Levelling up isn’t about North versus South

The government’s controversial policy is a huge opportunity to radically rewire the UK, argues Anthony Delaney, but it all has to happen at a local level

Last year I became a Fellow of the RSA, and I’ve been trying to find out more about what the society does and how I can contribute in some way. So I was delighted to be invited to the Alliance Manchester Business School recently to meet and hear Andy Haldane speak.

Andy, of course, became CEO of the RSA a year ago, after more than 30 years at the Bank of England. Almost immediately, and controversially for some, he was seconded to work as head of the Levelling Up Taskforce, under Michael Gove. 

There’s a logic to the appointment. Haldane was Chair of the government’s Industrial Strategy Council, and he co-founded Pro Bono Economics, an independent charity with a mission to use economics to empower the social sector and to increase the wellbeing of all people in the UK. He was also, as I discovered, an interesting and entertaining speaker, and himself from a relatively humble background, growing up in a council house in Yorkshire, and clearly has a passion for the project.

But levelling up raises questions of its own, so let’s address a few.

If we look at gross weekly pay disparities in 2021, we see that the gaps across the UK are huge, up to a factor of two. This is also true of productivity and wealth and translates to huge gaps in health and life expectancy. This is nothing new – figures show the same pattern dating back to 1900 if not earlier, with changes only during the two world wars. Meanwhile, the regional disparity in the UK is larger than in any other western country.

At the same time, having more income does not equate to happiness or life satisfaction. In some respects, we see a mirror image of that. London is the wealthiest per capita but ranks lowest in terms of happiness. Why? Because of issues such as weak social cohesion, low green spaces and high pollution. Interestingly, there is even greater disparity within the regions. There are pockets of affluence cheek by jowl with poverty and deprivation, in every city, with a variegated pattern.

So levelling up cannot be divided or defined by North versus South, cities versus towns. It’s much more granular than that.

When Boris Johnson first used the term ‘levelling up’ in July 2019, he said it was about ‘closing the opportunity gap in our society’. Howeve,r he was by no means original, another Johnson, Samuel, coined the phrase (rather negatively) in his diary in 1763.

What does it look like? The government white paper defined 12 ingredients that must be in place: living standards, research and development, transport, digital connectivity, health, skills, education, wellbeing, pride in place, housing, crime and local leadership.

These things fit together, so much so that you can see in some places where these things are connected, they bring in more productivity and better outcomes – and where they are not, they repel investment so areas get even more left behind. Vicious or virtuous circles. One key indicator and predictor is where graduates aged 16 to 27 end up. Success in areas happens where young people feel staying where they are is a good thing and that they can do well there.

The obvious first point is that we need metrics on where we are now. This has to be measurable. We then need to imagine how different the UK would be if we levelled up. Remember, this isn’t taking from London to give to Liverpool, we are aiming to grow the pie, not re-slice it. We can look at two existing ‘market failures’ here. Falling-behind places, which are stuck in a low-growth poverty trap; and steaming-ahead places, which are stuck in a low-happiness trap. If both could be changed we would gain billions, even trillions in benefits to annual UK GDP year on year.

But how do we level up and why haven’t we done so already? We have had policies for generations to deal with regional growth inequality but they have failed. More and more new ones won’t solve it. Our problem is we’re bad at joining policy to action. There has been a lack of local empowerment and devolving of power. And, again, there is a lack of hard data. To level up properly we don’t need more policy, we need a different philosophy and a new model of government and governance. We need to cement these new models into law so they can survive changes in personnel and government. Michael Gove, and his vision for levelling up, is of course already history, sacked by the fomer Prime Minister.

So we need central government to be rigorous at asking ‘Where is the money being spent, and how is it supporting and contributing to levelling up?’ We need to ensure they really understand the data. We need a flexible approach to ‘re-tilting’ spending, ensuring the flows of cash can be adjusted in the light of data coming in. We need to establish clearly which geographical areas are receiving the money. We need to look again at public procurement practices. And we need a clear cabinet committee and outcomes framework to join up policy and action.

In terms of governance, we need to devolve spending further. This could mean extending out to the counties; it would mean devolving further in the metropolitan areas, so that by 2030, in areas such as Greater Manchester and the West Midlands, they have powers of spending, asset management and taxation approaching those of Westminster. And we need to make it all simpler, with fewer ‘pots’ of cash.

The private sector has a massive role to play in this too, enabling and encouraging clustering together for innovation and acceleration. And so do local communities. Parish councils could be remodelled with more added. Could this be the dawn of community capitalism?

Of course, this will only work socially and politically with cross-party support, and it will take generations to become properly established. Some argue this is impossible, others that it’s simply far too ambitious. But if Whitehall can be rewired, this is an opportunity to change Britain. I echo Andy’s assertion that ‘this is the right thing to do, so nobody’s destiny is defined by their geography.’

Anthony Delaney was a police officer in the centre of Manchester for ten years before going into church leadership in various places around the nation. He is now a ‘speaker, leader, author and broadcaster’ and still based in the north-west of England