Let's not let levelling up lose the limelight

Spatial inequality in the UK

The level of inequality in social and economic conditions between the regions of the UK is a national disgrace. Not only is it unacceptable but is also avoidable. It has been tolerated for too long. It is for this reason that the UK2070 Commission was set up as an independent inquiry to conduct a review of the policy and spatial issues related to the UK’s development. With the changing global economic competitiveness of the UK, these inequalities are no longer just a cost on the economy but now have become a brake on it.

I therefore welcome the emerging consensus around the scale and depth of the problem of spatial inequality in the UK expressed in the Communique from the Government Outcomes Lab’s roundtable on tackling spatial inequalities. It is a timely reminder of a problem that cannot be ignored. The Communique reflects the unequivocal findings of the Levelling Up White Paper, that we must ‘end the geographical inequality which is such a striking feature of the UK.’

Now, however, the threat of economic recession risks bringing greater economic and social division. There will be an instinct on the part of some to rein in spending and investment to address inequalities. This would be a huge error. The UK2070 Commission concluded that, unless there is change, a sustained recession will deepen geographical inequalities and make recovery more difficult.

A prescription for change

Change is essential if we are to create high-quality employment and reap the economic rewards of a more productive and fairer country in the future. The ‘Tackling Spatial Inequalities’ Roundtable that took place at the University of Oxford rightly put great emphasis on learning from experience in attempts to rebalance the economic performance and level up social conditions in the UK. With important exceptions, the evidence is that too little has been done, too late.

The underlying problems are not just about the scale of resources but also about the way decisions are taken. This is important because, as Professor Philip McCann’s work has highlighted, the UK is an ‘outlier’ internationally in terms of its imbalanced economy. We must learn from others.

The Communique that came out of the roundtable highlights three critical areas of action where I think policy could and should go further to make their full contribution to a comprehensive and sustained strategy for levelling up:

Delivering effective devolution

True devolution will not be achieved without real fiscal devolution and levelling up access to funds. Therefore, a radical programme of comprehensive devolution is required which allows places to progress through different levels of autonomy according to local ambition, need & capacity, and for housing supply to be related to economic policy.

Recognising the latent potential of communities

This must include not only creating new global Centres of Excellence across the UK but also strengthening the foundations of local economies to allow initiative and to promote resilience & wellbeing, especially in disadvantaged areas. Therefore, in addition to increasing investment in RtD (Research to Development) in Higher Education, we need to put more effort into building the capacity of local leadership, their institutions, and harnessing local culture & environmental assets (for example, building on the experience of the Welsh Government’s Foundational Economy).

Setting out a National Outcomes Framework

The success in levelling up must be measured against target outcomes. Scotland and Wales already have national spatial frameworks and a range of performance indicators for example in terms of skills, connectivity and a just transition to zero-carbon. Yet in England the Government has no equivalent set of long-term ambitions. This gap in policy should be rectified.

Do not waste this crisis

It is imperative that the current policy aspirations do not end up as the latest in the long line of well-intended but failed attempts to rebalance the UK economy. If this is to be avoided, it will require large scale, comprehensive and long-term action to have any chance of success.

To deliver the above actions we must change the way decisions are made. Although the pandemic exacerbated inequalities and increased the urgency with which we must take such action, it has expanded greatly what is politically acceptable, and especially the widespread desire to go beyond what we had before. We must seize this opportunity, breaking free from inherited failed policies which entrench existing inequalities. We must start on a long path towards genuine re-balancing whereby every nation and region can reach their potential.