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“Levelling up” - delivering political rhetoric or addressing socio-economic equality?

Ben Pretty • 22/12/2021

What is the issue on Levelling-Up? 

The UK has faced chronic social and economic inequity for years and it is probably fair to say that some degree of sub-national disparity is always inevitable. Some places will outperform others due to social, economic or even physical and cultural assets and advantages that align to market and economic opportunities (and challenges) at the time. 

However, UK regional imbalances are reported to be greater than in most comparable nations, particularly when measured on a productivity per head basis. 

Pre-package holidays and budget flight operators, UK seaside resorts once boomed – Great Yarmouth was heralded in Charles Dickens’ David Copperfield novel as the “finest place in the Universe”. Parts of Great Yarmouth are now ranked as some of the most deprived nationally. 

This isn’t an attack on Norfolk, this is a national trend. Whilst domestic tourism boomed during Covid, according to a latest American Express survey, half of the UK population is planning an overseas holiday in 2022 with a spend budget over £40bn. Some said during lockdown that Covid had changed the way we holiday forever. It seems our coastal communities might still need a plan B.

 

Is Levelling Up new or just another vote buying rebrand?

Government policy has sought to address regional equality for decades – this was the purpose of the Regional Development Agencies established in 1998, which were then abolished and replaced by LEPs in 2012. Government is about to release a review of LEPs as well as its first Levelling Up White Paper. Levelling Up is well and truly in motion some might say with:

  • 10 new Freeports
  • Up to 750 civil servants to be located in Darlington and a further 500 in Wolverhampton
  • Multiple locations across England have received investment through initiatives such as the Future High Street Fund, Towns Fund and Levelling Up Fund
  • UK Infrastructure Bank established in Leeds

We can’t accuse Government of not trying, despite cynics pointing to questions of displacement, creating more disadvantage to areas not successful in national funding competitions, and linking locations of investment to either established Tory or marginal “battle ground” constituencies. I will leave the HS2 debate for another day. 

 

Are there winners and losers in the Levelling Up game?

We observe that those who play the game can succeed. Mayoral Combined Authorities (MCA) fall into this category and are reaping some lucrative financial rewards (or at least promises of such).  LEPs, originally set up to drive economic growth across functional economic areas, are the current losers with no further devolved capital funding, although many play a critical ongoing role in the business support landscape. Surely LEPs have a role going forward, particularly in areas where there are no MCAs? Levelling Up should not be just about our major city conurbations and rural communities still make up a large part of our overall UK economy. 

Government seems to be favouring sub-national funding competitions – this will always result in winners and losers. Again, the cynics would argue that many winners seem to be repeat winners and the statistics somewhat support this. In practice, this favours not only “blue” areas but perhaps those with the resource, capacity and capability to be ready to respond to the ever increasing need for “shovel ready” and ribbon-cutting worthy schemes. 

 

Can we really genuinely Level Up?

Holistic and wholly equitable Levelling Up of the UK is not going to be achieved in our lifetimes. However, efforts to promote sub-national productivity and equity should remain at the centre of economic and fiscal policy. Long term certainty around the devolution of powers and budgets is critical to this. This shouldn’t be about bidding at short notice for discrete and often very narrowly focused funding pots on a nationally competitive basis. Neither should this just be about the North vs the South. 

We are working in a number of locations in the South (even in some London Boroughs) where productivity and socio-economic disparity relative to national averages is below par. Some locations might never get to national averages but the focus should be on supporting places to maximise their potential. 

 

Will place based appraisal assist?

The latest Green Book “place based” approach enables a more flexible approach to exploring the benefits of public intervention at a local place based scale – i.e. accepting that not all projects have a national impact and it is the local impact that is often important. I very much welcome this in terms of supporting local economic growth priorities and it will be interesting to see how this is accepted by Government, particularly in a time of national funding competitions, such as the Levelling Up Fund, whereby we are still being funnelled down a national impact route using land value uplift and wider external impacts. This is not helpful in trying to attract and spread Government investment in areas such as skills and Research & Development, which are surely fundamental drivers of productivity and wealth creation?  

 

What’s next?

The most frequently applied buzz words of 2021 must surely be sustainability/net zero and social value, yet we still don’t really have a formally established and widely accepted framework for monetising many of the benefits linked to these. This must be a priority for the short term to ensure that local places can readily make a case for local priorities to maximise their long term sustainable socio-economic growth prospects. Sustainability is probably the single biggest challenge facing the real estate sector at present and I cannot think of one of our clients that would deny this. 

I am an advocate of encouraging healthy competition in certain instances and I fully recognise there is a limited “pot” of gold. However, ad-hoc, short term cash handouts to projects that deliver local political priorities at the expense of strategic, game-changing schemes aligned to local socio-economic challenges and opportunities are surely the not the way forward if we are to genuinely Level Up? Surely this needs longer term certainty around Government priorities and the devolution of funding to enable places to plan strategically the optimum ingredients and delivery models for successful local economic growth?

Levelling Up is a multi-faceted “game” but it must be remembered this isn’t the next series of Squid Games, this is for real. There is no rule book and there is no one winner. Every place is different and through Levelling Up we don’t want uniformity of offer and blurring of identify and distinctiveness between places. Taking a genuine place based approach to local economic growth that focuses on the physical, social and economic challenges, assets and opportunities has to be the way forward to prove Aristotle correct in the whole being greater than the sum of parts. 

The Development team can help advise on the Levelling Up agenda, COVID-19 town centre/high street repurposing, housing growth and infrastructure-led development.

To find out in more detail how we can help you please download our Economic Development and Appraisal brochure

 

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