Ahead of the release of the Government’s White Paper – We take a deeper look at levelling up, how it is different to what has come before and what it needs to be successful.

Government intervention to address differences in economic performance and quality of life across the country is not new. From the post-depression industrial estates of the 1920s to the ambitious strategies to close the North-South divide in the 1990s and 2000s, successive Labour and Conservative administrations have tried to bridge these gaps. It is once again front and centre of government policy.

Under the banner of levelling up the government is looking to achieve the twin goals of:

  • reducing the differences in the prosperity between places
  • empowering people by extending the economic opportunities available to them in the places they call home.

As the government continues to work on its much-anticipated white paper, we look at how levelling up differs from previous approaches and what we believe to be the key elements of its successful delivery.

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“Levelling up is a long-term project that will require systemic interventions. While government will need to make big moves, its success relies on every stakeholder playing their part. We must all be open minded and ready to support where necessary. The White Paper represents just the first step on a much longer journey".

Phil Woolley, Partner

What is new about levelling up?

Levelling up is not a rebadging of previous initiatives.

This is because the context for intervention has changed in two major ways:

  • Brexit and COVID-19 are systemic shocks to the entire economy, but their impacts  across the country are very different
  • We now understand much more about the complexity of this differential success across the UK, and the drag effect of local and regional inequality on national economic performance

This joint focus on people and place is more explicit in the language around levelling up than we’ve seen in government policy statements for some time. This is because two decades of what might be termed 'top-down' interventions: from the establishment of the Regional Development Agencies under Labour, to initiatives such as the 'Northern Powerhouse’ and 'Midlands Engine’ under the Conservatives, have largely been about refining the architecture of economic development capability. Creating the capacity to formulate and implement policy is essential, but it can look abstract if it’s not accompanied by early, tangible change in the standard of essential services and quality of life in local communities.

What marks levelling up out as different is its intense focus on real lived experiences. HM Treasury’ Build Back Better strategy describes it as “improving everyday life for people in those (left-behind) places”. As a result, Ministerial statements on the purpose of levelling up convey a definite sense of urgency on not only the need for change, but also the pace of it. Whilst national economic strategy continues to identify the need to close the productivity gap through, improving infrastructure, deepening the skills base and capturing export opportunities of new technologies. What’s really key is the translation of these efforts into everyday wins. People want well paid, sustainable jobs to secure the future of their families, but they also want their local high street to recover so that their community can thrive. They want to see positive momentum.

How can government deliver levelling up?

For levelling up to be successful it must:

Recognise the importance of place

Recognise the importance of place

Build local resilience and define priorities for action

Build local resilience and define priorities for action

Tailor interventions to meet specific needs

Tailor interventions to meet specific needs

Recognise the importance of place

A real understanding of place: its variety across the country, is pivotal to breaking down historical barriers to these changes

One issue for the regional development agencies and ‘Northern Powerhouse’ was the very ‘top-down’ approach to spatial strategy –  remote from the everyday lived experience of many people. The idea of the ‘north’ was unable to capture the huge diversity and distinctiveness of places and economic activity across more than ten million people. This is also true of the ‘south’. Many seaside towns continued to struggle economically and policy assumptions based on success at regional level made them feel invisible.

This long, and variable, track record of government intervention in the fortunes of places across the country is vital context for policy makers’ current approach to it. Communities expect things to be different in the future: tangible change or evidence of clear progress towards it needs to be delivered. Quickly.

Build local resilience

To help define priorities for action, there are four cross-cutting themes that can be identified to underpin the efforts that will deliver the tangible change in the prosperity and confidence of places that local communities seek.

Four themes to focus on:

  • Four themes to focus on:

    Authenticity

    A real understanding of place, using local knowledge and data analytics

    Real understandings of place are often downplayed in favour of other ideas of ‘best practice’ or apparently low-risk policies from elsewhere. The complex geography of prosperity between regions and within them means that combining the latest data analytics and traditional local knowledge is essential to understand communities and their priorities for action.

  • Four themes to focus on:

    Agility

    Readiness and flexibility to respond to new challenges

    The robustness of local institutions’ decision-making processes and operational expertise is often identified as a key determinant of their ability to deliver results on the ground. But given the unprecedented levels of economic uncertainty as we emerge from the COVID shock, are local authorities and their partners also ready and flexible enough to respond to new opportunities as they arise? Government will demand greater responsiveness to new circumstances in return for the significant funding that accompanies levelling up, so identifying opportunities and capturing their benefits should be at the heart of policy implementation.

  • Four themes to focus on:

    Capacity

    Delivering projects to build trust across central government and local communities 

    Successful places are able to integrate the local skills bases, expertise, and knowledge in the service delivery network as part of a genuine understanding of place, that enables policies to be implemented quickly and effectively. This capacity to deliver is essential for generating trust across central government and local communities that new streams of public money will be spent well to deliver tangible progress. Authenticity and agility are pre-requisites, but mobilising these resources and developing the deep understanding of place to deliver what local people expect depends on leveraging all of the expertise and resources available.

  • Four themes to focus on:

    Risks

    Mitigating risks and managing expectations about realistic scales of change

    Communities expect tangible results from levelling up, not promises of more attempts to close the prosperity gap. To achieve this, institutions must mitigate risks and manage these expectations about the scale of change that’s possible in a short period. Are institutions resilient enough to learn by doing and avoid returning to old orthodoxies if progress is challenging? This appetite for results means that explaining the scale of the task and the potential rewards for local communities has never been more important. Building resilient local coalitions focused on outcomes is essential for long term progress.

Tailor interventions to meet specific needs

One well-made critique of previous approaches to regional economic development was that they often paid more attention to the mechanisms of distributing public money and selecting projects to move forward instead of actually meeting the needs of local communities and capitalising on opportunities in different places.

It is important that levelling up recognises the need to vary approaches at different scales, and in ways that are sensitive to the demands of different local places and communities.

What can we learn from City Deals?

Perhaps the most useful outcome of the now decade-long experience of City Deals is that we do have to think about them as deals: requiring effective negotiation between local and central government beyond the application of funding formulas or competitive bidding for individual pots of money. Successful negotiation requires trust, built up from the application of real knowledge and expertise to ensure a track record of delivery on the ground.

As devolution in England continues to extend from city regions to counties, deal-making will become as much of required skill for local policy-makers as the technical aspects of maximising funding settlements.

City deals have taught us that patient, consistent work on long term core challenges, developing adult skills, improving access to jobs and the agility to capture investment opportunities, is vital for delivering a successful policy. Traditional concern about ‘picking winners’ needs to be overcome through cutting edge analysis to help places understand their own competitive opportunities.

What happens next?

The White Paper is the first step in a long journey.

Build Back Better requires a broad array of smaller interventions, with more variety between places, to become a reality. Beacon projects to attract local support will continue to have a significant role, but should not be central to the agenda. There will always be a place for a new museum or signature building at the heart of a community’s sense of pride, but ensuring an old department store finds a new use and helps create local employment is also crucial.

Levelling up isn’t just about the ‘big wins’, it’s about ensuring as many opportunities, big or small, are taken in as many places for as many people as possible.