The ‘levelling up’ of the North is long overdue. Despite the vital contribution that the North makes to UK economy, culture and society, the North has been held back by a lack of investment for decades.
This has contributed to the UK having higher levels of regional inequality than any large wealthy country. The disparity in investment between the North and the South East can be illustrated through transport funding - London receives three times more transport investment per person than the North and seven times more than Yorkshire and the Humber. This regional inequality has the most serious implications for health and life expectancy. Research has shown that 88% of Northern Local Authorities have a lower female life expectancy than the average for England and 86% have a lower male life expectancy. It is estimated that a third of the productivity gap between the North and the rest of the UK is due to ill health – losing £13.2bn from the UK economy each year
Though it is long overdue, levelling up has recently become a central political agenda for both main political parties. The Conservative majority in 2019 was largely gained by stunning victories in Labour’s ‘red wall’, including many northern constituencies that had not returned a Conservative MP for generations. The ‘levelling up’ agenda has thus become a political imperative for the fortunes of the two main parties, as well as an economic imperative for the success of the UK.
Jonny Ross-Tatam reports on the People's Powerhouse and Tortoise event - 15th July 2020
The question posed by this Tortoise and People’s Powerhouse event was, given the Covid-19 crisis, has the levelling up agenda now changed? Attendees were joined by three superb panellists:
Sarah Longlands, Director of IPPR North and People’s Powerhouse strategic board;
Neil McInroy, Chief Executive of Centre for Local Economic Strategies and People’s Powerhouse strategic board; and
Paul Dennett, City of Salford Mayor.
Levelling up needs to be much more than big infrastructure projects
The consensus from the panel and the audience to the central question was that the necessity and priorities for levelling up are the same as they were before the Covid-19 crisis. All three panellists agreed that levelling-up needs to be far more than investments in big infrastructure projects, such as HS2. Alongside infrastructure and transport investments, there needs to be a levelling up of investment in people. Sarah Longlands emphasised the importance of investment in early years education; Neil McInroy the need for the creation of good quality, secure work and to move away from the insecure, precarious work that has proliferated in recent years; and Paul Dennett highlighted the need for local government to have the resources to deliver vital local services.
Given the obvious social and economic benefits of investing in people – such as in health, education (across the life course), skills and social care – it begs the question (as put by Neil McInroy) of ‘why aren’t the Government investing more in people already?’ Why isn’t, for instance, early years education part of the Government’s ‘new deal’ for a post-COVID recovery?
Neil McInroy: ‘The unborn child is our future. But the unborn child doesn’t have any powerful lobbyists, they are not in the House of Lords.’
A new economy, not a return to the old economy
As we recover from the Covid-19 crisis, some have been calling for as swift as possible return to normal and the economic consensus that had reigned for the last few decades. But it was a consensus among the panellists and audience that we should not simply return to how the economy was before COVID-19, we should build back to a better economy. A number of ideas were discussed, including devolution of economic power to regions, cities and localities and community wealth building. The latter is about keeping wealth in local communities rather than allowing it to be siphoned off to London and other centres of economic power.
Community wealth building requires a number of steps, which include:
Harnessing public procurement for local economies, so that the money spent by public institutions is spent on the local economy and local businesses. If the council, for instance, is retrofitting council housing, they should commission a local business to do the work, thus circulating and growing wealth in the local economy;
Supporting and investing in local and community businesses, so that public money and consumer spending recirculates back in the local economy, which doesn’t happen as much if money is spent in big multinational corporations with very economic connection to the local area. This could be done through reinvesting public sector pension funds into the local economy;
Requiring big public and private employers to pay at least a living wage, while employing and training those who are out of work, thus increasing the social and economic value of these institutions;
Encouraging worker and cooperative ownership of local businesses, so that economic rewards and power are shared more evenly; and
Encouraging community ownership of land through community land trusts.
Community wealth building is not just a philosophy, this approach has delivered significant changes to a number of local economies. Preston is the most famous example. Since adopting the community wealth building approach, they have seen a significant investment increase in the city - £74 million being reinvested in Preston and an extra £200 million in the wider Lancashire economy – and Preston topped the Good Growth for Cities Index in 2018. Neil McInroy, Chief Executive of CLES, the organisation who promotes this way of local economic ‘thinking and doing’, is hoping to keep spreading the community wealth building philosophy across the UK.
As well as a fairer economy with more locally devolved power, all panellists and audience members agreed that we must tackle the climate crisis and move to a zero carbon economy. The panellists called for greater investment in green transport, infrastructure, support for walking and cycling, energy efficiency and a determination to maintain the gains in air quality that have been made since lockdown.
The level of investment needs to match the rhetoric
While the recovery from Covid-19 presents an opportunity, there is a fear of letting this opportunity slip by. The ambition of the resources has to match the ambition of the rhetoric. For instance, Paul Dennett pointed out that while the £80 million funding for new housing on brownfield sites in Greater Manchester was welcome, the scale of the resources paled in comparison to the scale of the housing crisis. The impact of a decade of austerity in holding the North back was also emphasised. A levelling up agenda cannot be taken seriously if it is accompanied by further austerity and cuts for local government, local services, jobs and communities.
Power and decision-making needs to be done locally
Finally, the attendees discussed the importance of bringing power and decision-making closer to local people. More than that, local people should be empowered and involved in how we recover from Covid-19 and how we ‘level up’ communities across the North. Sarah Longlands spoke passionately about the importance of local government and local communities in levelling up the North and stressed that this cannot and must not be done by Whitehall diktat. IPPR North have produced research demonstrating the positive impacts of devolution on creating inclusive economic growth and meeting the needs of local people. Neil McInroy and audience members also discussed the importance of reforming our democracy, to bring genuine power to local people. Steps to do this include creating local citizens assemblies to decide how their communities can be supported to level up as we recover from Covid-19 and in the future.
Salford Mayor Paul Dennett agreed that co-creation was crucial, but noted that a decade of austerity and slashed local government budgets had reduced the capacity for co-creating projects with local people. More devolution and more powers must not be a replacement for the necessary resources, if we want to genuinely level up communities across the North. It was stressed by the audience and the panellists that ‘co-creating’ projects and services with local people cannot be a ‘tick box exercise’, it must genuinely empower local citizens.
It was clear from the audience and panellists that the ‘levelling up’ of the North was long overdue and Covid-19 crisis presents an opportunity to build back better than before. But there was also some healthy scepticism of some of the soaring rhetoric that we have heard from the Government and elsewhere. To truly build back better we need the ambitious investment to match the ambitious rhetoric. More austerity risks setting us back further.
You cannot level up with more austerity and further squeezes to local government budgets. Levelling up requires immediately addressing the funding gaps in local government and local services. And to avoid the mistakes of the past, we cannot level up the North from an office in Whitehall, power and decision-making must be devolved to as local level as possible. People who live in their communities, who know it best, should have the power to shape the futures of their villages, towns and cities. It must be their vision, not Whitehall’s, that leads the ‘levelling up’ of the North.