Levelling up: delivering government’s key policy

Government intervention to address differences in economic performance and quality of life across the country is not new. From the post-depression industrial estates of the 1920s to the ambitious strategies to close the North-South divide in the 1990s and 2000s, successive Labour and Conservative administrations have tried to bridge these gaps. It is once again front and centre of government policy.

Under the banner of levelling up the government is looking to achieve the twin goals of:

• reducing the differences in the prosperity between places
• empowering people by extending the economic opportunities available to them in the places they call home.

As the government continues to work on its much-anticipated white paper, we look at how levelling up differs from previous approaches and what we believe to be the key elements of its successful delivery.

What is new about levelling up?

Levelling up is not a rebadging of previous initiatives.

This is because the context for intervention has changed in two major ways:

• Brexit and COVID-19 are systemic shocks to the entire economy, but their impacts  across the country are very different
• We now understand much more about the complexity of this differential success across the UK, and the drag effect of local and regional inequality on national economic performance

This joint focus on people and place is more explicit in the language around levelling up than we’ve seen in government policy statements for some time. This is because two decades of what might be termed 'top-down' interventions: from the establishment of the Regional Development Agencies under Labour, to initiatives such as the 'Northern Powerhouse’ and 'Midlands Engine’ under the Conservatives, have largely been about refining the architecture of economic development capability. Creating the capacity to formulate and implement policy is essential, but it can look abstract if it’s not accompanied by early, tangible change in the standard of essential services and quality of life in local communities.

What marks levelling up out as different is its intense focus on real lived experiences. HM Treasury’ Build Back Better strategy describes it as “improving everyday life for people in those (left-behind) places”. As a result, Ministerial statements on the purpose of levelling up convey a definite sense of urgency on not only the need for change, but also the pace of it. Whilst national economic strategy continues to identify the need to close the productivity gap through, improving infrastructure, deepening the skills base and capturing export opportunities of new technologies. What’s really key is the translation of these efforts into everyday wins. People want well paid, sustainable jobs to secure the future of their families, but they also want their local high street to recover so that their community can thrive. They want to see positive momentum.

To help define priorities for action, there are four cross-cutting themes that can be identified to underpin the efforts that will deliver the tangible change in the prosperity and confidence of places that local communities seek.

What can we learn from City Deals?

Perhaps the most useful outcome of the now decade-long experience of City Deals is that we do have to think about them as deals: requiring effective negotiation between local and central government beyond the application of funding formulas or competitive bidding for individual pots of money. Successful negotiation requires trust, built up from the application of real knowledge and expertise to ensure a track record of delivery on the ground.

As devolution in England continues to extend from city regions to counties, deal-making will become as much of required skill for local policy-makers as the technical aspects of maximising funding settlements.

City deals have taught us that patient, consistent work on long term core challenges, developing adult skills, improving access to jobs and the agility to capture investment opportunities, is vital for delivering a successful policy. Traditional concern about ‘picking winners’ needs to be overcome through cutting edge analysis to help places understand their own competitive opportunities.