Levelling-up chief Neil O’Brien needs to give the concept of "levelling up" a clear definition and clarify the modes of delivery for what will need to be a long-term investment plan - that secures recovery as part of a re-shaped political economy which is fit for future purpose, write Henry Kippin and Ben Lucas.
The public reaction to ‘Levelling Up’ is clear: people want to see it happen. The May elections and the Queen’s speech raised the bar of expectation even higher. But in policy terms the thinking is still emergent. Developing a clear policy framework for levelling up is now an urgent priority.
Neil O’Brien MP has been appointed the Prime Minister’s adviser on Levelling Up and a White Paper is expected in the next few months. The challenge is to give the concept clear definition and heft. We need a sharp diagnosis, but also clarity on modes of delivery that can hold the weight that will be ascribed to the concept. The Spring Budget set out some of the Government’s thinking, but only at an outline level. There were certainly measures within the Budget itself and the accompanying ‘Plan for Growth’ document that are a welcome step in the right direction. But it is clear that we are in the early stages of what will need to be a long-term investment plan – that secures recovery as part of a re-shaped political economy, which is fit for future purpose.
The case for levelling up
The case for levelling up spans economics, politics and the social life of places. At root, we are scratching for a new language and approach to the challenge of creating a fairer country. We know that opportunity and optimism about the future are not equally distributed. A noxious mix of insecure work, fragile health and the narrowing of opportunities (or indeed pathways to social mobility) is evident. It remains shocking to read the Joseph Rowntree Foundation’s analysis of the extent of destitution and in-work poverty. The tropes that defined the Marmot Review back in 2010 – such as the ‘social gradient’ – can be seen in full effect ten years later. These hard data are backed up by qualitative analysis from the Resolution Foundation, Ipsos MORI and others, suggesting that many feel the economy is something that works for ‘other people’. Covid-19 magnified these factors enormously. No one now needs to be convinced that health and wealth are inextricably linked.
Although levelling up was framed before Covid-19 and was more a promise to deliver on the social and economic drivers of Brexit, it now feels like the mission that will have to drive post-Covid recovery. Major shocks tend to have long run social and economic consequences. Britain after the Second World War was as much haunted by the spectre of mass unemployment as it was by that of the Blitz, hence the priority put on full employment, boosting national productivity and exports, the Marshall Plan, and the establishment of the Welfare State. One of the consequences of this was a long period of rising social mobility lasting through until the 1980s. But, left to their own devices, shocks can just as often have significant long run scarring effects, as we saw in the aftermath of the recession of the late 1970s. The Great Financial Crash of 2008, simply speeded up underlying trends that included growing wage stagnation, productivity decline and a widening regional imbalance in the economy.
As we emerge from the great Covid-19 shock of 2020-2021 we face a choice between two futures.
More of the same
- Accelerating health inequality.
- Growing work inequality arising from the digital and professional vs frontline and delivery divide.
- Reversion to unbalanced carbon generating growth.
- Continuing productivity and wage stagnation.
Building back better/Levelling up
- Closing the healthy life expectancy gap and improving labour market participation.
- Return of pride, respect and worth to deprived communities.
- A new era of social mobility in towns and cities.
- Rising productivity linked to green energy, digital, and life sciences sector growth and the strategic development of local supply chains to support these.
The geography of levelling up
The ‘building back better’ future will only happen through sustained multi-decade investment and as a result of cross-party determination to tackle social, economic and geographical inequality. At its core, the idea of levelling up speaks to the relationship between opportunity and where people live. The recent Kings Policy Institute Unequal Britain report showed that 60 per cent of the public recognize the seriousness of inequalities between more and less deprived areas, and it also found that area-based inequalities are the only form of inequality about which Labour (67 per cent) and Conservative voters (59 per cent) have comparably high levels of concern.
Levelling up is not a policy that can be delivered by Central Government alone, because it affects us all in the towns and cities in which we live. So, we need to get beyond some of the false divides that have unhelpfully emerged as part of the recent narrative, such as between cities and left behind towns, agglomeration and inclusion and London and the rest of Britain. Levelling up needs to happen for people in places, but it should apply wherever it is relevant, whether in deprived parts of London, in our other major cities, or in former single industry towns in the midlands and the north. Moreover, the need to develop inclusive prosperity requires cities and towns to collaborate with each other to improve productivity, drive innovation and pivot to green industrial growth.
Making it happen at place level
The scale of ambition implied by levelling up is immense. It should follow that it cannot be delivered by the same processes that have led to the need to do this in the first place. The Government has recognized this through the changes to the Green Book, and the relocation of parts of Whitehall, along with establishing the new Green Infrastructure bank in Leeds. Funding vehicles such as the Levelling Up Fund will need to shift from national, competitive pilot projects to a more systematic and devolved approach.
We need a new tripartite approach to levelling up at the local level by combining three priorities in one – human capital development; place improvement; and business investment. Each needs equal focus, and investment, with Government, cities, Mayors and businesses all playing a critical role in making it happen. Previous attempts to address geographical inequalities have failed to do these in lockstep. As with Premier League football, we have been happy for our economy to be a platform for global talent, rather than a reflection of the strength of our local business base. Brexit and Covid-19 have brought much of that into question. The opportunity now is to simultaneously develop the potential of our people, improve our towns and cities, and develop sectors like green energy, digital, ageing and health and life sciences whilst shortening our supply chains, and creating better local jobs.
The human capital priorities are clear. We need to support people to have better outcomes across the life cycle, so that they have the capability to fulfil their potential and contribute to social and economic prosperity. That requires a preventative and early intervention approach to improve public health and to support young children and families. It needs a major effort to close the education attainment gap. And it requires equality of regard and funding for vocational education and further, so that people have the skills and employment support they need for the good jobs of the future.
For town and city regeneration, major capital projects need to be connected to local strengths, assets, and a wider strategy for creating local opportunity. Funding and delivery models should have social and inclusive outcomes baked into their prioritisation and assessment. But supply side measures will not be enough to turn the tide on their own. We also need to see more and better jobs that people from deprived communities can access. This requires a big increase in business investment linked to a proactive building of shorter, local supply chains connected to the growth sectors that the nation is betting on; particularly in green industry, health and life sciences and digital.
The Plan for Growth, Building Back Better that was published by the Treasury at the time of the Spring Budget, sets out a clear set of policy objectives. These include: enabling regional cities to reach their economic potential, a levelling up approach to spreading prosperity across our towns and cities with further devolution to support this; and investment in infrastructure, innovation and a green industrial revolution. There is even a welcome recognition of the need for better human capital development, with an acknowledgement of the uneven and unfair skills and education differential between the North East and London. What there isn’t yet is clarity about the funding, investment and delivery systems that will need to be put in place to make this happen.
Post-Covid recovery planning is already underway across the country. But if we are to truly begin ‘levelling up’ (rather than reverting to previous), then we will need strong cross-sector collaboration, and a mixture of new local institutions, special purpose vehicles, investment agreements, prevention funds and multi-year public service outcome deals. The approach will need to combine innovation, collaboration and social productivity, working with local people to jointly develop the resilient communities on which the future of our towns and cities will depend.
Image credit: “File:Official portrait of Neil O’Brien MP crop 1.jpg” by David Woolfall is licensed under CC BY 3.0
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.
