Government spending in response to Covid-19 stands at well over £300 billion in the UK, and over £10 trillion globally. How this money is spent will shape the future of the economy and the environment for decades to come.
Professor Diane Coyle, Dr Matthew Agarwala and Dimitri Zenghelis, Bennett Institute for Public Policy, discuss the key findings of their new Wealth Economy report: Building Forward: investing in a resilient recovery.
- Building forward: Investing public funds - in people’s health and skills, and in social, natural, and physical capital - is the best way to bring about a more resilient and prosperous future, and to deliver the ‘levelling up’ agenda.
- Place, inequality and assets: Geographical inequalities, such as access to education, employment and nature such as urban green space and clean air, affect society’s overall potential and productivity.
- Public debt, public wealth and fiscal and structural sustainability: Investment in human, social and natural capital across the country is the best way to restore prosperity and ensure fiscal health after the pandemic. A temporary rise in the government debt/GDP ratio should not prevent investment. In periods of high uncertainty, low confidence, and unemployed economic resources, public investments in the natural environment and local community programmes offer attractive economic returns.
- Case studies: Countries, from Scotland to New Zealand, are pioneering the wealth approach, and it sets out concrete actions – in education, infrastructure, fiscal policy, and the Treasury’s Green Book guidance – that the UK could take to Build Forward.
- Putting the wealth approach into practice: Gaps in economic measurement have contributed to the chronic under-investment in assets such as natural and social capital. This makes them invisible in policy choices. Investment is needed in data gathering and statistics to provide timely information about the stock and performance of all the components of wealth and be considered in decision and policy making.