The Government's plans to level up the UK economy pose a problem for the metro mayor manifestos argues Andy Westwood.
Yesterday’s Budget, the first delivered by Rishi Sunak and the first of Boris Johnson’s premiership, was a significant one. Despite being blown off course by the Coronavirus outbreak, it still set out the key themes and ambitions of the new Prime Minister and Chancellor.
’Getting Brexit Done’ might have been the dominant theme in December’s General Election but ‘levelling up’ the economy across all parts of the UK has quickly become the most important domestic challenge for the new Conservative Government.
Regional inequality in the UK is a long-standing, deeply entrenched and growing policy problem. The gaps between the best and worst performing regions are amongst the largest in both Europe and the OECD. These differences in productivity, wages and living standards, have been an important driver of political dissatisfaction, influencing voting patterns in both the 2016 Referendum and the 2019 Election.
A Devolution White Paper is imminent. Robert Jenrick, Communities and Local Government Secretary, and Sunak’s predecessor, Sajid Javid, had both promised one before and during the election campaign. A West Yorkshire devolution deal has also now been announced and a city region mayor will be elected in May 2021 – a year after the first wave of ‘metro mayors’ fight their second elections. All will be thinking hard about how the Government’s ambitions tally with and affect their own and how they can best respond to that in their respective campaigns. This will be far from straightforward.
At first sight, as we enter the mayoral election campaigns, it might appear that Government and city mayors will share both the Budget’s diagnosis and focus for action and investment. Those in the Midlands and the North will support the big boosts to infrastructure, skills and R&D that underpin the Government’s ‘levelling up’ ambitions. Each Mayor, from Andy Street in the West Midlands to Andy Burnham in Greater Manchester and Ben Houchen in the Tees Valley, have all bemoaned regional and intraregional inequality and supported a similar focus on these policy areas during their mayoralties. But all would like more resources and powers over spending decisions too.
The big question facing these mayors will be how much of the promised investment will come under their control and feature in any new powers offered in the Devolution White Paper. However, in each of these areas Whitehall has kept a pretty tight grip on policy and spending and there are no obvious signs that this is about to change.
This makes writing mayoral manifestos quite tricky. Each will have ’levelling up’ challenges within their own city regions. Dudley and Wolverhampton, Oldham, Rochdale, Peterborough, Wisbech, Hartlepool, Redcar will continue to be foremost in the thinking of mayors based in Manchester, Birmingham, Cambridge and Stockton. But so too will the ‘levelling up’ of the regions as a whole compared to London and the South East. They’ve all campaigned on the importance of science and R&D. Most have prepared a Local Industrial Strategy. All have said how important skills are and all want more control over how money is spent.
The Budget offers a big increase in R&D with Government funding increasing to an annual total of £22 billion by 2024/25. £800 million will go to the new Advanced Research Projects Agency (ARPA) championed by Dominic Cummings. There is also £1.5 billion to spend on FE college buildings, alongside a consultation on how to spend the £3 billion National Skills Fund originally announced in the Conservative Manifesto. All will be shaped and finalised in the Spending Review so there is a lot to play for.
But what would you promise in a manifesto in May? That national government and its departments and agencies – from DoT and DfE to ESFA to UKRI – will sort it all out? Or would you promise to have the Government’s ear on each or any of these issues – theoretically easier for Ben Houchen and Andy Street – to local voters? Or would you promise that future devolution deals will deliver you more actual power in each or any of these commitments? Would you trust Boris and his newly centralised team across No 10, No 11 and the Cabinet Office?
There are other more prosaic challenges. Even if you felt confident that you could win more such concessions on skills or R&D, how would you describe it in your actual campaign? Industrial strategy hardly feels like a popular vote winner. Who has even heard of the ‘Strength in Places’ fund operated by UKRI? Or the 2.4 per cent R&D target. Or ARPA?
R&D spending might be vital in tackling productivity weaknesses in the regions but spending largely takes place on university campuses and they have their own sometimes tenuous or testing relationships with local communities. It is not as obvious as it might be that it will translate into better paying jobs or living standards.
Skills and apprentices are also an area that is overly rich in complexity and policy detail. There are thousands of qualifications and pathways, but funding is often opaque, entitlements and support sketchy and it tends to focus on and favour the young. It’s technocratic, very detailed and not really the stuff of straightforward doorstep conversations. Like R&D, it is hugely important but rarely seems to make a difference to the outcome of elections.
Unlike big transport projects, neither skills nor industrial policy are likely then to offer much of a political dividend. So, the challenge for Mayors will be threefold: Firstly to lobby hard for more devolved control over education and science budgets. Secondly to find ways of promising real investment in city regions’ colleges and universities even if they don’t end up in control. Lastly and perhaps most importantly, they need to find simpler, easier language to tell these stories in their manifestos. Voters may not care very much whether it is a mayor or a distant civil servant holding the purse strings as long as it delivers better jobs, higher pay, high quality training and more businesses that offer all of these things.
Professor Andy Westwood is Vice Dean for Social Responsibility at the University of Manchester
This blog is published as part of an occasional series by guest experts to provide a platform for new ideas in urban policy. While they do not always reflect our views, we consider them an important contribution to the debate.
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Andy Westwood points out that “Whitehall has kept a tight grip on policy and spending”; until this changes there will be little effect, and even then devolving powers and finance to metropolitan areas does not deal with he wider problems of the regions that they centre and serve. The government (and its predecessors) has shown that it does not really want to lose that tight grip, hence the failure to deliver the “One Yorkshire” plan proposed by 18 of the 20 Yorkshire Local Authorities that could have helped to generate a true regional solution to ‘regional inequality’ that the compromise West Yorkshire ‘deal’ will not. Genuine devolution to metro mayors and combined authorities can deliver better economic, land use and transport planning for their cities, but is does not deal with wider regional economic issues. Central government and seemingly politicians of all parties are loath to give up their ‘power’ over the 85% of the population with no true regional government. Just as the government in the 1980s was worried about the so called alternative power base of the GLC, the present government is concerned about handing any powers to a region with a larger population than Scotland.