The Levelling Up White Paper One Year On: What progress has been achieved?

Photo credit: Institute for Government/Policy@Manchester

A year on from the Levelling Up White Paper, the Institute for Government held an event assessing the progress of the levelling up agenda. Anneliese Dodds MP, Chair of the Labour Policy Review, featured on the panel and gave Labour’s perspective on regional inequalities across the UK.

The Levelling Up White Paper was published on 2^nd February 2022, seeking to flesh out what was probably the most nebulous concept around which an entire government department (and arguably the whole government) has been organised. Much branded about during the 2019 election campaign, senior officials felt they had been tasked with delivering a policy programme that was yet to be defined.

The 332 pages of the White Paper sought to address this.

Wide-ranging in its scope and ambition, it took lessons from Jericho and Constantinople but stopped short of new funding commitments. Though the Prime Minister still finds himself having to release explainer videos about levelling up on his (admittedly well-run) twitter feed, for the interested and engaged reader, it gave a great deal more clarity to the concept.

However, though it was effective and (relatively) uncontroversial in diagnosing the problems, it raised significant debate around the solutions, and as such, what effective progress looks like.

One year on from the White Paper, the Institute for Government hosted an event in partnership with Policy@Manchester to ask how much progress had been made on the levelling up agenda. The panel included:

• Anneliese Dodds MP, Chair, Labour Party and Labour Policy Review
• Professor Richard Jones, Vice President for Regional Innovation and Civic Engagement, University of Manchester
• Councillor Jane Mudd, Vice-Chair, Western Gateway Partnership and Leader of Newport City Council
• Councillor Abi Brown, Leader, Stoke-on-Trent City Council
• Thomas Pope, Deputy Chief Economist, Institute for Government (Chair)

Labour’s assessment of levelling up

Labour’s answer to the Levelling Up White Paper came in the form of the Brown Commission, former Prime Minister Gordon Brown’s assessment of constitutional reform as serious as the man who wrote it. As was acknowledged by Dodds, there was clearly some overlap between the two pieces of work. However, she was clear to draw a line between the two: “there was agreement perhaps around some of what the problem is, but a very different set of solutions.”

Dodds sought to highlight three key areas of weakness that Labour identified in the White Paper: “we feel it was deficient in three ways, in terms of its theory of change, and then the scope and scale of change that’s needed.”

Speaking to the first of these three areas, Dodds made it clear that the levelling up agenda cannot be divorced from wider economic policy. Indeed, it is far from controversial to suggest that sustainable economic growth requires more than a small number of economic hubs, but rather, a country that is productive throughout.

“We believe that regional inequality is one of the reasons that we’ve had such sluggish growth over the last 13 years, and that if you do have so many parts of the country which have been growing so slowly, that’s part of the reason why we’ve had those economic problems. You can’t grow the economy with only a few businesses in a few places with a few people. You need to have it bottom up across the country.”

Indeed, by this view, the levelling up agenda becomes more urgent amidst the cost-of-living crisis. As Dodds noted, to push levelling up to the side would be to misrepresent the problems that we have seen, because sustainable growth is rarely compatible with what we see in the UK – the highest levels of regional inequality in the OECD.

Dodds also went on to highlight that the scope of the change called for in the White Paper was insufficient. This was a point agreed upon by all members of the panel. Areas of policy including childcare, community control over assets and energy efficiency were noted to be critical to the levelling up agenda, but see little daylight in the White Paper.

Both Professor Richard Jones and Jane Mudd also noted the need for a much more concerted focus on health inequalities as part of the levelling up agenda. While this is something that the White Paper promised to tackle head on, with the publication of the Health Disparities White Paper, this was recently scrapped, and replaced with the Major Condition’s Strategy.

While it is expected that the Major Conditions Strategy will consider health inequalities, it remains true that there has been little in the way of a coherent and systematic government approach to health inequalities in England since 2008, when the (then-named) Department for Health published its Health inequalities: progress and next steps white paper.

The damage of this is clear. Health disparities and productivity are intimately linked; poorer places have worse health outcomes, and worse health outcomes breed lower productivity, creating a vicious cycle.

Without a concerted focus on health inequalities, more people will needlessly face ill-health. This is both a human tragedy, and it will remain a significant drag on the labour market, productivity and growth, and a significant barrier to a long-term reduction in regional inequality.

Finally, Dodds noted that a greater scale of change is needed with regards to devolution. Including the devolution deals completed last year, there remain 30 million people in the country not covered by one. In Dodds’ words, “central government should have to explain why it won’t devolve rather than it being a gift that comes from central government.”

However, Dodds stopped short of calling for the devolution of tax raising powers. In response to a question on the topic, she noted that “you would just be devolving pain ultimately, if you went down that route without an enormous smoothing mechanism.

“In Germany they’ve been working on this for many decades, and it’s absorbed huge political, administrative and economic efforts in order to get to a system that is still contested by many in the country.”

Coalitions not competitions

A common thread throughout the discussion was the frustration with the competitive funding model of the Levelling Up Fund.

The shift towards Mayoral Combined Authorities, and the promise of a devolution deal for any area that wants one, implicitly recognises the fact that the issues that the levelling up agenda seeks to address are ones that cross the boundaries of political units and require joined up thinking.

On this, Mudd noted that we need to “bring together different areas to plan this in a strategic way, rather than pitting local authorities against each other to compete for scarce resources.”

The result of this is a winners and losers process, which is itself an answer to a winners and losers picture of regional inequality. Moreover, as Dodds noted, even the ‘winning’ local authorities may not characterise themselves as such: “even when you take [round 2 of the levelling up fund] into account, and the allocations that come out of it, of the 151 local authority areas, only eight of them, with that cash injection, are actually back to where they were in real terms. So you know there’s been a kind of partial refund for some areas on where they were, but ultimately this is not going to be a recipe for economic development up and down the country.”

Final thought

As was claimed by Centre for Cities, long before the White Paper was ever published, given the level of regional inequality in the UK, levelling up will require funding and policy longevity much closer to the near £2 trillion spent on the reunification of Germany.

With £4.8 billion from the Levelling Up Fund, and £2.4 billion from the Towns Fund, it is likely that the most lasting impact of levelling up to this point has been the notable commitment to devolution, including devolution beyond metropolitan areas. However, as Mayor of the West Midlands, Andy Street noted in his infamous twitter tirade, there is little movement on fiscal devolution.

Few were under any illusions that the economic policies announced in the White Paper were ambitious enough to create equality of opportunity across the UK, and so the relative lack of progress should come as no surprise.

Will Labour’s pledges on levelling up amount to much more? We probably won’t have to wait too long to find out.

About the Levelling Up Commission

Curia’s Levelling Up Commission intends to consider ways to implement the Government’s Levelling Up White Paper and subsequent Bill from the perspective of local and regional government. Too often the Levelling Up agenda is something being done ‘to and for’ local and regional government, the Commission intends to make sure it is done ‘with and by’ them.

Through roundtable meetings with MPs and senior leaders of local and regional government from across the UK, quantitative data analysis and regional sprints, the Commission intends to set out a series of recommendations to consider how regional inequalities can be reduced from the perspective of public services in four key areas:

• Health and Social Care
• Housing and Homelessness
• Education, Skills and Training
• Crime, Justice and Rehabilitation