Turning growth into opportunity

John Healey’s first major speech as Chancellor last week set out the economic challenge facing the Government as it approaches party conference season and its first Budget on 28th October.

John is a former parliamentary colleague and a friend, and I know him to be deeply committed to public service and to the communities he represents. His speech at the Manufacturing Technology Centre reflected that: serious about the constraints on the public finances, but optimistic about Britain’s capacity for growth.

His central argument was that fiscal stability and growth must reinforce each other. Yet his most important point was perhaps his description of what growth should mean in practice: a young person finding work, a small business winning a contract or a community gaining confidence in its future.

That is the right test. The next question is how it can be delivered.

The Chancellor announced measures intended to spread investment more widely, including changes to the Treasury’s Green Book, greater fiscal devolution and new support for growing northern businesses. His proposal to assess places partly on what they could become, rather than only what they are today, is particularly significant.

Areas with weaker transport connections, poorer health outcomes or lower productivity can struggle to attract investment precisely because they have experienced these disadvantages over many years. A more forward-looking approach should help government identify where carefully targeted investment can unlock unrealised economic potential.

As conference season approaches, much of the debate will inevitably focus on the welfare bill. This is not simply a question of overall expenditure. It is also about whether the current system produces better outcomes for people, employers, local services and the economy.

Nearly one million young people are currently outside education, employment or training. The interim findings from Alan Milburn’s review suggest that, without effective intervention, this number could reach 1.25 million within five years. Around six in ten have never worked, while poor mental health, fewer entry-level jobs, declining apprenticeship opportunities and difficult transitions between education and employment are all contributing factors.

These figures point to a systemic challenge rather than a single cause or an easy solution.

A sustainable welfare system must provide security for those who need it while offering practical routes towards work for those who are able to participate. That requires appropriate expectations, but also credible opportunities, effective employment support and employers prepared to provide a first step.

Housing must be part of this discussion. Prime Minister Andy Burnham recently warned against changes that could increase homelessness. Whatever view is taken of individual welfare measures, that is an important test of their wider consequences.

Reducing expenditure in one area may not improve the overall position if it creates greater demand for temporary accommodation, healthcare, children’s services or crisis support elsewhere. Equally, spending more does not automatically guarantee better results. Policy should be assessed against clear evidence: whether it improves housing stability, supports movement into sustained employment and reduces repeated reliance on emergency services.

This is where third-sector organisations can make an important contribution. Many are deeply rooted in particular places and understand how housing, health, employment, addiction, debt and family circumstances interact in people’s lives.

St George’s Crypt in Leeds is a powerful example. Its work extends beyond responding to the immediate crisis of homelessness. Alongside accommodation and practical care, it provides support with recovery, training, engagement and resettlement.

That model matters because a person rarely experiences homelessness as an isolated problem. The causes and consequences may involve health, employment, relationships, finances or substance misuse. Progress therefore often depends on sustained, coordinated support rather than a succession of disconnected interventions.

Place-based organisations can offer relationships, local knowledge and trust that larger systems sometimes struggle to replicate. They may also identify emerging problems before somebody reaches the point of crisis.

However, their contribution should not simply be assumed. Where public funding is involved, programmes should have clear objectives, reliable data and proper evaluation. The strongest case for earlier support is not that every intervention will save money, but that well-designed programmes can improve outcomes and, in some circumstances, avoid more intensive and expensive responses later.

The same discipline should inform the response to youth worklessness.

A young person experiencing poor mental health, insecure housing, limited transport and little previous work experience does not necessarily need several separate programmes. They need a coherent route forward, shaped around their circumstances and connected to genuine opportunities in the local labour market.

The Milburn review should therefore be considered as part of the wider welfare and growth debate. Stronger technical routes, meaningful work experience, appropriate mental health support and better incentives for employers to recruit and retain young people could improve individual prospects while strengthening the workforce.

The Government cannot deliver that alone. Employers, colleges, universities, councils, health services and local charities each hold part of the answer. The right approach will also vary between Leeds, South Yorkshire, the West Midlands and rural or coastal communities. National policy must establish clear objectives, but local partners need sufficient flexibility to respond to the circumstances of their place.

John Healey's speech was right to connect growth with partnership and devolution. The challenge for the Budget will be to turn those principles into decisions that are financially credible, locally workable and capable of producing measurable results.

There will be difficult choices. A responsible approach must examine both immediate costs and longer-term consequences, without assuming that either additional spending or reductions will, by themselves, create better outcomes.

If the Chancellor wants growth in every postcode, the measure of success will be whether more people can find secure housing, enter sustainable employment and build greater control over their lives. That is how economic policy becomes meaningful - and how growth can reach the people and places with the greatest unrealised potential.

Paula Sherriff