Public Affairs & Government Relations

FTI Consulting Public Affairs Snapshot – Levelling Up: A moving feast in the right direction?

Many questions have been asked about what the Government’s much-used phrase “levelling up” means. Numerous speeches have been given about the Prime Minister’s flagship domestic policy, and lots of the Government’s activity has been redirected and driven by this slogan, but what does it mean?

Finally, we have the outline of an answer: “We want everyone to have the chance to choose their own future, own their own home and live their best life.” These were the words of Michael Gove MP, the new Secretary of State for the Department for Levelling Up, Housing and Communities first speech, as he set out his vision at the Conservative Party Conference.

After almost two years since the promise to ‘level-up’ at the last General Election, Gove announced that levelling up will have four elements; strengthening local leadership, raising living standards, improving public services, and giving people resources to enhance pride of place. The speech helped provide some much-needed direction to the levelling up agenda, but why does this matter?

Why is this so important?

Levelling up is more than just a political catchphrase. As is widely recognised, the UK is Europe’s most regionally unequal major economy. According to the ONS, income inequality in the UK has increased by an average of more than 35% over the last 10 years. This is stark and has a material impact on quality of life.

Let us take the examples of the two Kingstons: Kingston upon Hull in East Yorkshire and Kingston upon Thames in South West London. They share a common name, but the fate of their residents has been very different. The former is ranked amongst the most deprived areas in the country (9th), whilst the latter is ranked amongst the least deprived (270th).

Those living in Kingston upon Hull have a life expectancy of 76 years for men and 80 years for women. This is six years lower than men living in Kingston upon Thames and five years lower for women. Children born in Kingston upon Hull also have an average GCSE attainment of 45.9, falling behind the 58.9 attainment average in Kingston upon Thames.

The same disparity can be seen in health too. People in the constituency of Kingston upon Hull East (4% and 13.7% respectively) are twice as likely to suffer from coronary heart disease or obesity, than those who live in Kingston and Surbiton (2.1% and 6.6% respectively). This imbalance is exactly what the Government has pledged to address.

A political opportunity?  

Efforts to close regional disparities are not new, but the political climate in which this Government finds itself most certainly is. At the last General Election, the Conservative Party gained an 80-seat majority, in part thanks to a promise to ‘Get Brexit Done’, a weak opposition, and the ill-defined commitment of ‘levelling up.’ Despite no clarity at the time on what ‘levelling-up’ meant in reality, hitherto Labour strongholds such as Bishop Auckland and Workington put their trust in the Conservative Party for the first time in a generation.

The promise to ‘level up’ has become this administration’s principal slogan. This puts the Conservatives in a position to politically and electorally monopolise the policy debate on all – social, economic and cultural – fronts. We are already seeing this positioning translate into action. Money from the ‘Levelling Up Fund’ for transport, museums and community infrastructure has been allocated in significant sums to numerous seats in the newly won ‘Red Wall,’ such as Redcar and Cleveland and County Durham. Well known Conservative Robert Jenrick MP has also received £25 million to level up his seat in Newark.

In short, the Conservative Party have found themselves representative of an entirely new electorate for the first time in recent history, and there is now an urgent need to deliver and demonstrate progress.

How will this all be delivered?

Whilst Gove’s speech was welcomed by a number of commentators, it has also led to more questions; primarily focused on how such a vast agenda will be delivered. The Government wants more community involvement in the ‘levelling up’ process. Communities themselves know what is best for the place that they call home, but will this desire to see more local decisions involve further devolution of power, for example, local resident champions or more institutionalised options of parish councils and mayors. The balance will be important.

The challenge of raising living standards will be the greatest. Better employment and training prospects and providing security to individuals and families will be the crucial issues. Some have pointed to the opportunities that a new green economy and green skilled jobs could provide to left-behind areas. The Government has recognised that people should not have to move to seek better jobs and life opportunities. The Welsh Government get this too. They recently announced a vision to persuade young people to stay in or return to Wales. The Government cannot do this alone and will also need to lean on business for help.

The Government also wants to restore local pride. Commentators have called for more local ownership of community assets, such as local high streets and reviving empty buildings to support social capital. Recent research found that the inequality seen in the UK is as much a social and cultural problem, as it is economic. Places such as Merthyr Tydfil, Boston and Great Yarmouth have all suffered economic decline, alongside the fraying of declining social norms, familial relationships and trust in civic institutions. But this will be difficult as social infrastructure has traditionally been overlooked by policymakers in favour of physical regeneration.

The Government has long struggled to define the agenda, and the four objectives set out in the speech show exactly why. The problem rests on the fact that the agenda is far-reaching and cuts across many layers of power and relies on different Government levers and departments. Each local area will have their own unique issues; some of which the Government can either directly fund or influence, others which will need to be led by local communities themselves or business. The test that Gove and his team will now have is the coordination and delivery of such a bold agenda.

Whilst we await further details on delivery, what has become clearer is that it is not about north versus south, towns versus cities and rural versus coastal areas. It is not about helping one place at the expense of another, as has previously been the case. Rather, it is an ambition and issue for all – every person, region, local place and Government department.

A repeat of history?

History has shown that the effort to bring prosperity and opportunity to left-behind people and places is not from lack of trying or recognition of the issues. In the last fifty years, every government of every colour has attempted to help turnaround left behind places, with a significant amount of money and political capital expended in the process; from Wilson’s Urban Aid programme, Thatcher’s Urban Development Corporations to Blair’s New Deal for Communities (NDC) and the current Government’s Levelling Up Programme. What has been missed is the focus on what works and the lessons that can be learnt.

Changes in SW1

In Westminster, there have been significant political developments to help shape the delivery of Johnson’s and flagship domestic policy. Andy Haldane, former Bank of England Chief Economist, will now lead the Levelling Up Taskforce. He is charged with defining the delivery of the Levelling Up agenda. Haldane has long been a champion of ‘left-behind places’ recognising that “problems are localised… with extremes of affluence and deprivation often sitting cheek-by-jowl within a given locality.”

The rebranding and creation of the new ‘super’ Department for Levelling Up, Housing and Communities has set the tone in terms of Government commitment to advancing the agenda. The reshuffle in September saw a very experienced Cabinet Minister take the reins of this new department. Gove is already a politician who believes in the agenda. In 2008, he warned of the “neglect of relationships,” “erosion of community resilience” and the “running down of social capital.”

The Prime Minister’s old Levelling-Up Advisor, Neil O’Brien MP was also promoted to Minister for Levelling Up, The Union and Constitution. He will now be responsible for the UK Shared Prosperity Fund and the much-anticipated landmark Levelling Up White Paper expected to be published soon. This agenda has long been a passion for the policy expert turned MP.

The new Department puts experienced individuals in positions to drive the agenda. Whilst the objectives of Levelling Up have become somewhat clearer, the next challenge will be setting out the means to achieving them.

Tomorrow’s Spending Review will be the Government’s major opportunity to do this. There will be no easy options for the Treasury. The Government have already committed £4.8 billion towards the Levelling Up Fund, £220 million towards the UK Community Renewable Fund, and £150 million for the Community Ownership Fund. This builds on the £830 million boost for high streets, and £3.6 billion put forward for the Towns Fund, with over 100 places benefiting from investment opportunities for long-term economic growth, skills, infrastructure and cultural assets. One thing that is clear is the Government’s priority to ‘level up’ will cost money.

A helping hand from business?

Whilst the public purse can only stretch so far, there is room for business to step in to partner government and play a central role in the delivery of the ‘levelling up’ agenda. The private sector has a long history of driving improved economic opportunity in the UK. Margaret Thatcher introduced Enterprise Zones in 1980s, and this was revived 30 years later under David Cameron’s premiership with Local Enterprise Partnerships. Whilst business has been doing its bit to help improve regeneration, it can continue to do more to drive investment, advance local economies and advance opportunities for left-behind areas.

It is clear that building back better must involve local people and business. The next General Election will prove to be the real barometer for the Government’s Levelling Up efforts. Until then, local people need clarity of what to expect, and businesses need a better understanding of the Government’s levelling up ambition in order to help provide a helping hand. This can be a win-win agenda for all, if and only if, it is executed well.

 

The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.

©2021 FTI Consulting, Inc. All rights reserved. www.fticonsulting.com

 

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