Zero chance of ‘levelling-up’ working in the current system, says major new report

The research, conducted as part of the LIPSIT (Local Institutions, Productivity, Sustainability and Inclusivity Trade-offs) project by the cross-party think tank Demos and the Universities of Birmingham, Cardiff, Surrey and Warwick, identifies several problems with the current system for managing local economic policy and suggests a new framework in which levelling-up should be possible.

The Achieving Levelling-Up report [published 18 November 2020] shows that there are several barriers to tackling regional inequality which urgently needs to be tackled, including wasteful processes in local and national institutions, a lack of long-term strategy due to fragmented funding from central government, and an insufficient level of accountability of those who are currently responsible for delivering growth, such as Local Enterprise Partnerships (LEPs) and Combined Authorities (CAs).

To address these issues, the report recommends eight steps for central government to take. These steps would provide a more successful framework to implement the Government’s flagship levelling-up agenda:

1. State the intention to create strong local institutions over the next two to three years.
2. Set out a framework for who should be making which decisions, from a local or central level.
3. Identify which authorities should form the basis for these institutions. This would be Mayoral Combined Authorities where they exist or alternatives where they do not.
4. Set shared national objectives with these authorities and, with a national budget, organise single pot funding to allow authorities to fulfil these objectives.
5. As part of this process, the centre should play an ongoing leadership role to coordinate and guide regional policy.
6. Work with these institutions to invest in capability development and shared resources.
7. Put accountability systems and metrics in place through collaborating with the local institutions.
8. Together, create an overall brand for levelling up that creates expectations and support amongst the public.

The report concludes that levelling-up will be difficult but possible. Achieving it will require strong local institutions and strong leadership from central government.

Commenting on the findings, Charles Seaford, Senior Fellow at Demos and co-author of the report, said:

“The intention to level-up was at the heart of the Government’s policy agenda when they won the General Election in 2019. And we’ve been hearing even more about regional inequality since the regional responses to Covid-19 came into force recently. But the answer to the question of levelling-up is not a simple one. The answer is not simply more funding: it requires a shake-up to the current system, new structures to facilitate joint objective setting, more accountability, and changes to the way success is measured.

“Without a combination of these improvements, there is no clear path ahead for levelling-up. This has been a long-standing issue through successive governments, and we hope that central government will finally take leadership on this agenda, and make the true change which has been highly anticipated for too long.”

Professor Nigel Gilbert, co-author from the University of Surrey, said: 

“We all want to build a society that gives people, in all areas of the country, an equal opportunity to thrive. To help the country level up, we need to have an honest assessment of the current systems and structures – particularly in the local context – and ask whether they are sufficiently funded and whether they are accountable for their successes and failures.”

Read the full report (PDF) to find out more.