Does the Levelling Up White Paper herald the Government’s conversion to social democracy?

February 3, 2022

Rarely can such an exemplary Government White Paper have been launched into such a cynical political mood. Yet reading the levelling up White Paper yesterday I found my belief in politics as a rational pursuit briefly restored. The paper is probably the most comprehensive of its kind from a Government on this subject. It is unusually clearly written for an official document, although It could have been more user-friendly in lay-out and structure. The White Paper is illuminating about the depth of the problem, honest about its intractability and thoughtful about avoiding the mistakes of the past.

It also had an unsectarian, almost cross-party feel about it. There were, it is true, a few of those tiresome, defensive, lists describing all the money the Government is splurging but there was also recognition of past successes by Labour Governments, such as the establishment of the National Institute for Health and Care Excellence (NICE) as my colleagues Robert Ede and Sean Phillips noted yesterday.

But I was soon jolted from my dream about the return of rationality to politics when I switched on the television and heard the predictable complaint from Labour that there was no significant new money, (plenty of already announced money, mind you). Some of the more wonkish critics also noted an overlap with the Government’s now deceased industrial strategy.

It is perfectly reasonable to point out that local authority budgets in 2019-20 were still in real terms about £60 billion below their 2009-10 levels, and too tempting not to note the billions lost to fraud at the height of the pandemic, but if money was the only issue we would not have almost the worst regional inequality in the western world. So what makes this attempt at levelling up more serious than all the other attempts over the last 100 years? It is the 12 missions (meaning targets) and the means, both by data and institutional framework, to hold Government accountable for progress towards them.

The Government has created a mechanism that forces it, or its successor (and who is going to abolish it?), to stick to the task and not quietly walk away when the going gets tough.  As the report itself states: “Past efforts have tended to be short-term, lacked scale and coordination, and were hamstrung by a lack of data and effective and effective independent oversight. Local leaders have also lacked the powers and accountabilities to design and deliver effective policies for tackling local problems… A new policy regime is needed to reverse these embedded historical trends. At root, that is about creating the right incentives, information and institutions to deliver profound changes to how decisions are made, where they are made and who makes them.”

So the Government is creating a new regime (curious word) to oversee its levelling up missions, establishing a statutory duty to publish an annual report analysing progress and a new Levelling Up Advisory Council with a mix of people from industry, finance and academia (including Tim Besley, Paul Collier and Alison Wolf), not to mention a new Government department largely dedicated to levelling up. Which is why it has been welcomed by Jim O’Neill of Northern Powerhouse fame.

Two other things distinguish this approach from the past. First the well trailed new round of devolution that is envisaged to cover much of the country not already served by some mayor-like arrangement, albeit without significant fiscal autonomy. Second the concern with pride in place, the importance of the look and feel of a place and peoples’ emotional attachment to it, and the explicit confrontation with the idea that you should have to “leave to achieve”.

The graduate brain drain — half of the young people from Grimsby who get degrees have moved away by age 27 — has in the past been accepted and even encouraged, social and geographical mobility were seen as synonymous and an inevitable product of residential higher education. This is no longer the case and the first four words of the report read: “Stay local, go far.”

Labour might complain about lack of significant new money but they would be better advised to welcome a Tory conversion to social democracy, offering themselves as more natural and capable managers of the process of national equalisation. The people with the more justified complaint are Tory free marketeers, some of whom were indeed grumbling yesterday, and although there is plenty in the paper about harnessing the private sector to the social goals of levelling up there is not much about actual markets and price signals in the report. But Steve Baker and others on the free-market side will be relieved to learn that Michael Gove’s claim to be ushering in a new economic model for the UK is just a rhetorical flourish.

Rhetoric that could have been more central to the report is the potential marriage of levelling up and net zero. The natural home of the green industrial revolution are the ex-industrial, and still to some extent industrial, parts of the country that most need new purpose and wealth and are also perhaps the most sceptical about net zero, or at least most reluctant to carry its costs. And one neat little policy virtuous circle, that I did not see mentioned, could be an insulation task force (and skills bootcamp?) for the least well insulated housing stocks in the country which are heavily concentrated in poorer areas.

There was also only a passing mention of the possibilities for levelling up opened up by more professional people working mainly from home and therefore not basing themselves in London or other metropolitan centres, to the potential benefit of depressed places with cheap but spacious housing and nice views.

The white paper had relatively little new on education and training and rightly focused on the long tail of failure in primary and secondary schools (about one third of pupils effectively fail their GCSEs) with 55 Education Improvement Areas put in special measures. There is a potential contradiction between the concern with graduate retention in poorer areas and the announcement of free school sixth forms in such places which are usually a vehicle into higher education and away. The white paper also missed an opportunity to reassure the Further Education colleges that they are beloved by the Government not merely in rhetoric.

There is a tug of war going on between HE and FE as to who is best placed to deliver the desperately needed level 4 and 5 higher technical “missing middle” skills. The Institutes of Technology are meant to bring both sectors together to deliver those skills but the HE institutions tend to dominate. Technical skill delivery is too important to be hamstrung by institutional competition.

The White Paper did a lot of pulling together of the multiple funding streams and initiatives that could reasonably be described as contributing to levelling up, but there is nothing wrong with reminding us of what is already out there, and even less wrong with promising to rationalise and simplify it. What might have been helpful, and might yet emerge from the consultation process, is some sense of the longer-term funding strategy for this enormously ambitious and long-term project after some of the pandemic related fiscal pressures are brought under control.

So we have analysis, targets, data, an institutional accountability framework, plenty of state funding for everything from free ports to R&D and obesity initiatives, even some Soviet style direction of civil service labour. There was surprisingly little about actual real businesses and the alchemy of how good jobs are created. But given how hard it is to shift deeply embedded economic patterns it makes more sense to focus on how the national and local state can use the levers it does have to pursue its 12 missions and hope the magic of the market and the spirit of the places that need levelling up can do the rest.


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