Bath Beyond 2020: Creating a Resilient Economy Together: A Situation Report

What should we do now in order to make it possible to build the sustainable and equitable Bath we aspire to?

This is a situation report designed to instigate a debate between the different anchor institutions. This does not constitute a traditional academic report. It is a synthesis of existing knowledge from multiple sources in conjunction with a series of interviews with key actors in regional and local anchor institutions. This is a piece of informed commentary which will hopefully result in policies for building back better.

For the purposes of this situation report the primary focus is on the City of Bath and the immediate adjacent local electoral districts. As a matter of analytical and administrative ease this focus occasionally expands to the city-region, the West of England and the South West generally, as required by the administrative and policy implementation boundaries determined by regional and national actors that incorporate the BANES local authority.

We recommend that that the following steps be taken to bring about a more sustainable and equitable society:

1. Bath’s leading public sector players can do more to act as true anchor institutions. They should publish strategies and action plans that clearly specify how they will collaborate and use their economic power and influence for the benefit of local businesses and local communities. The University of Bath should play an active and leading role.
2. Bath’s resilient growth strategy should build on the goodwill shown by businesses for communities during COVID-19.
3. Bath can and should do more to build a dynamic and resilient small business sector based on cluster growth strategies in the areas of specialist professional services, healthcare, creative and digital technologies and green technologies.
4. Bath needs a holistic strategy aimed at enabling all young people and children living and working in the area to flourish now and in the future.
5. Bath should use the UN Sustainable Development Goals (SDGs) as a framework for creating a local impact management and measurement system for tracking and reporting its progress towards achieving more inclusive and sustainable prosperity.

How could this be achieved practically?

• Sign-up all medium to large employers to the (Real) Living Wage;
• Build more affordable social housing as a priority;
• Provide more extensive subsidies to public transportation within the City of Bath and with better connections between villages and with the City of Bristol[1];
• Develop further education and apprenticeship routes into new green jobs in, for example, decarbonising the housing stock, this would allow for useful linkages between BANES, Bath College and the universities;
• Expand childcare and early years services in the most disadvantaged communities in BANES, applying evidence from the effectiveness of early intervention strategies;
• Develop an evidence-informed framework for knowledge co-production and policy creation and evaluation, where people working between the various anchor institutions can interact with the work performed by the University of Bath and Bath Spa University.

This situation report on Bath’s crisis-hit economy is the product of the ‘local conversations’ generated by means of a series of in-depth stakeholder interviews, which we held during the summer of 2020. We interviewed a diversity of large and small businesses from manufacturing and engineering, software development and design, property and construction, finance and accountancy, architecture, energy supply and hospitality, as well as public and social sector actors including, but not limited to, BANES Council, the NHS, CURO Housing Association and the Universities of Bath and Bath Spa. The goal of this situation report is to contribute to debate among the anchor institutions on how best to promote inclusive and sustainable prosperity in a post-COVID-19, post-Brexit BANES.

The City of Bath, while actively interested in achieving carbon neutrality following the declaration of a climate emergency by the BANES Council[2], still struggles to achieve inclusive growth. An effective way of achieving inclusive and sustainable growth is with a ‘place-based’ policy, where local people have a say in what needs to be done and how it is to be done.

A major advantage to the locality is the presence of two higher education establishments and a further education college. These post-secondary institutions can be used to great effect to bring about the inclusive and sustainable growth desired by BANES. The University of Bath can help in a leadership and knowledge co-production role. Bath’s hospitals, especially the RUH, are also important drivers of the ‘third age economy’ and the future health care sector. Bath’s NHS sector and universities together generate more than one in five local job opportunities directly and indirectly. 37% of Bath’s total employment is in health, education and other predominantly public sector activities compared to a national figure of 26%. A dynamic, innovative public sector is a source of local economic resilience.

There are some major challenges facing BANES that were identified during our interviews.

• Lack of affordable housing, working poverty and deprivation
• Shortage of high-quality business space
• Skills gaps
• Shutdown of the tourist economy
• Social polarisation

The strong performance of Bath’s universities and Bath College on employability, apprenticeships and educational progression appears to contrast with the local ‘skills shortages’ reported by the interviewees. We can attribute this to labour market barriers – transport accessibility and a lack of affordable housing – and a shortage of good quality jobs that offer decent pay and a career start. There is wide recognition that Bath faces distinctive problems of governance that go beyond differences derived from political party disputes; the aptitude for visionary leadership and the dissatisfaction with respect to the relationship between central and local government was conveyed by interviewees. Those interviewed shared a view that COVID-19 has exacerbated Bath’s inequalities. Home-working capabilities are different for those at either end of the socio-economic spectrum.

Tourist arrivals were affected from January, with reduced numbers from China, and by the end of March the flow of visitors completely dried up, with no significant improvement in numbers until lock-down rules were eased at the beginning of July. The financial impact on BANES Council illustrates the scale of the hit. Against an annual budget of £120 million, by the end of June it was anticipating lost income of £30 million from parking, museums and commercial rents, £7.5 million in reduced council tax and business rates, and an extra £10 million in COVID-19-related additional costs. Faced with a £40 million deficit it was clear that only extraordinary central government transfers would enable it to avoid issuing a ‘section 114 notice’ bankruptcy notice.  Brexit triggers perceived threats, including a further loss in tourism and trade due to new border restrictions, new tariffs, supply chain disruptions, a fall in the inflow of skilled European workers and international students, and the resulting loss of competitiveness in export markets.

In the recovery, Bath will need to throw its weight behind regional strategies for economic growth, competitiveness and employment – led by the West of England Authority (WECA) and the Local Enterprise Partnership (LEP) and in future the Western Gateway Partnership. Thus, the geographical boundaries of Bath’s economic development strategy need to be stretched regionally, calling for strong local leadership to ensure that ‘competitive collaboration’ between place-based stakeholders results in a win-win game for all.  There are positive signs of new collaborative initiatives between anchor institutions. COVID-19 may just be the catalyst for launching an anchor institution-based approach to inclusive growth.

What do we need to do to improve?

We need to attract inward investment in high value knowledge-based sectors and incentivise high growth companies and new entrepreneurs to build their businesses in the area. ‘Reinventing’ Bath as a place to do business and as a place to live and work will support and strengthen existing business connections. It would also be less city-centric: emphasising the potential attractions of locating in the towns and villages for which Bath is a hub, where community-led business initiatives have unrealised potential – for example, revitalisation of local pubs, post offices and other amenities.

We need to develop growth clusters led by anchor institutions in areas where Bath has a competitive advantage: the health-care economy (which many experts believe will lead the next fifty years of global economic growth), the creative economy, the digital economy and the green economy. We use the term ‘economy’ rather than ‘sector’ because the technologies and markets in these areas converge and overlap – for example, digital medicine or smart eco-transport systems. Cluster strategies would need to cover innovation, technical support and skills programmes geared to the needs of SMEs in particular. New business-led skills initiatives like the RESTART/ISTART need to be accelerated.[3]

We need to renew and re-purpose BANES town centres – the City of Bath in particular – is a high priority given the impact of the COVID-19 lockdown on the use of office and retail space, which have reinforced strong trends toward on-line shopping and home-based teleworking.

We need to switch Bath to a green growth model and build on from the Council’s declaration of a Climate emergency in March 2019. The main focus of this was on how to achieve emission reduction targets by 2030 through improvement in the energy efficiency of buildings (many old and badly insulated), a shift to public transport, and promotion of local renewable energy generation. Bath’s older population is vulnerable to protracted heat waves, and localised flooding is a perennial risk to housing where the hilly topography concentrates storm run-off.[4]

We need to close the educational attainment gap, providing better job and apprenticeship opportunities for young people and graduate retention to keep skilled people located in the region. Some of our business interviewees were able to point to strong collaborative links, often based on links with individual academics. Other respondents reported having very little contact with any of the post-secondary institutions in the city. Nearly all those interviewed cited these post-secondary institutions as assets that were not reaching their full potential for local impact. The interviewees perceived scope for the University of Bath to become much more engaged with its surrounding economy and communities.

Moving the University of Bath towards a role in promoting social innovation that builds on its position as an anchor institution requires thinking beyond the conventional ‘triple helix’ model of engagement between universities, industry and government. A new ‘quadruple helix’ model is already being put into practice by the University of Manchester and new universities such as Aalto in Finland.[5] This more expansive and inclusive model adds users to the three stakeholders in the original triple helix model. Importantly, it extends the locus of innovation activity from the campus to ‘living labs’ closer to users – whether they are firms, public sector agencies or community-led organisations.

The extraordinary requirements and challenges of COVID-19 has the opportunity to place the University of Bath back at the heart of the place-based recovery debate. Existing tools, models and structures exist and have been successful in both the UK and the rest of the world, but they all require leadership. In the context of Bath, it is becoming clear that the University of Bath, in tandem with Bath Spa University and Bath College, are well  placed to provide some of the  leadership needed for the redevelopment of Bath post-COVID.

[1] For example: internal City of Bath bus services are provided free of charge and put in place a 75% discount for regular commuters between Bristol and Bath via monthly or annual employee-employer interest free loans to support the purchase of monthly and annual transport tickets. More efforts should be put in place for a tax efficient structure similar to the Irish taxsaver.ie scheme, which will result in a fare reduction of up to 52% and a reduced social insurance tax for employers.

[2] https://www.bathnes.gov.uk/climate-emergency

[3] https://www.tbebathandsomerset.co.uk/weca-istart-funding/#:~:text=I%2DSTART%20is%20designed%20to,East%20Somerset%20Council%20and%20WECA.

[4] Gasparrini, A., & Armstrong, B. (2011). The impact of heat waves on mortality. Epidemiology (Cambridge, Mass.), 22(1), 68–73. https://doi.org/10.1097/EDE.0b013e3181fdcd99

[5] Reichert, Sybille (2019). The Role of Universities in Regional Innovation Ecosystems. Brussels. European Universities Association.