European cities today are more diverse than ever before. Immigration, socio-economic inequalities, spatial segregation and a diversity of identities and lifestyles are all contributing factors. The challenges faced by urban policy-makers and city-planners to meet the needs of Europe’s increasingly diverse population are numerous and complex. To learn more about these challenges, and the lessons that can be learned from the English experience, PLAN has interviewed the British geographer Mike Raco. He is a professor at The Bartlett School of Planning/UCL in London, and is currently involved in a research project on how to govern urban diversity, financed by the European Commission. Later this autumn he will hold a lecture on a similar subject at Norsk Planmøte 2014 (Lillestrøm 20.–21. oktober, Norsk BOBY).

Professor Raco: Can you first briefly tell us about your research background and your professional interests.

I have a background as a political geographer and urban planner. I have been working in universities across the UK since 1997 and have published a range of books and articles on sustainable cities, urban politics, and the governance of economic development. I took up the position of Professor of Urban Governance and Development in the Bartlett School of Planning, University College London, in August 2011.

You are currently involved in an EU-funded research project entitled «DIVERCITIES – governing urban diversity». What is DIVERCITIES about, and what is your role in the project?

DIVERCITIES is a comparative 4-year, 6.5million Euro EU Framework 7 project that is examining the governance of urban diversity in 14 cities. I am one of the project leaders and I am also heading up a research team in the Bartlett School of Planning that is undertaking research in London, the EU’s most diverse city.

It’s easy to agree that our cities are indeed very diverse. But more specifically: What do you mean by «urban diversity», what is it based on? And what is «hyper-diversity», which is a term that I understand you use quite often in the project?

In our project we argue that in recent decades cities have become more economically, socially, and culturally diverse than ever before. We call this hyper-diversity in an attempt to understand the influence of norms, dynamics, activities and lifestyles of people in contemporary cities. We argue that policy-makers are faced with new opportunities but also new challenges. They are required to use existing tools and administrative scales to develop policies that will be effective for increasingly hyper-diverse groups, who possess widely varying needs and outlooks. If handled correctly, policy can encourage enhanced competitiveness, increase social cohesion, bring new cultural vibrancy to places, and help cities to gain from the benefits offered by globalisation. At the same time there are new risks associated with social exclusion, urban disorder, and competition amongst groups for scarce resources.

According to the DIVERCITIES’ homepage, the central hypothesis of the project is that urban diversity – socio-economic, socio-demographic, ethnic and cultural diversity – is an asset. It can inspire creativity and innovation and create cities that are more liveable and harmonious. And it can positively affect social cohesion, social mobility and economic performance. It’s almost like hearing Richard Florida talk about the values of «the creative class» in the urban economy. Could you elaborate on this «instrumental» value or role of diversity in our cities?

Professor Mike Raco. (Photo: DIVERCITIES)

What we are arguing is that some of the economic strengths associated with diversity are sometimes downplayed by policy-makers who increasingly focus on the negatives. We take our lead from writers, such as Professor Stephen Syrett, who has talked about a ‘diversity dividend’ in cities in which the presence of diverse communities opens up opportunities for businesses, both in terms of the skills and networks. There is other evidence that entrepreneurialism flourishes in diverse neighbourhoods, so our research will try to uncover some of these relationships. In the first stage of our work we have demonstrated that some of the most positive narratives on diversity and the openness of cities come from intriguing alliances of business groups and trade unionists.

Is diversity really as unequivocally positive or nonconflictual as DIVERCITIES seems to claim? Surely, there must also be negative aspects of urban diversity in European cities? Take for instance the growing income gap in our populations, which exclude low-income groups from large parts of the urban housing market, and foster segregation, gentrification and the development of so-called parallel communities.

We certainly would not argue that diversity is unequivocally positive. One of our objectives is to deconstruct the term itself and look at how policy-makers and others give it different meanings. What you find is that in some cases diversity is promoted in contradictory ways. For example, in London, it is often put forward as a justification for policy interventions. Areas of ‘poverty’ are seen as not being diverse enough and in need of ‘redevelopment’. Diversity can be used to justify gentrification programmes that bring in high income groups but reduce social mix by removing and decanting poorer communities. In other places the term is used to deflect attention away from more challenging and difficult problems such as racial discrimination and wider structural inequalities. So it is not unequivocally positive. However, the purpose of our research is to try to shed light on what types of local action are working positively and what can be learnt from such experiences. Given some of the wider economic and social tensions across contemporary Europe, we argue that there is a real urgency in developing these wider understandings. Much of what makes European cities vibrant and dynamic places in which to live is their diversity.

In recent decades cities have become more economically, socially and culturally diverse than ever before. Policy-makers are faced with new opportunities but also new challenges. This East London Street Art reflect the increasing urban diversity. (Photo: CIDA)

One of the core objectives of DIVERCITIES is to make an assessment of urban policies in the 14 cities that participate in the project. Is it possible to tell something preliminary about how these cities are governed, how urban policy agendas differ, and how policy-makers and other actors (eg. businesses, politicians, civil society associations) think about diversity?

We argue that across the EU we see at least 5 core trends emerging: (i) A shift from multiculturalism to assimilation and integration in which national governments are increasingly hostile to the presence of ‘too much’ diversity. There is a growing tendency towards neo-assimilationism and a focus of the threats associated with diversity; (ii) an increasing divergence between national and urban policy agendas with regard to diversity. In many cosmopolitan cities we see a counter-tendency emerging with the rise of more pragmatic and positive approaches; (iii) an agenda of individual responsibility and equality of opportunity in which the policy focus has moved to individuals and away from the idea that collective classes or groups exist; (iv) the continued importance of Area-based Interventions and Mixed Communities Policies in cities, despite evidence that developments are becoming increasingly gentrified in nature; and (v) the growing impacts of austerity in which budgets are being reduced for urban programmes across the board and the nature of labour markets are changing.

You have (in the «New Labour»-project) described the instrumentalisation of communities as primarily a vehicle for the promotion of instrumental or governmental efficiency. This discussion of different types of communities seem to be important for how to plan and for whom: local interests, global interests, political efficiency or efficiency and predictability for the private developers. But what exactly do you mean by this?

What I argued was that programmes that appear to be about community empowerment often use communities to further the ends of state policies and therefore represent an extension of state power and influence. Communities often become the subjects and objects of policy simultaneously. In other words their ‘improvement’ is put forward as the object of a policy intervention (for example to create healthier or more employable communities) at the same time as it becomes the responsibility of members of that community to implement policy and bring about change. Since the early 1980s public policy has become more focused on this responsiblisation agenda, with the assumption that the responsibility for policy success and failure always lies with communities and individuals. Broader structural processes of social and economic change are dismissed as contextual factors that no longer carry the same degree of influence that they had in the past.

Do you see a need for new policies, instruments or governance arrangements, for instance more tailored arrangements that have an eye for the increasing diversity of the urban population?

This is a fundamental argument and one that we are looking at directly through the DIVERCITIES project. In some European countries, notably France, a republican tradition dominates. This treats all citizens as equals and rejects notions of difference. In other counties, such as England, differences between the needs of different communities are built into policy programmes. There are clear strengths and weaknesses associated with both approaches.

What can be unifying arrangements in diverse urban societies? Are there any common or universal interests that extend across the whole of society?

Many of the issues affecting individuals in cities today relate to how the labour market and economy function, rather than through softer forms of engagement such as communication and deliberation, important as these are. In many instances it is the breakdown of professions, occupations, and reductions in the prospects for social mobility that are having a more divisive effect on social ‘cohesion’ than a failure to create shared identity.

The American philosopher, Iris Marion Young, sustains that «the ideal of community fails to offer an appropriate alternative vision of a democratic polity.» The ideal of community exemplifies the logic of identity. This ideal expresses a desire for the fusion of subjects with one another which in practice operates to exclude those with whom the group does not identify. With multicultural ideology, does not the ideal of community as shared final ends and mutual identification become absurd in the context of European cities?

This strikes me as a little too simplistic and is focused on the specifics of the American context. Individuals hold multiple identities simultaneously. Public policy is only one part of this identity formation. Values are inculcated in a multiplicity of ways. The key question for public policy is how to link forms of identity, if at all, to the allocation of resources and funding.

Last year you wrote a book called State-led Privatisation and the Demise of the Democratic State (Ashgate Publishing). The book-title sounds quite ominous, and somewhat in conflict with the more optimistic perspectives of DIVERCITIES. Why do you take such a pessimistic view on our democratic future?

I am not sure that I take a pessimistic view, although I see how this could be inferred from the title. My book is focussed on the creeping privatisation of planning and governance arrangements in the UK during the 1990s and 2000s. Whilst there has been a lot of work on the tendering out of public services to private companies, I felt that there was much less known about the privileged position of major corporations in shaping governance arrangements and in taking control over the delivery and ownership of traditional state assets. My particular focus has been on Private Finance Initiatives (PFIs) in which private companies Design, Finance, Build, and Operate public infrastructure then ‘rent’ it back to public agencies for periods of 20–30 years. I looked at why these are appealing to public bodies and for private companies. For the former they enable governments to have infrastructure provided in the short term but leave the payments to future generations (despite the ubiquitous rhetoric of sustainability planning and the importance of protecting the interests of future generations). For the latter they open up lucrative opportunities for state-backed, low-risk, and high return investments. Indeed some commentators argue that there is a growing recognition on the part of major corporations and global hedge funds that the financing of welfare state infrastructure and services represents one of the world’s biggest business opportunities. Markets for such investment are expanding rapidly as governments embark on modernisation and privatisation programmes. Such reforms are also lubricated by under-researched global accountancy and management consultants.

In the UK the repayment liabilities on PFI contracts now total over £300 billion and cover a full range of public infrastructure including new road projects, including bridges, hospitals, public housing, prisons, and even local street lights. Moreover, they represent a model of partnership that is being promoted across the world by organisations such as the EU, the World Bank, and other development bodies.

My point in the book is that the mushrooming of PFIs is symptomatic of a wider set of changes in how planning and politics are being conducted in cities. At the same time as there is now a wider rhetoric of community empowerment and localism in countries such as England, the reality for many neighbourhoods is that public assets are becoming increasingly owned and managed by private companies and financial institutions who are anything but local. Moreover, the long term nature of these contracts, whilst it suits private investors and governments, undermines the flexibility of public agencies to respond to changing demands, both technical and political. And yet much of this has been rolled-out with relatively little public debate.

Could you be a bit more specific in your account of why and how this privatisation takes place?

It is partly because of the growing power of multinational organisations and trade agreements. I would suggest to your readers that if they have not read about the current free-trade negotiations between the EU and the United States on the Transatlantic Trade and Investment Partnership (TTIP), then they ought to because this captures much of what I am trying to argue is taking place through my book. The impacts of this agreement on democratic processes, and the right of governments to use public policy to shape their societies and economies, are potentially enormous.

However, these trends are also the outcome of a shift in policy thinking in which governments of all persuasions focus more attention on making sure that there are visible, tangible outcomes to state spending. Some writers refer to this as a form of output-centred legitimacy in that what matters is what works. So if governments provide new infrastructure and investment, then they are perceived to have ‘delivered’ on their promises, even if it is funded and/or operated by private companies. This type of delivery or output-focussed government has taken centre stage in countries such as the UK.

Will public-spending decrease when the state is running fewer things than before?

There are two aspects to this question that I would like to address. First, the irony of such programmes is that they are hugely expensive. Private finance is almost always more expensive that public finance. However, as noted above, the attraction of private finance is that is does not technically count as official government borrowing. Even though it often makes projects more expensive and adds cost, in terms of legal and accountancy fees, privatisation projects are still attractive to austerity-driven governments. I would ask readers to look at the work of writers such as Allyson Pollock at Queen Mary, University of London if they wish for further insights on this.

Second, the growth of these new forms of privatisation raises some interesting questions about neo-liberalism and what private sector companies want states to do. We are often told that businesses want less state spending, fewer regulations, and a freeing up of market conditions. However, my research has shown that some companies want more state activity. Every time a new privatisation is announced it creates lucrative business opportunities. Firms provide ‘advice’, arrange and organise bids for services, write contracts, create complex accountancy arrangements, and become involved in the longer term monitoring and regulation of the newly-privatised service. The more complex the regulatory environment in which privatisations take place, the greater the business opportunities for the providers of those services. A new sector has emerged of successful ‘service-delivery’ and advisory companies who have become enormously successful, yet rely almost entirely on state spending. In fact, it could be argued that governments should adopt new types of industrial policy and actively help ‘their’ multinational companies to go around the world and ‘capture’ public contracts in other countries. In the UK, French and German firms have been particularly effective at doing just this. With countries in the Global South now looking to improve their own public infrastructure along western lines, the opportunities for western companies are enormous. So what I am trying to argue is that the relationships between privatisation, businesses, and governments are more complex and nuanced that might be understood by simple articulations of de-regulation and neo-liberalism.

I understand that the rise of privatisation is changing the character of decision-making in European cities. We can see the same trend toward public-private partnerships and privatisation of public services here in Norway and in our large cities, although on a more limited scale and affecting fewer sectors perhaps than in England and London. In what way will privatisation limit our ability to participate as citizens in the democratic process?

These changes have two implications. First, where ownership of local assets has become increasingly internationalised it has, consequently, become more remote from local control. It is difficult to argue that politics is becoming more ‘local’ in a context where even the street lights in some local authority areas in England are now ‘owned’ by private agencies. Second, the nature of citizen protest is changing. Individuals and communities are having to use legal avenues to try to challenge public service agreements – at the same time as austerity cutbacks have increased the cost of access to the law. Some political scientists call this a ‘judicialisation’ of public policy in which politics is increasingly conducted through the decisions made by judges. Public demands, therefore, have to be converted into precise technical arguments and engage with broader questions over how contracts should operate, whose liabilities are included/excluded from contractual arrangements, and whose accountants and lawyers can provide the most robust arguments. This is not to say that community and citizen action is being stifled or can no longer be found. The UK is a vibrant democracy. It is just that the options for meaningful engagement are becoming increasingly streamlined.

When private companies are taking on more and more of state and local government’s traditional roles, it will necessarily have decisive influence on how we can plan our cities. The private sector is gaining strategic planning control over key technical and welfare infrastructure, as you have pointed out, and a new plurality of development actors – consultants, lawyers, advisers, etc – are replacing the planners. What then?

It makes strategic planning increasingly difficult. The logic of privatisation is that public services should be split-up, compartmentalised, and converted into deliverable units (e.g. building a new hospital or prison). Worse still, these projects are ‘locked-in’ through long-term contracts in order to provide adequate returns to private investors and reduce the ‘risks’ associated with long-term investment. The notion of systematic planning becomes difficult in such a context. New contractual rigidities become built-into the day to day operation of the public sector making it increasingly difficult to adapt planning arrangements in the case of change. London, for example, has had an unexpected increase of 1 million people (or 14 %) in its population 2001–2011. Yet many of its public services and assets are locked into contracts with private operators that failed to predict the scale of likely increases in demand.

You have presented a rather critical view of the state-led privatisation in England, and its consequences for the democratic city. What should, in your opinion, be done to reverse or remedy this process? More government? Less governance?

The first thing to do is to increase awareness of the processes that are taking place. Many of them remain relatively hidden from the public sphere of discussion. They should be brought back into the public arena and converted into issues for debate. Second, there needs to be a recognition that asset-ownership and flexibility of use is the key to effective planning. There should be no ideological aversion to public/community ownership and a public interest as and where necessary. Third, there should be a focus on accountability with less state and more government. Democratic governance is premised on the principle that public bodies should be able to change the direction of policy. The move towards privatization seeks to insulate private practices from the ‘threat’ of policy reversal or change.

This year we Norwegians are celebrating the 200 years anniversary of our constitution and our democracy. Your advise on how we can plan for more democratic urban processes would therefore be interesting. Would you recommend the English approach? Or will Norway best be served by not following the English example?

The English approach shows that one should not be too quick to undermine the legitimacy of public intervention and believe the narratives of private experts and consultants. It also shows that maintaining political debate and dialogue matters. Part of the problem in England has been the shift towards a ‘consensus’ politics in which a new mode of delivery-based, expert-led pragmatism holds centre sway. This precludes political arguments as they are seen to get in the way of the ‘core business’ of government – namely to get things done. There is an aversion to making debates over public policy and planning ‘too political’, as though it is possible to take the politics out of decision-making. Such approaches should be resisted. There should continue to be a focus on the importance of inputs into decision-making processes, as well as their outputs. Some of the best examples of this in England are where elected local authorities have managed to pool their resources to try and limit the impacts of reform. The example of Manchester comes to mind in which neighbouring authorities have sought to work closely together to promote a collective public interest. In the fields of urban development and urban planning this is a particularly challenging task given the power of private investors in England and the constraints of working in a delivery-focussed planning system.