our efforts on understanding more about the interventions that are most likely to make a major contribution to growth.
Despite this, policymakers will often be asked to think through the local economic impacts of these policies. This can be a useful exercise if it helps provide clarity about the intervention and manage expectations about the contribution it can make to both economic and other outcomes. Logic models can be a good starting point for this process.
To help policymakers think through the local economic impacts of different policies, we publish evidence briefings on how to assess these impacts. Earlier this month we published our latest briefing on social infrastructure. As a policy area that isn’t normally thought about as ‘economic’, it provides a good example of these issues.
Why is social infrastructure important?
Social infrastructure plays an important role in all our lives – whether it is a sports or arts activity that increases our confidence, a professional network that allows us to share knowledge, or a pub quiz that means we get to know our neighbours. In each case, social infrastructure helps build relationships, networks, trust, cooperation, and reciprocity – collectively known as ‘social capital’.
There is a well-established evidence base that more social capital can improve health and mental health outcomes. And it’s likely to have other social benefits too. In addition to these outcomes, there is increasing interest in whether it can also help local economies grow.
Understanding the local economic impact of social infrastructure
A good starting point is to consider whether the social infrastructure will be generated by a business (such as a local bookshop running book groups), by providers of support services (such as a youth group or a senior lunch club), or a place (such as a park or community centre).
Each of these might generate local economic impacts independent of their role in providing social infrastructure. For example, a shop could create jobs, buy from local suppliers, pay rent, and make profits, all of which might benefit the local economy, regardless of whether it generates any social infrastructure. Many of our other briefings – such as plural and local ownership or public spaces – can help with estimating these direct benefits. Our suspicion is that when many people make the case that social infrastructure has local economic benefits it is these direct benefits they are thinking about rather than the indirect benefits arising through social infrastructure.
To think about how the social infrastructure might affect the local economy, identify the non-economic outcomes created by the business, support service or place and then map these across to local economic outcomes. We recommend starting by thinking about the number of beneficiaries, the intensity with which they use the social infrastructure, what type of social capital is likely to be created, and what outcomes are most likely to be affected. For example, a parent and baby group will only involve small numbers, but there may be limited ways for them to build connections with others at similar life stage. How regularly the parent and baby group meets, and how structured the activities are will influence the social capital and outcomes developed and their scale. For example, it could help improve the confidence of some new parents, helping them feel able to return to work.
Each stage of this process is challenging, but mapping from social capital to local economic benefits is likely to be even more so. Realistically, only some social capital will convert into local economic outcomes. Even when there is some evidence, this will normally be a correlation so the direction will be unclear. Only rarely will a precise estimate of the change in economic outcome caused by a change in social capital be available.
Fortunately, this is an occasion where precision is less important than realism – about the likely scale of any economic impacts and the fact that they are hardly ever what really matters when thinking about the benefits of social infrastructure.
This blog was written by Victoria Sutherland from the Works Centre for Local Economic Growth.
Disclaimer:
The views expressed in this analysis post are those of the author and not necessarily those of City-REDI or the University of Birmingham.