Post-pandemic economic growth: Levelling up - local and regional structures and the delivery of economic growth

The Prime Minister, from the first day of his premiership, identified levelling up as a major focus of Government policy. It was featured in the Conservative Party Manifesto in 2019 and was a central theme of the programme for government, set out in the Queen’s Speech in May 2021. While it is frequently referred to by the Prime Minister and the Cabinet as the central purpose and mission of this Government, it has yet to be defined beyond its aim of ‘improving everyday life and life chances’.

Given the Government’s own focus on its levelling up agenda, the lack of clarity around its meaning and how it translates into specific policy initiatives and strategies is stark. As it currently stands, levelling up risks becoming an everything and nothing policy, not owned by any particular Minister or Department, and without any means in place of evaluating or assessing its impact or efficacy as policy in ‘improving everyday life and life chances’. (Paragraph 15) Why Levelling up?

There is no doubt that geographical inequality is a structural problem in the UK and attempting to address these inequalities should be at the heart of the UK’s plans for economic recovery post-pandemic. These plans should be focused on longer-term goals, rather than just the life span of political cycles, requiring a deeper level of consensus. Whilst we recognise that there are inequalities between regions in the UK, there are also inequalities within regions, with pockets of wealth and pockets of severe deprivation. The levelling up agenda must also seek to tackle inequality within regions, not least in cities that are seen to be well performing.

The impact of Covid-19 has not been uniform, and the extent of these differences may not be known for some time. The Government should factor detailed analysis of the impact of Covid-19 into its planning for, and delivery of, the levelling up agenda. (Paragraph 25) Funding Levelling up

The current available documents on the policy instruments the Government aims to use to level up—the Conservative Party Manifesto, its submission to this inquiry and the 2021 Queen’s Speech—show a wide ranging and disjointed programme of random policies from an obesity strategy, an increase in police officers, to funding on A roads and the creation of Freeports. Although these policies are all very interesting and welcome, it is difficult to see how they all tie together under one over-arching strategy. The cohesion of the whole has not been well described to identify how these fit together. If the Government is serious about levelling up and for it to be a substantive strategy rather than merely a slogan, it must spell out a coherent ‘plan’ as a matter of urgency. (Paragraph 30) Post-pandemic economic growth: Levelling up 33

We recommend that the promised Levelling Up White Paper sets out a coherent plan for levelling up. This must set out, in detail, a road map and timeline for the delivery of the wide range of policies proposed. Fundamentally, it must set out what problems and issues these policies are designed to address in terms of the levelling up agenda, both, as individual policy initiatives in their own right and collectively in how they fit together as part of the wider strategy to deliver the Government’s ambitious desire and commitment to level up.

Despite its large-scale ambition and promised additional funding, it is unclear whether the levels of funding available to local areas (via levelling up) will equal, never mind exceed, historic levels of UK and EU funding to local government. Given the state of public finances following Covid-19, the Government should be realistic and clear about the scale of its levelling up ambitions.

Nor is it clear how levelling up is different to past regional policy and how it will therefore succeed in areas where previous regional policy has failed. Ministers offered no adequate response to this.

The funding available to achieve levelling up is disparate and lacking any overall coherent strategic purpose or focus. Individual departments should be clear on what their contribution to levelling up will be in line with a clear strategy and agenda.

Funding for levelling up should be explicitly and directly linked to the identified issues that the Government are seeking to address, with clear metrics on what that money is seeking to deliver. There is an inequality in the capacity of local areas to bid for government funds. Whitehall should have mechanisms or procedures in place to ensure that it is not the most well-resourced authorities who are successful in securing funding. The Government needs to ensure that those without this capacity do not lose out, including ensuring appropriate funding is available for future rounds. (Paragraph 46) Delivering Levelling up

Regional and local devolution is incoherent and inconsistent across England. In some areas, this can result in duplicative and ineffective outputs. In other areas, this results in communities which feel left behind, without the support or capacity provided by other tiers of local or regional government.

The Levelling Up White Paper (incorporating the Devolution White Paper) needs to be bold and progressive. It should clarify which tiers of devolved and local government in England are responsible for delivering which levelling up objectives and then ensure those tiers are adequately resourced to deliver on those objectives, as well as providing fair distribution of those resources across the whole of England.

We noted that some regional and local authorities performed better than others, which in some cases was due to the size, institutional capacity or leadership provided within those tiers of government. We recommend that Ministers consider how to 34 Post-pandemic economic growth: Levelling up report on the effectiveness of different local and regional authorities in contributing to levelling up. Businesses and investors require clarity on who is leading the local levelling up agenda in each economic area in England.

As we highlighted in our recent report on industrial policy, the local industrial and economic insights and intelligence that came from creating Local Industrial Strategies should not be lost. We recommend that the Government provide support and funding through its new regional Cities and Local Growth Unit teams to update and adapt the published and remaining ‘oven ready’ Local Industrial Strategies to incorporate the post pandemic circumstances and Government’s Plan for Growth. These local strategies can provide the ‘bottom up’ mechanism, for evidence to flow from the regions to the centre, informing the Government’s over-arching strategy on levelling up.

We also recommend that the Cities and Local Growth Unit work with the Office for National Statistics to agree a uniform set of local economic metrics to determine progress in achieving them.

There should be a clear direction from No10 on which Department will be responsible for delivering which outcomes and how. We recommend that the Government establish a Cabinet Committee to oversee the co-ordination and delivery of the levelling up agenda across Whitehall, co-ordinating funding allocations and delivery with the devolved administrations in Scotland, Wales and Northern Ireland. The Cabinet Committee should engage with local and regional leaders to support the delivery of the agenda. (Paragraph 66) Measuring success

We recommend that the Government should set out what it envisages a ‘levelled up UK’ would look like and agree a set of metrics by which progress towards this vision can be measured. We recommend that the assessments should be based on measurable outcomes linked to short, medium and long-term milestones and goals. We look forward to seeing the work, which has been undertaken by Neil O’Brien MP and the Levelling Up Task Force in this regard, and expect it to be a core element of the promised White Paper.

The Government needs to set metrics on levelling up for each Department. Performance against these metrics should be published annually and monitored by the National Audit Office. (Paragraph 78) Post-pandemic economic growth: Levelling up 35