Today marks a year since the Government published its flagship Levelling Up White Paper, which itself came more than two years into this parliament. Very little has happened in the intervening 12 months. What should the current and next governments do to start delivering on the slogan?
There was much to commend about the white paper itself. From an economy perspective, it identified that the biggest challenge is the underperformance of the largest cities outside of London, and set the goal of creating an internationally competitive city in every region. It also specifically picked out skills and health as being challenges with 2030 targets attached to them.
Policy action has so far been lacking
Yet, what has happened since has been disappointing. Some devolution deals have been signed, which has been welcome, and a second round of spending from the Levelling Up Fund was announced last month after considerable delay. However, that isn’t much to show for a flagship domestic policy. It is particularly disappointing that the ‘trailblazer’ devolution deals for Greater Manchester and West Midlands haven’t been concluded for what are the two biggest economies outside of London, despite being signalled in the white paper a year ago.
That so little has happened underlines how centralised the UK is. In other developed economies, the greater empowerment of local government would mean that the short term crises that have beset national government wouldn’t have taken up bandwidth for subnational economic policy because the latter would not have been in the near total control of central government.
Given the looming election, the future of levelling up should be seen in two phases – the run up to the next election and the period after it.
Levelling up | Phase 1
In terms of the current parliament, the Government should focus on:
- Expanding and deepening devolution. This is an area where there has been progress. Some new deals have been announced in the past six months, and an announcement on the trailblazers are expected imminently. This should be done alongside further deals that bring mayors to areas that currently do not have them.
- Getting royal assent for a Levelling up and Regeneration Bill that is fit for purpose. The bill has been subject to a series of challenges from backbench Conservative MPs that risk watering down key proposals around planning and the built environment to the point of making this part of the bill toothless.
- Setting out a programme for delivering the white paper spending commitments in areas such as research and development. In the Autumn Statement the Chancellor recommitted to increase spending in areas like research and development (R&D), which runs into billions of pounds. This creates potential to start making the sorts of investments required to get parts of the country to where they should be relative to their international peers, and enable these places to make suitable contributions to the national economy.
Levelling up | Phase 2
As for the second period, the significance of levelling up in the next parliament may well depend on what Labour decides to do. Labour has been even later to the table than the Conservatives in setting out its vision but, thankfully, that changed in December 2022 with the publication of Gordon Brown’s report on the Commission of the UK’s Future. Keir Starmer subsequently put devolution at the centre of his pitch to Red Wall voters in a speech in early January 2023.
The core argument of the Brown report, and this is shared by the Levelling Up White Paper, is that national economic stagnation, high regional inequality and the centralisation of the British state are all connected. It recommends that Labour embraces greater devolution in England, while going further than the Government by saying the metro mayor model should be applied in Scotland.
If the recommendations are accepted, this will not only mark a shift in Labour thinking, it will establish a consensus between the two main parties on devolution. It also raises the possibility that devolution, and how ambitious the political parties are prepared to be, could become an important political battleground in the run up to the next General Election.
Tackling economic underperformance remains a national imperative
Alongside this, the next Government will need to set out a policy programme to pull up the economic performance of those parts of the country that are not reaching their potential. As Centre for Cities has previously stated, and this was a key theme in the white paper, poor economic performance outside the Greater South East is mainly driven by the underperformance of its biggest cities that are furthest from their potential. And this doesn’t just hold back the regions they sit within, it makes the UK economy an estimated £50 billion smaller each year.
There is a national economic imperative to fix this through policies that should include:
- A 10-year £14.5 billion package to pull up Birmingham, Glasgow and Manchester in particular, allocating funds that have already been earmarked to invest in R&D, local transport and city centres.
- Transport for London-style powers for all large cities.
- An increase in national skills funding from 5 per cent to 7 per cent of GDP, as is the case in Sweden.
The centenary of the first levelling up policy is just five years away and governments are still attempting to address sub-national divides. The current parliament was formed with a mission of levelling up the country but, sadly, it is likely that this will be lost.
This cannot be repeated. Whoever is in power after the next General Election needs to have a levelling up policy programme ready to go if we are to stop talking about this underperformance in decades to come.
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