The issues surrounding youth crime

Who is best qualified to tackle this problem?

 

We all love the idea of local solutions when it comes to dealing with crime. The left love it: only this weekend the increasingly admirable Stella Creasy’s Mayoral Youth Crime Pledge got an excited response from community leaders. The right love it: this morning Nick Herbert performed a volte-face of relatively shocking proportions – or more likely felt now was the time to announce what he’d been thinking all along – writing an immaculately-balanced and impressively vague piece in the Guardian on the need for “programmes that are locally delivered, free from central micro-management, and specifically targeted.” Rather verbiose from the same man who has never before had much to say on the management of crime other than that it needs to be “cut”.
 
This morning I was in a youth centre talking to one of its workers – a lovely lady who’s lived in the area for over twenty years – when one of the kids started to kick up hell. There were two blokes there trying to calm him down, but he wasn’t listening to them. So she got up, walked over to him, and had a few quiet words. He sat down and started to do some work. I switched my recorder off and asked her to tell me his story.
 
He’s been kicked out of school because he’s a naughty boy. He has a girlfriend who keeps him in check, but he lives on an estate where kids are at war (described in the press as a gang feud – the reality, as so often, is far less exciting), so he keeps getting into fights. She began to find out some stuff about his family – she was able to, because she knows everyone who lives nearby – and realised that his dad was one of the biggest dealers in the local area. After spending a lot of time with the boy, he revealed that most nights he would beat him. That’s why he’s not scared of stern words from the guys in the community centre. So our youth worker talks to the mum about it – mother to mother. And the mother puts faith in her, and the child begins to trust her, and now she sees him at weekends, and sees him in the street, and even (bad practice, this) at home sometimes.
 
On the whole it’s working. He’s looking set to get ‘A’s and ‘B’s in his GCSEs. That’s what grassroots work does: it converts next week’s murderers – or victims – into this week’s respectable citizens.
 
Now the key thing about this work is that it’s usually this effective when the voluntary sector does it – because it requires a (horrendous phrase) holistic approach. And this is what Nick Herbert’s really complaining about in his Guardian piece – the drug outreach workers and youth offending services and all the other professionals that are employed by town halls all do good work, but there is a box ticking culture that addresses problems rather than people and that usually restricts them.
 
He says Labour invested too much faith in the state. He’s probably right – I remember voluntary workers complaining to me back in 2008 about the fact that they were operating at the beck and call of professionals in suits who would try to engage with people involved in crime, find that they lacked the credibility, and then call for help because they were getting nowhere and frankly weren’t prepared to work on this stuff after 5pm. But to a large extent it depended on the councils – some seemed to have a great bead on how to deploy the voluntary sector, others just chucked money at crime and hoped it went away.
 
There’s plenty of work for state and voluntary sectors. The problem is organising it effectively; it’s a muddle at a national level. Whose job are gangs? The answer is everyone’s: the Home Office (policing), CLG (town halls), DWP (who now appear to be taking the lead), Education, Health and probably several more. This shared responsibility is mirrored at a local level. And Labour tried to establish some kind of organisation through the Crime Reduction Programme, which flopped due to a lack of funding and lethargy among local partners who didn’t want to spend all their time recording data to justify their work to everyone else.
 
The biggest damage it caused was at a sentimental level – police and local authorities work together without central funding through MAPPAs and Community Safety Partnerships, but there is a diminished appetite. Boring things like information protocols – I’m a probation worker who knows about X, should I tell this boy’s school/doctor/housing authority about it – are an obstacle. Likewise, there’s a fear of buck passing which makes budget sharing difficult – e.g. this boy isn’t a youth offender, he’s disturbed, so mental health services can deal with him. The elected Police Commissioners are Herbert’s answer to these difficulties. The pros and cons of this scheme are another article entirely – but as this little survey shows, the issues run rather too deep for the policy to solve on its own.
Photo: Getty Images

Alan White's work has appeared in the Observer, Times, Private Eye, The National and the TLS. As John Heale, he is the author of One Blood: Inside Britain's Gang Culture.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation