For two and a half years, it was like waiting for Godot. But the levelling up white paper is finally here. So was it worth the wait?
First, the good points: the plan’s ambitions are clear, and there are things to praise within it. For one, the notable shift of focus to improving living standards rather than simply targeting growth. Legally binding “missions” to improve wellbeing across the country, close the gap in healthy life expectancy, narrow the attainment gap and boost wages and jobs are all a step forward. They show that the government has finally understood that its previous strategy of pursuing growth above all else failed to improve the lives and livelihoods of people in the country that most needed it.
Equally important are plans to create regional mayors across the country with new powers to deliver economic change. But full details on what powers will actually be devolved are glaringly absent. And that is the problem with the white paper: the ambition is clear, but how the government will deliver on its promise to close the divide is still unclear. Over 300 pages of policies cobbled together from across Whitehall that do more of the same simply won’t cut it. Recycled infrastructure spending, innovation hubs, and high street task forces are all well and good, but they simply repeat the old remedies that successive governments have tried and failed to close the divide.
The bottom line is that levelling up simply won’t happen without a major shift in policy. For us at the New Economics Foundation, this must start with the devolution revolution that Michael Gove has promised. But rather than ad hoc devolution deals and centrally controlled funding pots for new schemes, we need a radical transfer of powers over transport, housing, skills, employment support, business support, climate change and local taxation from Whitehall to town halls. The challenges faced in Bradford or Manchester are different to those faced in Darlington or Barnsley. Pushing control over money and economic decisions to leaders that know their patch is the first step to levelling up.
Local power and control must be matched by a big injection of investment into our communities. The government simply cannot level up on the cheap, especially after a decade of cuts to council budgets. Why not create a £15bn social infrastructure fund to plough much-needed investment into public services and local facilities that people depend on? Or bring together the government’s goal of net zero and levelling up? We know that there is no path to net zero without public investment. So why not invest £28bn a year into our communities to create green jobs, boost green industries and remake places? This would create a much-needed stimulus to local economies and enable places to revive their communities as they rapidly decarbonise.
There must also be a new focus on boosting incomes and creating good jobs in the parts of the economy that are often overlooked but form the backbone of local economies. Sectors such as retail, hospitality and care exist in every place, and make up 63% of all jobs. An uplift to the national living wage to reflect the true cost of living, for instance, would push up wages in these low-paid sectors and put money into the local economy. Equally important will be a new focus on small and medium-sized enterprises that account for over half of the jobs created across the country and almost two-thirds of private sector jobs in the north-east and north-west. Access to finance, targeted business support and affordable rents will be key.
There is no silver bullet to a problem that is as complex and difficult as closing the divide between people and places. But as real incomes in London have grown by £600 a year since 2019, compared to £90 in Yorkshire and Humber and £20 in the north-east, the country is being torn apart. The government must now shift from laudable pledges to action. Without a major shift in policy, levelling up will continue to elude it.
Miatta Fahnbulleh is chief executive of the New Economics Foundation
