Connor MacDonald

Head of Economics and Social Policy Read Full Bio

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The Queen’s Speech and Levelling Up: Anyone for Governor of Wessex?

May 13, 2022

 

The Queen’s Speech included a major Levelling Up and Regeneration Bill, which was introduced in the Commons this week.

The Bill covers a huge range of policy space, similar to the Levelling Up White Paper tabled in February. In fact, many of the proposals are those put forward in the White Paper. For example, there will be a requirement for the Government to release annual reports on the Levelling Up “missions”, creating a framework to devolve power through ‘devolution deals’ in every part of the country by 2030, and greater local input in planning. The Government will also use the bill to reform how local infrastructure is funded by a new “infrastructure levy” which will give local communities more input in how the money is spent, compared to the existing Section 106 process.

This Bill comes at a dangerous time for the Government. The cost-of-living crisis has brought a number of macroeconomic questions into play, such as inflation, monetary policy, productivity and growth. These might complicate the economic narrative around Levelling Up, which is predicated on higher levels of public spending to close economic gaps between the highly productive areas of the UK and the less productive areas of the UK. These problems are inherently long-term; in the grand scheme of things, even the 2030 mission targets for Levelling Up are quite near. The acuteness of the cost-of-living crisis risks diverting attention in the short-term even though addressing Britain’s productivity gap is urgent and vital.  Nevertheless, boosting productivity won’t necessarily solve the current inflationary problem.

The other difficulty for the Government is illustrated in the Levelling Up Bill’s clauses relating to the titles for the new leaders of the devolved regions. The Bill suggests that titles might be Mayor, County Commissioner, County Governor, Elected Leader, Governor and “a title that the CCA considers more appropriate…”. The flexibility here demonstrates a problem that’s bedevilled local government in England for a long-time: the sheer complexity of the system makes it difficult for Government to devolve efficiently, and ultimately hampers efforts to ensure strong local control. Hopefully, the tiered devolution framework outlined in the Bill will mitigate this by creating clear routes for changing governance arrangements and moving between devolution tiers.

The other important point to make in relation to the Levelling Up and Regeneration Bill is the fact that place-making is (rightly) seen as central, rather than peripheral to the role of local leadership. The street votes proposal and the ability to set out design codes, originated at and championed by Policy Exchange, as well as a more flexible infrastructure levy and powers to auction vacant properties demonstrate that the Government recognises the inherent need for communities to define for themselves the course of their development. However, it should be noted that without greater fiscal powers, this flexibility will be inherently limited. Looking at greater fiscal flexibility is on the agenda at Policy Exchange.

Finally, it is importantly to underline, and it is right that the Government recognises, that Levelling Up and place-making are ineluctably political. There has been some criticism, especially from the left, that the levelling up targets enshrined for monitoring in the Bill can be changed and will not be legally binding. This is right – place-making is a flexible, political process that should not be inflexibly bound by a legal regime. Instead, the better way forward would be to empower local democracy through stronger local authorities – the kind of institutions Britain had at the heigh of its economic power. Again, this is a major area of consideration for Policy Exchange, and we will continue to put forward policies that highlight the necessity of local place and local politics.

Connor MacDonald

Head of Economics and Social Policy Read Full Bio

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