Departure leaves a hole in the grand spending plan

Levelling-up efforts under threat after Boris Johnson loses his right-hand man, write Tim Wallace and Russell Lynch

Dominic Cummings was only one man in Whitehall’s giant machine, but exercised an outsized influence, so it is reasonable to ask how much impact his departure will have on plans to reform the economy – particularly when Britain needs a rapid recovery from Covid, and the Prime Minister needs a strong, organising figure behind him.

In as much as the Government has a non-covid strategy, it is based on two key Cummings policies: getting Brexit done, and levelling up the nation. The first of those is coming to a conclusion, one way or another, in the next few months. Analysts suspect the end of Cummings, pictured, plus comms director Lee Cain, another Vote Leave veteran, could make a deal more likely.

The second has been blown off course by Covid – witness last month’s battle over regional lockdowns.

To those objectives a third must now be added: controlling the finances. This poses difficulties. Levelling up requires cash for physical infrastructure, jobs and skills training.

That is now in peril. The budget deficit is set to hit £400bn this year, far above almost £160bn at the peak of the financial crisis, which ushered in a decade of austerity. Bold spending plans will struggle. Traditional caution is back.

“The Boris-dom project was always one which increased spending by quite a lot,” says one seasoned Westminster insider. “Cummings always imagined resetting the UK with a massive investment in stuff. But it was undoubtedly predicated on there being a lot of money we could spend.”

Former chancellor Philip Hammond this week said anyone who thinks the political appetite exists for significant spending cuts or tax hikes before the next election is “living in fairy land”. But it does limit the room for extra spending pledges.

Andrew Carter, at the Centre for Cities, is confident rhetoric around levelling up will continue, but he fears without Cummings there may be little progress. “The levelling up agenda is complicated. It requires government departments to work slightly differently and be more organised between each other than they are on typical departmental issues. That requires political rhetoric but also needs individuals to get it done.”

Cummings was also an advocate of the innovation-led regional renewal championed by Sheffield University professor Richard Jones, whose paper on a “Resurgence of the Regions” he referenced in a blog post. ost. Jones called for a series of public investments nvestments in new research centres outside the South East. The publicly cly funded research and development ment would suck in private sector cash.

Stian Westlake, a former mer government adviser and nd innovation expert, says: “There is always a temptation if you are trying rying to help a poor area to do ‘pork barrel’ arrel’ spending; you bail out failing industries ustries and do things that make people e happy in the short term but don’t ’t deliver growth in the long term, m, effectively a return to 150 50 years of failed British regional al policy.”

Businesses found Cummings both a help p and a hindrance in advancing ng levelling up and the industrial dustrial strategy. “He gave a degree egree of attention to manufacturing uring which we might not otherwise se have got – he showed genuine interest terest and care … He saw manufacturing acturing as a big part of the solution,” n,” says an industry industr source. However, companies often fo found Cummings had an outdated outdate idea of manufacturing, which neglected neglect the shift to high-end, specialist speciali work. On top of that, the source says, he and a coterie of top advisers adviser typically took too much control, contro while refusing to let the ministers minist or officials nominally responsible respon write the policy.

“Dom “Do is like Michael Gove, a neo-conservative neo-con – they believe in power as a long as it is them wielding it,” says a veteran v Westminster watcher.

Steve Baker, Conservative MP and former minister, underlines the full horror of trying to achieve the key policies while keeping a lid on the public finances. fi “The money has run out, vast vas QE [quantitative easing] is being used u and the Treasury is in denial about a the relationship between QE and spending,” he says. “A rowing back of spending plans seems inevitable inevitab now the money’s gone, but there can ca be no rowing back in our ambitions ambitio for the country.”