The current Government was elected on a pledge to address regional inequality and to level up the country. Two years on, the exact definition of levelling up remains vague and the task has been made even more challenging due to the impact of Coronavirus. Centre for Cities’ ongoing work sets out the nature of the levelling up challenge, proposes actionable policy solutions and offers a framework for success so levelling up the UK can become a reality.

• What does levelling up mean?
• What should levelling up achieve?
• What should the Levelling Up Fund be spent on?
• Where needs to be levelled up?
• Is the Government planning further English devolution?
• When will the Levelling Up White Paper be published?
• Who is writing the Levelling Up White Paper?

What does levelling up mean?

Despite using it many times, the Government has not defined what levelling up means. This has led to confusion about what it is that the Government wants to achieve through levelling up, with even the Prime Minister struggling to answer the question.

What should levelling up achieve?

Centre for Cities has set out its proposals on what levelling up should achieve. In brief, it says there should be two goals:

• Levelling up should improve standards of living across the country: The goal of levelling up should be to narrow the divergence seen across the country in areas such as health, education and public service provision.
• Levelling up should help every place to reach its productivity potential: levelling up the economy can’t mean making everywhere the same, because different places play different roles in the economy. Instead it should be levelling up Manchester with Bristol, and Cumbria with Dorset. But because of the inherent benefits that cities offer businesses, Manchester’s productivity potential should be bigger than Cumbria’s productivity potential.

What should the Levelling Up Fund be spent on?

To level up left behind places the Government should move away from centrally controlled funding pots and devolve power and money to local leaders. However, there are several areas where the Government and local areas should focus spending to level up:

• Skills: Adult education spending should rise from 5 per cent of GDP to 7 per cent. This should be spent on a voucher for adults with few or no qualification to use for courses, more money for colleges and flexible courses. In schools the money should be used to expand the opportunity areas programme and improve access to extra-curricular activities.
• Public services: The next Spending Review should end austerity for local service provision, especially local government spending. It should commit to year on year real-terms increases over the cycle of the next Spending Review.
• Transport: All metro mayors should bring their buses under public management through the franchising powers they already hold. The Government should extend franchising powers to all areas. In places where the transport system is under pressure, the Government should invest in new infrastructure. The Government should accept the National Infrastructure Commission’s recommendation for an extra £31 billion of funding for priority cities outside London.
• City centres: Money should be spent on making city centres more attractive places to do business through a £5 billion City Centre Productivity Fund.
• R&D spending: The Government should focus increased R&D spending in the places where it is most likely to have an impact – places where innovation is already happening.  Because of their scale, large cities are the most obvious candidates for this.

Where needs to be levelled up?

Cities and large towns in Northern England and the Midlands are among the places most in need of levelling up. Many lag far behind places in the Greater South East of England on a range of levelling up measures. For example:

• Health: the average male resident in Westminster lives 10 years longer than someone in Glasgow local authority.
• Skills: In 2019, 30 per cent of working-age people did not have five good GCSEs or equivalent in Barrow-on-Furness, and 22 per cent had degree. This compares to 9 per cent and 59 per cent respectively in St Albans.
• Productivity: on average, a worker in Milton Keynes produced in three days what a worker in Blackburn takes five days to produce in 2018.

The North lags the South on a range of indicators

Source: ONS

Skills and productivity in particular directly impact people’s personal prosperity: People in London are paid £16,150 more per year on average than people in Burnley.

Productivity across Great Britain, 2018

Source: ONS

Note: Four local authorities that border a city have been classed as more rural because of their size. These are County Durham, Northumberland, Scottish Borders and Powys.

The pandemic has made this north-south divide even worse. Our 2021 Cities Outlook research found that Covid-19’s economic damage makes the promise to level up the North and Midlands four times harder and risks levelling down prosperous places in southern England. Birmingham, Hull and Blackpool face the biggest challenges.

The impact of the pandemic on the UK job market

Source: ONS, claimant count March 2020 and November 2020, population estimates 2019. Data is not seasonally adjusted.

However, policy makers should not forget that some places in the south also need to be levelled up, particularly due to the pandemic. Many southern cities that were previously reliant on the aviation industry are now struggling – in particular Crawley, Slough and Luton.

Is the Government planning further English devolution?

The Government’s English Devolution White Paper has been replaced by the Levelling Up White Paper. This may suggest that devolution is now less of a priority for the Government than it was when it committed to doing the original White Paper, but the Prime Minister has said that the Government is considering plans for further devolution within England.

As part of this, Centre for Cities proposes a wholescale transformation of English local governance in which:

• Replaces two-tier local authorities with unitaries
• Establishes directly elected leaders for every place
• Matches political boundaries to economic geography
• Increases the powers for councils and combined authorities

 Proposals for reformed local government

When will the Levelling Up White Paper be published?

The Government has said that it will be published ‘later this year’, but as yet has not committed to any specific time frame.

Who is writing the Levelling Up White Paper?

The Prime Minister has appointed Neil O’Brien, MP for Harborough, as his advisor on levelling up, as well as forming a levelling up unit within the Cabinet Office. Centre for Cities understands that other departments, such as BEIS and MHCLG are also helping to produce the White Paper.