Agenda item
Economic Development - Update on Metrics (19:05 -19:50)
Minutes:
4.1 The Chair welcomed to the meeting theEconomic Development Manager,Michael Toyer from London Borough of Hackney.
4.2 The Chairintroduced the item and outlined that the update on the development of the metrics was linked to the Council’s work on economic development.
This item was to ensure the objectives in the Council’s Economic Development Plan were being achieved and to review how the Council proposes to measure the impact of the activities undertaken to shape an inclusive economy.
This discussion was to review the Council’s work to develop new metrics to measure the impact.
4.3 The information presented covered:
· Introduction to economic development metrics context
· Council’s approach to developing metrics.
· Examples of key activity streams with example metrics.
4.4 The Chair referred to the presentation in the agenda is on pages 9-25.
4.5 The Economic Development Manager commenced his presentation and the main points from the presentation are outlined below.
4.5.1 The officer reminded the Commission this presentation was about the approach to metrics not the actual measures in place.
4.5.2 The officer recapped on the levers available for economic development.
4.5.3 The officer highlighted the difference between economic growth and economic development.
4.5.4 The Economic Development Manager emphasised the initial approach to developing metrics is to understand what is being measured and clarity on what was being measured.
· Inputs – activity going into this is it financial resource, time or policies developed
· Process – activity tracking if the process is followed to a set period of time, standards etc
· Outputs – results coming out from the process, document, change in circumstance (securing a job) that are countable or tangible.
· Outcomes – aggregation of outputs or change because of all the activity.
· Long term outcomes - Currently there is a focus on the sequencing of outcomes e.g. aim to achieve an inclusive economy.
4.5.5 From the points above the officer pointed out it would not be beneficial to jump straight to bullet point 5 without going through 1-4 because the other processes and activities would need to be achieved too. This leads to the term intermediary outcomes (short, medium and long term). A build-up of outcomes.
4.5.6 The officer highlighted that the outcomes can also be different to what is expected. The outcome could be impacted by policy changes by regional structures for example the GLA.
4.5.7 Therefore, it was important to consider this in the different forms of measurements.
4.5.8 Pre pandemic there was research by the Institute of Global Prosperity which concluded that we should not rely on traditional economic metrics such as GDP. They are encouraging other elements of prosperity to be considered (illustrated in the themes on slide 5). The officer pointed out these are valid and good but difficult to measure because there is more to consider, review and track.
4.5.9 The officer referred to the Theory of Change / Logic Model. The is a different way of thinking that would impact your planning and measurement. This type of approach is commonplace for health providers, health services and charitable foundations - they have used this for years. This approach is filtering through other areas of the public sector. Essentially this is about thinking through the sequence of how to get from where you are now to where you want to be. Tracking the changes and journey then measuring the activity. This moves away from having a spreadsheet of activities and setting up a board to monitor. This approach is more nuanced and creates additional risks because it takes more time to achieve.
4.5.10 An example by Nestor (community cooking) of theory of change was cited on slide 8. This illustrated the flow and types of activities and builds in assumptions.
4.5.11 For Hackney an assumption in the manifesto commitments related to Economic Development was that social businesses and co-operatives all offer good quality work, are strong democratic organisations and use local suppliers. The officer pointed out this is a valid assumption but was an assumption not a fact. The officer explained that assumptions are fine, but it was good to ensure they are visible too.
4.5.12 An example of the Logic Model was demonstrated on slide 9 a project to improve the environment and promote walking in deprived neighbourhoods.
4.5.13 The officer advised this model was a sequential flow from left to right.
· Situation/need
· Resources / inputs
· Activities
· Outputs
· Outcomes – sequencing of outcomes short term, medium term, and long term.
4.5.14 This model also has the assumptions listed.
4.5.15 The third example on slide 10 was the demonstration of a template for local economic growth.
4.5.16 The example of affordable workspace was used to illustrate an area of local challenge. The officer explained currently affordable workspace leveraged through Section 106 planning system. They count the quantum of affordable workspace. The officer questioned if this was satisfactory taking into consideration the inclusive economy way of thinking. traditionally there has been limited understanding of who the beneficiaries are (who would use the affordable workspace).
4.5.17 The officer highlighted that affordable workspace will always be a challenge. Using the planning system, the technical demand is based on floor space for commercial properties. Although it was points out that in London even if they maximised provision, it would still not meet demand. If Hackney increased provision this would increase demand toward Hackney from across London. Therefore, the council should consider how to target their affordable workspace provision. For example, having spaces suitable for craft, tech, industrial scale kitchens (community kitchens) or businesses moving from being home based. The Council will need to make decisions about how this is targeted in the future.
4.5.18 The officer pointed out that planning policies can only be reviewed at certain points in the cycle, and this does provide some constraints.
4.5.19 Slide 13 illustrated an evaluation using the logic model for affordable workspace (this was carried for the GLA regeneration fund by a consultancy firm CAG). This evaluation was carried out at the end of the process. This demonstrated that when an evaluation is not planned early in the process how it can result in a negative outcome.
4.5.20 Slide 14 illustrated a more intentional (for illustrative purposes only) evaluation highlighting context, inputs, activities etc.
4.5.21 Slide 15 presented an illustration of the potential areas that could be measured under the logic model.
4.5.22 The officer informed the Commission this work is not new and has been happening for several years and will continue to happen.
4.5.23 The Economic Development Team is working more closely to with the corporate policy team to link in the other work stream of embedding the strategic plan.
4.5.24 The Economic Development Team is also linked into the Council’s transformation work to embed a more intentional approach.
4.5.25 As this is a new approach, they will be trailing this in the Economy, Regeneration & New Homes division and developing an outcomes framework. A consultant will be supporting this work. The areas being trailed are employment, skills & opportunities and increasing local & social spend.
4.5.26 The officer pointed out the focus is usually on procurement, but this approach will involve commissioning services, procurement and the economic development team. Joint working to achieve the long-term goals.
4.5.27 In Area Regeneration, they are working on improving their own practice by carrying out summative evaluation – an evaluation at the end. This is to develop the measurements as the piece of work or project progresses to acquire a better set of measures. This will enable them to learn as they go with the ability to adapt the program too.
4.6 Questions, Answers and Discussion
(i) Members highlighted 2 points that stood out for them:
a) there can be an issue doing the measures after the fact (in the rea view mirror)
b) it can take a long time to collate, and outcomes are materialising irrespective of if they are being measuring or not.
Members pointed out that these 2 aspects were interrelate because the Council had already done a lot of work in relation to inclusive growth, economic development, and regeneration to achieve the strategic priorities.
Member were of the view not having an embedded evaluation and metrics did not prohibit post hoc evaluation to understand how things have changed. Members highlighted the Council should review the learning to be able to make better decisions in the future.
(ii) Members asked about the Council’s learning from past work to understand and inform the measures for future strategies.
In response the Economic Development Manager from LBH confirmed they can evaluate any programme at the end with a summative evaluation. This is very common, but this has better outcomes when planed in advance and advance planning is best practice.
In relation to conducting the review this will depend on what is being reviewed. For example, if they take into consideration the measures the Institute of Global Prosperity (IGP) has suggested using it can be a challenge to link the regeneration activity to the change.
The Economic Development Manager added the economic realm is different to health services and the health measures are clearer to attribute to an activity.
The officer advocated for measuring and evaluating each individual program. It was important to be clear about the targeted inputs and the results expected, and then to measure them. The officer pointed out that id the data has been collated they can evaluate but due to the cyber-attack access to data can be a challenge. In essence this can be done but the officer highlighted that consideration should be given to the time and effort allocated versus the value they would glean from the work (the officer was not advocating for it not to be done). The officer advised considering the best use of limited resources. It was pointed out that the economic development team could do a bit of both, but if they did the rear review piece this would stop progress on the forward looking work.
(iii) Members asked about the theory of change and the assumptions made. Members queried if assumptions had changed (trends shifted) post pandemic to reflect the changing needs within the community. Members asked if there was data to support this or the council was aware of any data?
(iv) Members referred to the affordable workspace example and asked if the trends had changed since the pandemic? Members had observed more businesses using coffee shops as a place to work. Members asked if this was reflected in the affordable workspace data.
In response the Economic Development Manager from LBH replied in relation to assumptions the two examples in the presentation were currently being progressed. For the area of employment, the officer anticipated some of the assumptions might have changed post pandemic. Explaining there are segments of the workforce that have opted out and were not working anymore. This might change assumption like employment for over 50s. Pointing out historically the council had targeted and had programs for this age group. However, if the council does acquire information that show a different trend to the data (i.e., untested) it would be listed as an assumption.
In response to the question about affordable workspace, the officer informed following engagement with workspace providers the council has noted that they still have waiting lists. Therefore, demand is still present. However increasingly they do see individuals working in cafes. Th driver for this is but could be linked to people working from home and choosing to work in a café for a bit for a break or socialization. It was also noted that some workspace providers have had to slightly amend their offer to be more flexible to maintain demand.
The officer’s professional view in relation to affordable workspace was that the council needed to do more work on the typology of spaces i.e., move away from being overly reliant on the office style space. The officer pointed out that this business cohort could pay for their office space. Whereas the community aspect of the inclusive economy was different i.e., community kitchens.
The Council has an asset review coming up which could identify underutilised community buildings on estates. This will present an opportunity to leverage these assets but with the caveat they will need additional resources to refit premises.
The officer pointed out that Planning would still need to leverage offices because in Shoreditch tower blocks will still be build and a percentage would still be required as affordable office workspace.
The officer pointed out that the comment about community kitchens is an assumption because it is untested. There is some data and anecdotal evidence, but it is untested.
(v) Members referred to the Hackney fashion walk, Olympic Park and other big projects in the past. Members queried if the council had reviewed these projects for learning to ensure other similar projects are better moving forward.
(vi) Members commented they wanted to understand the benefits of which approach was better the logic or theory of change model. Members noted the logic model allowed for development as the piece of work progressed.
(vii) Members referred to the template in the presentation and pointed out it did not indicate which model it was based on. However, it appeared to be a mixture of both. Members asked how the Council was developing this approach across the organisation?
In response the Economic Development Manager from LBH replied, he is working in collaboration with the Head of Policy and Strategic Delivery and with consultants. The idea being to provide the top 2nd and 3rd tiers of management with some orientation sessions on the theory of change approach. The officer could not confirm if there will be Member orientation sessions too.
The officer highlighted the council is exploring moving towards the logic model. This would be a joined-up approach linked to the delivery of the Council’s Strategic Plan (that is the service plan on a page, dashboards) with the measures linked back to the theory of change / logic model. They are commencing the journey with the objective of taking everyone with them.
In relation to the Olympic Park, there is a Borough Growth Partnership (the remaining Olympic boroughs and LLDC). This is winding down and the planning powers for development activity will be hand back to boroughs. The Boroughs will start to take the lead more and the Economic Development Manager is part of the Inclusive Economy subgroup. It was pointed out that external consultants have done some work on the metrics and the measures. These measures will be available in the next couple of months. The Inclusive Economy Groups will look at how they will collaborate on the patch around the Olympic Park for inclusive economy outcomes. They have agreed the focus will be on where they can achieve more as four boroughs together versus individual boroughs to avoid duplication. The IGP is a partner in those metrics. There will be some elements about the Olympics.
In relation to the fashion hub the Economic Development Manager was unable to comment because he had no background information about the original intent for this project and it predates the current head of service. The officer was not aware of any planned assessment. However, they have successfully secured a levelling up bid. The plans for the new development at Hackney Central will have measures embedded in it. PRD Consultancy have done the work to support the Hackney Central Plan. The Council has delivery capability courtesy of the levelling up funding. The next steps will contain a smarter approach.
(viii) Members commented that some of the learning from previous projects indicated growth as the measure of success, but this was distinct from economic development as illustrated in the slides. This may have contributed to the limitation in terms of long-term success across the borough.
In response the Economic Development Manager from LBH replied in his previous role outside of the council there were assumptions about the potential success of the fashion hub.
(ix) Member raised concern about the Council bringing in consultants to run orientation sessions on the theory of change. Members commented their assumptions would be that junior project programme managers would understand the theory of change and creating logic models. Members expressed concern about staff not having these competencies when the council is embarking on this journey.
(x) Members referred to the proposed template in the presentation and welcomed the work to get buy in to the logic model. The Member commented that although this might not be common practice within councils it was a pattern of thinking that most organisations use to understand processes and outcomes.
In response the Economic Development Manager from LBH clarified most across the council would know about the theory of change and logic models. However, there can be slightly different interpretations and language used in addition to the weight given to inputs and outputs. Therefore, it was good to do the exercise as a refresher and develop a Hackney common language. The rationale for using external support is related to developing consistency. The officer also pointed out that if the Head of Policy and Strategic Delivery’s team focused on this, they would only do this and this would have an impact on the other areas of their responsibility. Deploying consultants brings consistency.
(xi) Members referred to the Institute of Global Prosperity index which was 2018 (predating the pandemic and halfway through Brexit.) and to Hackney Wick being one of their research areas. Members asked about learning from the pilot for Hackney and if there was a changed index to reflect the change in circumstances since 2018.
In response the Economic Development Manager from LBH advised he did not have detailed knowledge of the pilot in Hackney, but he was aware that this information helped to inform the creation of the index. The officer informed this was community researcher based and thus quite resource intensive. The officer explained the insight is quantitative talking about the challenges and issues but not in a qualitative way. The important point is the research was conducted via trusted agents rather than a market research company. However, this type of research could be challenging to replicate.
In terms of what is measured and whether it needs to change. The officer highlighted the insight revealed people put more weight on their own health and wellbeing than pounds in pockets. The research showed people would trade some economic comforts for health comforts (although subject to the individual). The officer advised the measure is sound, but the baseline might be different for pre and post covid. However, it did show a shift towards health and wellbeing.
(xii) Members queried if the Council is learning from the changing circumstances or is the measure pretty robust i.e. the baseline has changed because people have understood better and defined their health and wellbeing as more important.
In response the Economic Development Manager from LBH confirmed the index is being refined and they will receive an updated index. But the work with the Borough’s Growth Partnership on inclusive economy has a set of draft measures that can be used in the East London context.
(xiii) Members referred to how locality specific the Institute of Global Prosperity Index was and queried if it was designed specifically for East London.
In response the Economic Development Manager from LBH confirmed it was based on the experiences of East London, so it was more relevant to East London. Although it had a Hackney pilot (which is pertinent to us) it may not be relevant to every area in Hackney. The officer commented this could be reviewed in depth at another scrutiny commission meeting to explore the East London economic dynamic.
The officer pointed out that the economy in London does not operate on a borough level. It can be either hyper local or based on a few businesses co located for mutual benefit which might have a community aspect. For example, in Shoreditch you have the office towers and the hospitality sector. However, the sub regional corridors interact with different sectors; then you have London followed by global economy.
(xiv) Members referred to the economy working in different ways, different levels and the measurements. Referencing affordable workspace Members asked if the measures would be borough wide or locally specific to the different projects. Therefore, would the measure be about how successful this was in certain spaces or boroughwide.
In response the Economic Development Manager from LBH explained that currently their measurements are collected through the planning system’s Section 106 agreements. These are signed per property. When they have developments in other areas, they can look at them as well.
The officer proposed that in the future for the council might choose to measure workspace by the typologies or geography. However, if the council is trying to do something specific for an area that would be more intentional with the measures specific to the locality.
(xv) Members commented to be intentional they would need to have clear assumptions. Members pointed out that now they have an Inclusive Economy Strategy they will need to be sophisticated in the way they develop and support specific types of workspaces. Members asked when and how this insight will be articulated for the inclusive economy growth plan. Members also asked about the current gaps in the Council’s metrics.
In response the Economic Development Manager from LBH explained if they switch from the office style affordable workspace the planning system will not deliver because most of the developments in Shoreditch is office buildings. This type of property would not be suitable for a community kitchen because the community that would use it is not in that locality.
Referring to the planning levers and the council’s commercial properties. The officer advised he has been in dialogue with colleagues in property services about the next review cycle. This will be linked to the expiration of leases in 2027. In the interim there are limited to what they can do until 2027. At this point the economic development team and property service will work together.
The officer pointed out this will affect voluntary sector organisations that engage with properties services. The officer also pointed out that they should not forget that Property Services need to generate an income from the council’s commercial assets. Being mindful that the VCS are on submarket leases and re likely to be in properties at the cheaper end of the market. Therefore, there is a small proportion in the middle that could be used to subsidized workspace for affordable provision.
The whole mix will need to be considered if they are going to maximise the middle more. The officer advised discussions would start in the 2024/2025 financial year followed by an engagement and consultation process.
In relation to the underutilised community spaces and community halls on estates this is subject to an ongoing reviewed. This review will scope out the need. The officer reiterated that to provide spaces like a community kitchen, would require capital investment to make the changes. Therefore, the council would need to seek out opportunities for capital funding. This work would require 6-12 months to materialise and would be an ongoing process over time.
(xvi) Members asked about current gaps in the Council’s metrics noting the strategy has a lot of ambition, but it was not clear what success would look like?
In response the Economic Development Manager from LBH advised part of the challenge for his team is to define what the economy development plan will deliver to materialise the inclusive economy ambitions. The officer agreed with the sentiment of the Inclusive Economy Strategy but pointed out it had no delivery mechanism, and this needed to be defined. This was likely to have a structure to the Council’s Climate Action Plan. Clarifying the challenges and priorities then creating the measures.
The officer explained the economic development plan would have an action (for example to review the property portfolio within a specific timescale). The action in the plan may not deliver an outcome but is an enabling activity for the potential delivery of the outcome in the future.
(xvii) Members asked what role consultations will have in the metrics and if there was a relationship? Members also asked if they would feed into the final metric or plan?
In response the Economic Development Manager from LBH replied this depended on the type of consultation.
The officer pointed out that the council is doing a business survey that has a large-scale random sample. They have received approximately 1200 responses. This survey could reveal some challenges that businesses are referring which could inform the priorities if it is a lever. This would then feed through to a metric. Alternatively, if the question being asked related to the consultation being a metric i.e., having a certain percentage of businesses being satisfied with Hackney Council as a place maker or providing leadership. This is possible too. The officer informed some local authorities have that type of measure and this can take you down the path of increasing the numbers of business engagement events to aimed at businesses feeling comfortable, engaged, and heard.
The challenge back from the officer in relation to using this type of metric is the purpose and intention of the activity. The officer pointed out there needed to be clarity about the intention of the business engagement.
(xviii) Members commented at times business and residents were of the view the consultation questions were skewed towards the desired answer. Members asked how many of the consultation have open questions for free text and qualitative data.
In response the Economic Development Manager from LBH explained he would draw a line between consultation and engagement because he sees them as quite separate and different.
The Chair suggested they obtain written responses to their question on developing an evaluation framework for area regeneration activity and if there is best practice and learning the council can draw on.
Supporting documents:
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Item 4 - Coversheet-Economic Development Metrics Update, item 4.
PDF 102 KB -
Item 4a Economic Development - approach to measurement - SEG 08Mar23 (1), item 4.
PDF 996 KB