State of Play: Smart cities in 2018 and 2022

In this article, Joe Fyans looks at the change in the state of play of smart cities in the last few years, looking towards what could be a pivotal year for the agenda

In January 2019, Localis published Smart Cities: Fair Investment for Sustainable Growth. The report was written over 2018 and examined the readiness of the UK for smart cities. Three rather eventful years after its release, this article looks at the change in the state of play since the reports publication, looking towards what could be a pivotal year for the agenda.

Our evaluation of the prospects of the smart city agenda in late 2018 was mixed. Firstly, we were told many times that the energy infrastructure in cities across the UK is simply not ready for the kind of massive growth in the use of technology required for a smart city transformation. We also found that local authorities need a more expansive set of strategic powers, particularly around forming partnerships with other local authorities and private enterprise, for the agenda to be successfully delivered. The key problem here being the awkward gaps that smart city programmes must occupy, within the governance and ownership frameworks of the built environment.

We characterised the crux of these issues as the risk of a ‘tale of two cities’ emerging in smart city locations. This is because investment, if left to the market alone, tends to follow previous investment. Without a long-term strategic vision which is informed by granular data on local inequality, there is a risk of investment into the grid being increasingly concentrated in areas where the underlying digital infrastructure for smart cities already exists. Providing the infrastructure for smart cities cannot, in other words, be left to the market alone.

Since we released the report, there has been little change in the conditions we described at the time. However, the research around smart cities has greatly expanded, with gaps in knowledge and understanding being gradually filled in. Furthermore, the current political context may be far more favourable to transformative investment than that in which our report was written.

Improvements in the thought behind smart cities
Improvements in the intellectual underpinning of smart cities since 2018 have been marked. The smart city agenda has been repeatedly criticised for reliance on fossil fuels and a general lack of consideration for the environment. Ultimately, without being mindful of sustainability and livability, smart city projects can easily begin to prioritise technological advancements for their own sake above all else and there has been increasing acknowledgement of this in the academic research on the subject. The increased awareness of the need to balance sustainability and quality of life with technological improvements is a positive result of careful evaluation and detailed appraisal of the agenda. Attempts are being made to establish technical standards which are beginning to emerge across projects and allow for comparison along these lines, a crucial aspect of transparent policy-making which was absent from the picture three years ago.

Another aspect which has come more sharply into focus is that of cybersecurity. As the prevalence of AI in daily life has risen and the Internet of Things become more ubiquitous, further thought has been dedicated to the ethical frameworks smart cities must operate in. The rapid onset of the IoT and associated rush to smart cities has outpaced developments in cybersecurity, with complex models of deep learning required for effective cyber security.

A key problem we heard of often during our original research was the difficulties incurred through local authorities and private companies entering into partnerships which did not suit the goals of either particularly well. Poorly-conceived and ineffective public-private partnership remains a problem in the implementation of the smart city agenda. In the UK’s smart cities, a trend towards corporate governance across multiple stakeholders has been observed, with external funders and investors crucial to the success of programmes. This, along with fears of ‘lock in’ via long-term and inflexible contracts, remains a problem for ensuring accountability to citizens and communities for smart city programmes.

Progress in the policy driving smart cities
Naturally, things like digitisation of public services and better use of technology in the urban realm have not been the central focus of government policy in the past couple of unprecedented years. Whilst forms of digital governance, and associated efforts from councils to reduce digital exclusion, naturally increased during the period of lockdown, the very real focus of day-to-day public safety during the pandemic pushed the wider agenda down the national priorities list. It is worth pointing out here, however, that there were already complaints of political paralysis raised by stakeholders in our 2018 research. Whilst we wrote the original report, it was a common view among stakeholders that the ongoing turmoil over Brexit was already slowing down the agenda, with Whitehall capacity sucked into the seemingly endless crises of the end of Theresa May’s premiership.

The push to ‘Build Back Better’ however, alongside the recent thrusting of the UK’s energy regulation framework into the national spotlight, could be seen as something of a political opening for smart city programmes. There is some hope for the possibility of a renewed focus on the kind of infrastructure upgrades, devolution policy and long-term strategic purview that would enable an acceleration in sustainable, livable smart cities under the policy aegis of Levelling Up and Building Back Better. The Chancellor’s pre-pandemic focus on major infrastructure spend as the key to levelling up, as well as the need to create a pipeline of training and employment in the wake of Brexit and the pandemic, could lead to the kind of long-term investment required to make the agenda work. Furthermore, the potential for a root-and-branch examination of energy regulation in the UK from generation to household has greatly increased in light of the current crisis. However, as covered later in this article, there are also major risks to the agenda arising from the energy price crisis.

What has not changed since our original report is the dramatic curtailment of the abilities and powers of local government. The devolution agenda remains in a state of constant flux, with the Local Industrial Strategies of 2017 scrapped and the future looking bleak for 2010’s Local Enterprise Partnerships, to make way for the latest new framework. As local government once again waits for a long-delayed white paper to detail its future, with rumours abound of reorganisation and various waves of strings-attached funding to be bid for, the chance of a long-term settlement under which councils could take a strategic view to the development of their place with accompanying powers of investment seems as remote as ever.

With the long-term effects of Covid on both the economy and the nation’s health still far from certain, councils have been working on plans for recovery throughout the past couple of years, many of which hinge on better utilization of technology to drive policy on the high street and in the town centre. However the capacity for local government to act in a holistic way has been, if anything, further depreciated by the strain of the pandemic. One area where local government could potentially see capacity built and restrictions removed in the coming years is procurement – a major element of smart city programmes. As our 2021 report True Value emphasised, the government’s Procurement Green Paper begins to pave the way for a change in procurement culture, where using procurement as part of a long-term placemaking vision is far easier to do.

Challenges to Smart Cities in 2022
If the smart city agenda is to come together in the 2020s, we will need a more robust national grid, with a greater proportion of the energy it distributes generated renewably. In the current climate, this could be a difficult goal to square politically. Given the huge surge in energy prices – albeit caused by the price of wholesale gas – boosting renewable energy (the cause of the recently much-maligned ‘green levies’) may not be a particularly popular idea. The mix of actors involved – Ofgem, central government, local government alongside the commercial and private consumers of energy – make taking a holistic approach difficult at the best of times, let alone in the middle of a political maelstrom over energy.

Yet there are points to rally around. Major infrastructure investment for smart cities can drive Levelling Up in multiple ways. At the front end, it can generate long-term pipelines of training and employment, uplifting local economies. In the medium term, it can provide the kind of solutions to public service provision problems which have been glimpsed through smart city pilots in the UK and across the world. In the long-term, a more robust energy grid which is less reliant on the international gas market is, it surely must be clearer now than ever before, of great importance to our national resilience. A devolution framework which allows local authorities to invest in and steward the development of smart city programmes is essential to achieving this, and the lack of one remains the most significant obstacle to the widespread realisation of smart cities in the UK. All eyes on the Levelling Up White Paper…

Joe Fyans is head of Research at Localis.