What does the Levelling Up White Paper mean for Reform of Government?

February 2, 2022

The second chapter of the Levelling Up White Paper is entitled “systems reform”. Its central contention is that any policy regime aimed at “levelling up” opportunity across the United Kingdom must acknowledge the complex and interconnected economic, social and institutional factors that shape regional disparities. Crucially, it acknowledges that it will be impossible to “level up” the United Kingdom unless the machinery of government is reformed in the process. The White Paper promises “root and branch reform of government and governance in the UK”. Does it deliver?

It is pleasing that the White Paper includes a series of commitments on devolution. Given that it began life in 2019 as a White Paper on devolution and local recovery, it is perhaps unsurprising that it aims to empower local government. As Policy Exchange’s Senior Fellow, Ruth Kelly, argues “regeneration will need strong local leadership which understands the unique strengths of its area, and can convene and broker agreements across public, private and voluntary sector.” It is for this reason that the establishment of a new devolution framework is particularly welcome.

The Government’s commitment to move 22,000 Civil Service jobs and 50% of UK-based Senior Civil Servants out of London by the end of the decade also features prominently. A series of extensive independent reviews exploring the effects of government relocation have been commissioned in the past. These stretch from the Fleming Review (1963), via the Hardman Review (1973) and the Lyons Review (2004) to the Smith Review (2010).  Measures to reshape the geographical distribution of civil servants can lead to efficiency savings, encourage economic growth outside of London, allow the civil service to access new labour markets, and help to challenge the perspectives of civil servants by bringing them closer to the people they serve.

Through the Places for Growth Programme, 15 departments have already announced relocation plans. The White Paper outlines further commitments: DCMS will move to Manchester (bringing it closer to the creative, digital and tech cluster that has developed there in the last decade) and the Ministry of Justice will establish operations in Wrexham, North Wales. Pleasingly, it also made it clear that the Government has decided to target Arms-Length Bodies (ALBs) for relocation. No new ALBs will be located in London, unless strictly necessary.

However, there are risks against which the Government must mitigate. The relocation of the Office for National Statistics to Newport in Wales resulted in the loss of 90% of its staff, the detrimental impacts of which were highlighted in the Bean Review of UK Economic Statistics. Likewise, relocation can have high upfront costs, estimated in the Smith Review in 2010 as being up to £40,000 per person before property costs. Indeed, the otherwise successful relocation of the Met Office went almost £8m over budget. As Policy Exchange has argued in the past, the Government should commission work to estimate not only the cost of proposed moves but also to identify ways in which these costs could be reduced.

The White Paper also outlines plans for new UK Levelling Up Directors. Such directors will act as a single point of contact for local leaders and will make it easier to align central and local objectives. Such directors will hopefully bring central government closer to local realities, thereby creating a virtuous circle of co-designed policies and local delivery.

Most importantly, the White Paper seeks to “embed” Levelling Up throughout the activity of central government. A “Levelling Up” Cabinet Committee has already been established and the Green Book has been revised to ensure that the Treasury’s appraisal practices don’t undermine the levelling up agenda. Crucially, every Department’s Outcome Delivery Plan (ODP) will be updated to include the Government’s levelling up commitments. As Policy Exchange have argued in Government Reimagined, the renewal of Permanent Secretaries’ contracts (currently on a fixed tenure) should be dependent upon meeting the targets established in ODPs.

The Government has announced that it will redress Britain’s historic underinvestment in infrastructure, with £600 billion of gross public sector investment over the next five years. This commitment to local infrastructure permeates the White Paper. Whilst departments are now required to publish Full Business Cases (FBCs) for infrastructure proposals, it is essential that it recruits project managers who are capable of overseeing such unprecedented levels of infrastructure spending. As Policy Exchange have argued in the past, the Government must dramatically increase the number of SROs (Senior Responsible Owners who oversee project implementation), many of which should be appointed from outside government. It must also introduce formal limits on the number of projects on which SROs can work at any one time and ensure that SROs have direct access both to their Permanent Secretaries and to local leaders.

Past national crises have precipitated effective and lasting reforms to government in the United Kingdom. In the aftermath of the COVID-19 pandemic, it is welcome to see the White Paper grasp the opportunity to re-evaluate the processes, organisational design, structure and culture of government.

For more of our analysis of the white paper, please click here


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