RSA warns that most citzens feel locked out of key economic decision making

By agency reporter
March 8, 2018

Most citizens feel locked-out from economic decisions made by key bodies like the Bank of England and HM Treasury, a new study warns — with only 13 per cent in the North East saying they have any influence over central government.

  • 72 per cent report 'little' or 'no' influence over central government on Brexit, despite vote to 'take back control', new survey reveals.
  • People in the North East feel the least (13 per cent) influence in the UK over central government, but the most (42 per cent) influence over local councils: decentralisation is essential.  
  • The Royal Society of Arts  (RSA) calls for 'double devolution', citizens' juries and participatory budgeting to rebuild trust. 

But Building a Public Culture of Economics, the final report of the RSA’s Citizens’ Economic Council, finds half (47 per cent) would trust decision-makers more if they formally included fellow Britons through 'jury service' or participatory budgeting.

The two-year qualitative study to engage a group of citizens in economic policy found that those involved felt much more able to apply economic issues to their lives.
But crucially, it also found that the economic experts involved thought the experiment helped them make more informed decisions, understand citizens’ perspectives and to communicate complex economic issues more effectively.
A survey by RSA and Populus, conducted as part of the research, warns of an ‘economic democracy deficit’ between citizens and key institutions:

  • Only 22 per cent of citizens think they influence central government's economic policy.
  • People generally feel they have more influence over local institutions than national ones: a third say they have “a lot of” or “a little” influence over economic decisions made by local authorities (33 per cent), followed by local businesses (31 per cent); trade unions (28 per cent); the NHS (25 per cent); central government e.g. HM Treasury (22 per cent); the Bank of England (20 per cent); local high street banks (20 per cent); FTSE 100 chief executives (18 per cent), and finally Local Enterprise Partnerships (16 per cent).
  • but only three per cent say they have 'a lot' of influence over Local Economic Partnerships, unelected bodies designed to set local priorities on key areas like skills; the RSA says LEPs must become much more transparent and accountable.
  • National public policy appears distant from peoples’ lived experience locally: for instance, North East residents reported the most influence in the UK over local councils (42 per cent) but the least over central government (13 per cent); the RSA recommends that ‘double devolution’ to local bodies and to citizens could help bridge this gap. 
  • 'Left-behind' areas feel less influence, while people in the capital generally report more control over most institutions – however, on local councils, the North East (42 per cent) and Scotland (40 per cent) feel they have more influence than Londoners (38 per cent); and people in Yorkshire (41 per cent) and the North East (41 per cent) feel more influence over local businesses than those in the capital (38 per cent). Meanwhile just nine per cent in the South West feel they have any influence over local high street banks.
  • Few people think they have any influence over Brexit, despite the vote to ‘take back control': 72 per cent still feel that they have either not very much, or no, influence over how central government is handling Brexit while 73 per cent feel the same about the Bank of England.

The report recommends that the Bank of England formalise its current efforts to engage with the public directly, such as through 'citizens’ reference panels' of randomly-selected citizens to help the Bank connect directly with the concerns and experiences of citizens, especially in 'left-behind' UK regions and nations.

 Andy Haldane, the Bank of England's chief economist, said: "The RSA’s excellent report affirms the importance of all UK institutions engaging with citizens.  The Bank of England has been climbing the ladder of public engagement for a number of years – through our network of regional Agents, visits by members of our policy committees to companies and, more recently, our educational programme and my town hall events. 

"We will be climbing a few more rungs in the year ahead, speaking to a wider audience than ever previously, in language more accessible than ever previously.  The RSA report will be a spur to us doing more with more people, in a way which improves understanding of, and the performance of, the economy and economic policy.”

Other recommendations include:

  • 'Double devolution', i.e. giving local citizens a formal scrutiny role should be a condition of devolution of more powers to local bodies, inspired by movements like the People’s Powerhouse in the North of England.
  • More councils adopt measures like participatory budgeting to engage citizens, as many, including Newcastle, have already done.
  • Local Enterprise Partnerships taking radical action to improve transparency, such as local economic 'jury service'.

Tony Greenham, director of economics at the RSA, said: “We all know that trust in economic institutions is low – but this isn’t inevitable. Our research shows that half of citizens would trust economic decision-making more if they knew ordinary people like themselves were involved, as with the jury system.
“This is a two-way process too: not only do citizens feel more confident about economics and more able to influence the economy, but crucially, it means 'experts' make more informed decisions that enjoy broader public support.
“Locally, although it’s generally a better story, councils can do much more to engage citizens and rebuild trust, especially as they agree devolution deals. Local Enterprise Partnerships in particular as unelected bodies must work harder to involve ordinary people, such as through 'local jury service', if they are going to secure a real mandate.
“Rebuilding trust, especially in post-industrial areas, will take time – which is exactly why the Bank of England, and other economic bodies, must adopt this approach without delay.”

Reema Patel, report co-author, added: “Brexit has illustrated a widening chasm between those who take decisions and those affected by them the most. Despite the EU referendum vote, Britons have still not 'taken back control' of the important economic decisions that affect their lives: 72 per cent of our survey respondents feel that they have either not very much, or no, influence over how central government is handling Brexit.

“We spoke directly with residents in Port Talbot, Clacton-on-Sea, Oldham, Birmingham and other areas with a significant 'Leave' vote, who told us how disenfranchised and locked out they feel. 

“It is essential that we find ways to preventing a huge disconnect between those who voted and those who took decisions economic and political decisions arising again, and engaging at a regional level is key to that."

* More about The People's Powerhouse here

* Download Building a Public Culture of Economics here

* The RSA


Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.