Growth evangelists note that the laws of physics don’t negotiate, nor does the rising Energy Cost of Energy.  As we navigate a shrinking economy, it’s time to admit that the “growth” party is over—someone just forgot to turn off the music.

The English Devolution White Paper outlines a framework for empowering strategic authorities, driving investment, and fostering regional economic growth.

However, its growth-oriented assumptions must be reconsidered in a shrinking economy driven by declining surplus energy, as described by Dr Tim Morgan.

A shrinking economy does not result from political failure but from the natural evolution of economic systems reliant on energy.

Rising Energy Costs of Energy (ECoE) reduce the net energy available for activities beyond energy extraction, shrinking discretionary sectors and reclassifying certain “essentials” as discretionary.

In this scenario, grassroots-based localism emerges as a vital partner to strategic governance, facilitating transitions, absorbing displaced workers, and ensuring resilience through decentralised, community-driven systems.

Understanding the Shrinking Economy

Declining Surplus Energy:

• Economic growth is historically depended on surplus energy. As accessible energy sources deplete, ECoE rises, reducing the energy available for discretionary activities.  This is the case now and will be in the future, eventually leading to the virtual disappearance of discretionary activities, as happened in the 1940s and ’50s.

This energy-driven contraction creates a patchwork economy with localised growth in certain areas and decline in others.

Localised Growth Amidst Decline:

• Within a shrinking economy, localities with access to renewable energy, fertile land, or unique resources may experience relative growth. Other areas face stagnation or decline, necessitating strategic interventions to manage these disparities.

Reframing the White Paper for a Shrinking Economy

The White Paper’s vision of regional economic growth must evolve to align with the realities of economic contraction:

Strategic Role of Authorities:

• Authorities should prioritise managing transitions rather than driving blanket growth. This includes facilitating population movements from declining to growing areas, echoing historical examples such as Welsh quarrymen migrating to coal mining regions in the 20^th
• Strategic governance must optimise limited energy resources to sustain essential services while supporting localised resilience.

Localised Economic Development:

• Growth-oriented strategies must be targeted, supporting sectors that enhance energy efficiency and sustainability. This includes renewable energy, low-energy transport systems, and sustainable housing.
• Investments should align with the unique strengths of growth areas, avoiding areas with limited prospects.

Balancing Growth and Decline:

• Authorities must repurpose declining areas for sustainable uses, such as rewilding, localised food systems, or renewable energy projects while fostering development in areas with growth potential.

The Role of Localism in a Shrinking Economy

Localism is essential in complementing the strategic focus of the White Paper, providing adaptability and resilience at the community level:

Facilitating Transitions Between Areas:

• displaced populations, offering flexible housing, employment, and social structures.
• Growth regions, guided by localist principles, can quickly adapt to population Grassroots-based localist systems enable communities to absorb and integrate inflows through community-led initiatives.

Absorbing Displaced Workers:

As discretionary sectors contract, localism provides displaced workers with opportunities in essential, labour-intensive activities such as:

• Local food production.
• Decentralised renewable energy systems.
• Community healthcare and education.

Building Community Resilience:

• Localism emphasises small-scale, decentralised systems that reduce dependence on centralised infrastructure, ensuring communities adapt to resource shortages and economic disruptions.

Decentralised Decision-Making:

• Empowering local communities to decide resource allocation, infrastructure, and economic activities ensures tailored responses to regional policies, fostering efficiency and innovation.

Coexistence of the Essential and Localist Economies

In a shrinking economy, the top-down essential and localist economies coexist, each playing a critical role:

The Top-Down Essential Economy:

• As the White Paper outlines, strategic authorities manage large-scale systems, including national energy grids, transport networks, and healthcare services.
• They ensure the equitable allocation of resources and support migration between areas.

The Localist Economy:

• Localism operates at the grassroots level, addressing immediate community needs through decentralised, adaptable systems.
• It enables redundancy in the essential economy, enabling communities to function independently during systemic disruptions.

Synergy Between Systems:

• The essential economy supplies foundational infrastructure, while the localist economy reduces pressure on centralised systems by fostering self-sufficiency and resilience.

Strategic Changes and Recommendations

Reframe Growth-Oriented Policies:

• The White Paper should recognise the reality of a shrinking economy, emphasising localised growth within a broader context of contraction.

Support Migration and Transition:

• Strategic authorities must invest in infrastructure and policies that facilitate population movements, ensuring both growth and decline regions are supported equitably.

Integrate Localism:

• Decentralise decision-making and fund community-led initiatives to empower localism. This will allow more expansive areas to adapt to their unique circumstances effectively.

Invest in Energy Resilience:

• Prioritise investments in low-ECoE technologies and sustainable infrastructure to ensure the viability of both essential and localist economies.

Conclusion

The English Devolution White Paper provides a framework for regional empowerment but must adapt to the realities of a shrinking economy driven by declining surplus energy.  By integrating localism into this framework, governance can balance the dual needs of managing large-scale essential systems and fostering community-driven resilience.  Together, these approaches ensure a smoother transition to an energy-constrained future, where strategic oversight and local adaptability play crucial roles.