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Levelling Up in an Unsteady Political and Economic Climate

By Sarah Cox, Carter Jonas

This time last year, the Levelling Up White Paper was eagerly awaited as a fulfilment of the then Prime Minister’s pledge to his ‘Red Wall’ supporters. But the White Paper and the Levelling Up and Regeneration Bill which followed in May were received with disappointment here in Leeds.

In the ensuing months, political chaos, the cost-of-living crisis, and now a return to austerity have dominated the political agenda. So where does that leave levelling up, and are we likely to see any impact in what remains of this Parliament?

Levelling up was heralded in the 2019 Conservative Party manifesto as the answer to economic imbalances across the UK. The policy set out twelve missions to be achieved by 2030: increased pay, employment and productivity; public investment in R&D outside south-east; London-style public transport connectivity across the country; nationwide broadband; fixing the education gap; skills training; narrowing the life expectancy gap; increasing wellbeing; decreasing inequalities; a rise in first-time homebuyers; crime reduction, and devolution in England.

The recent political hiatus has thrown progress off-course and created considerable consternation, not least in its impact on the economy. The return of Michael Gove as Secretary of State for Levelling Up provides some reassurance that its overall direction of may be maintained.

But austerity which, we have been warned by the Chancellor, will be ‘eye-watering’ and ‘painful’, poses a substantial threat. Levelling up may be a high political priority, but how will its funding compete with that of health, social and education? There’s a clear correlation, and ample statistical evidence, to demonstrate the impact of health and social policies on the economy, but less so levelling up.

Furthermore, most of the pledges made, specifically in planning and development, require substantial resources in their early stages, and the benefits are often not discernible for decades.

The Levelling Up and Regeneration Bill may struggle to get onto the Statute Book before the next general election. As the 2020 Planning White Paper demonstrated, planning is rarely straightforward politically – especially, as in this case, when legislation proposes a more centralised approach. As the Government has found repeatedly, delivering housing and infrastructure growth may appease one element of the electorate, but in doing so will invariably upset another, and consequently it is difficult to arrive at a political consensus.

So is there the time and resource for this grand political statement to achieve both its stated missions and its less overtly stated (but nevertheless key) objective of winning over the North a second time? Of course levelling up is much more than planning, but in talking to my clients in this sector, I get the impression that the economy and net zero are of greater immediate concern, and among the wider electorate the cost of living poses a more immediate concern.

When the Levelling Up, Housing and Communities Committee considered the Bill in the summer, it identified an absence of funding for its specific missions relating to public transport and local connectivity, digital connectivity, improving education outcomes, adult skills training and increasing healthy life expectancy. And consistent with the common accusations of statement over substance, it criticised the Bill for a lack of detail.

For voters in the North, these are the issues on which levelling up will be judged and so the Bill will require some substantial changes in order to win their vote.

The ultimate litmus test is Bradford station. Research has demonstrated that regarding income, productivity and skills and qualifications, investment in levelling up in Bradford would facilitate a greater impact than in any other large town or city. Bradford has a young population and is in close proximity to Leeds. Having lost out following the HS2 decision, most recently it was due to benefit from a station on Northern Powerhouse Rail line, but there now appears a question mark over this decision, with potential impact upon Bradford’s future prosperity.

Housing targets continue to pose substantial political difficulties for the Government, largely because of the presence of a vast national target which is seems is impossible to roll-out across the country. But in areas such as this where the electorate is largely in favour of growth, levelling up, through regional devolution, has the potential to progress housing and in doing so, bring about growth. However, large scale housing can only be delivered in the context of sustainable transport links. There’s a strong argument in favour of more local authority funded housing, but may not be deliverable with cuts being made to every Government department. Another important litmus test of levelling up will be continued funding for Homes England – again, a key element of the Government’s original commitments.

A further initial policy which has already fallen by the wayside is a form of expedited development ‘zone’ – first freeports and more recently investment zones. Although we had reservations about the implementation of investment zones as concerns the environment and affordable housing, the new Prime Minister’s decision to substantially alter investment zones is a blow to those areas which had applied for investment zone status in the hope of benefitting from rapid economic growth.

To facilitate true regeneration in the North, infrastructure is key. Unfortunately the huge potential is invariably thwarted by long timescales and commensurate costs. While new sustainable public transport would invariably drive growth and in doing so, address many social and economic issues, the delayed return on investment, together with public spending cuts makes schemes such as Northern Powerhouse Rail and the HS2 extension to Leeds less likely.