JEFFREY MATSU I’LL LEVEL WITH YOU
THE LEVELLING UP WHITE PAPER HAS GRAND AND WORTHY AIMS, BUT, WITH SOARING INFLATION SET TO BITE, HOW WELL-OFF WILL LEVELLED-UP PLACES REALLY BE?
Two years after breaking through the red wall with a promise to “get Brexit done”, Boris Johnson has, at long last, provided a roadmap to levelling up. The timing could not have been any worse with an economy now facing the potential upward spiral of prices. Meanwhile, tighter monetary and less accommodative fiscal policy will squeeze household finances, weighing further on the poorest. Central to the UK government’s levelling up ambition is its 12-point plan, made up of “missions” designed to spread opportunity, supercharge productivity and improve quality of life through a stronger local voice. Noble and worthwhile aims, of course, but such fundamental and sweeping change needs three essential ingredients to produce meaningful results: time, money and commitment. These are things which are not always in plentiful supply.
The levelling up white paper confidently sets out its objectives, but is less definitive on how government expects to achieve them. Knowing when you have arrived at a destination is sometimes obvious – train doors opening, a plane landing or a satnav prompt. But at other times we do not have these helpful signals to hand.
How will we know, for example, if we have a “globally competitive city in every area”? What does such a city look like?
Absent the government marking its own work, who decides?
Measurement, monitoring and evaluation are instrumental steps in the design and delivery of effective policy. Too often, competitive bids are evaluated at the bidding and project approval stage rather than over the project’s lifetime. This can encourage optimism bias and challenge accountability in project delivery. Improved evaluation is crucial for understanding the impact on hardto-reach groups, which are often those experiencing the greatest inequalities. But how do we measure outcomes that do not always lend themselves neatly to quantitative expression?
The technical annex to the white paper is a treasure trove of potentially useful indicators that are structured neatly around a framework which incorporates the six “capitals” driving growth and outcomes: physical, intangible, human, fnancial, socialand institutional capital. But data is only readily available for one of these, and at the subnational level three of the six capitals have “little to no established methods” of measurement. Given the intention to level up by 2030, this will present a lot of work for the Office for National Statistics.
If levelling up is to be a defining feature of this government, it would do well to provide local authorities the certainty and continuity needed to get on with the task. Little capacity remains within the system to absorb another sharp change in policy direction like that experienced with the industrial strategy that ran from 2017 to 2021. Beyond the grand vision must lay a funding structure that supports local autonomy within an allocative process that does not disadvantage smaller or less-resourced councils. A planning cycle that extends beyond a year would incentivise innovative thinking and collaboration as well.
The government must not forget that the inequalities it seeks to address today have been long in the making. The Industrial Revolution supported British manufacturing in centres such as Birmingham, Newcastle and Hull, only to be succeeded by a digital revolution (that they have struggled to escape). Meanwhile, rapid urbanisation and a shift toward a services-based economy have boosted the competitiveness and productivity of cities like London and Bristol. It will take decades, rather than years, to effect change under such strong currents.
Large and successful economies of various parts of society cannot be simply ordered or created overnight, but must be nurtured through a set of foundations that connect human capital, social wellbeing, infrastructure, innovation, the economy and the environment. CIPFA’s Investing in Regional Equality – lessons from four cities report looks at what has worked internationally, and how good measurement strategies play a role in the delivery of more sustainable outcomes.
In our report, one of the key factors evident across the case studies was an acknowledgement that scale and a longterm strategy are essential. In Cleveland, in the US, for example, the city’s flagship investment project for regeneration has a 20 to 30-year time horizon. This is notably longer than the UK government’s nine-year ambition for the entire country, which was announced with limited new funding.
As the UK embarks on two other flagship journeys towards Net Zero and creating a global Brirain, we need a more joined-up approach. Top-down, vertical siloes will need to give way to shared political will and partnerships that can come together around a common vision.
Against this backdrop looms a potential cost-of-living crisis not seen in 30 years. With inflation set to exceed 7% by the end of 2022, the desire to reduce the gap between the haves and have-nots may be overwhelmed by a necessity to help the poorest in society who are likely to become poorer still. Whether that is considered levelling up or basic survival will be the litmus test for how this government is judged.
“What does a globally competitive city look like? Absent the government marking its own work, who decides?”
Jeffrey Matsu is chief economist at the Chartered Institute of Public Finance and Accountancy