Mayors back call for a major shift in policy as new research finds 60% of the country still needs levelling up
New research shows that so far only £36 per person has gone to the parts of England most in need of levelling up from Levelling Up Fund, despite the divide between places growing
02 February 2022
Mayors Andy Burnham, Jamie Driscoll, Tracy Brabin, Dan Norris, Dan Jarvis and Steve Rotherham back call for a major shift in policy, following new research by the New Economics Foundation (NEF) that shows 60% of the country needs to level up. This includes places that have been held back such as Blackburn and Bradford and places that have grown but with limited improvements in living standards such as Bristol, Leeds, or Manchester.
Across these communities only £36 per person has been allocated through the government’s levelling up fund so far, despite the divide between places growing since 2019. Since December 2019, real incomes have risen by less than £20 per year in the north-east, £80 per year in north-west and £90 in Yorkshire and the Humber. By contrast, real incomes in London have increased by more than £600 per year and by more than £550 in the south-east.
Previous polling carried out by Opinium for NEF also shows that over half of people (58%) across the country, including 63% of people in the north, have seen no evidence of levelling up in their community since the 2019.
The report argues that to close the divide between places, pursuing growth alone by investing in physical infrastructure and attracting high-value-added firms into places will not be enough. Levelling up must focus on improving people’s lives and livelihoods in these communities.
To achieve this, it calls for five major shifts in economic policy:
- Shift from central direction to local control – with a radical transfer of powers over transport, housing, skills, employment support, business support, climate change and local taxation from Whitehall to town halls.
- Shift from growth to living standard – boosting incomes with an uplift to the National Living Wage to reflect the true cost of living and expanding access to local services and facilities that shape the social fabric of communities through a £15bn social infrastructure fund.
- Shift in focus on the everyday economy – creating good jobs and lifting wages in sectors such as retail, hospitality, care, and public services that exist in every place and make up 63% of all jobs.
- Shift to backing SMEs – boosting SMEs through access to affordable rents, finance, and business advice.
- Shift to green – supporting the transition to net zero with a £28bn a year green investment package, with 50% devolved to communities, alongside regional carbon budgets and just transition plans.
Tracy Brabin, mayor of West Yorkshire, said:
“These figures are very alarming and highlight the decades of underfunding those areas outside London have suffered. And the figures show that levelling up our country should now be an urgent priority for this government, so that people in West Yorkshire and the north have the opportunities they deserve.
What we need to truly level up our regions is a genuine commitment to devolution. That means the government committing to long term, flexible funding not forcing combined authorities and metro mayors to make ad hoc bids for pots of funding which must be done in competition with each other.
I do have confidence that Michael Gove wants to deliver levelling up and I want to work with him to make sure the changes that are needed are delivered. But what the north urgently needs is for this government to recognise that it’s not enough to just have a single champion in the cabinet, we need a ‘whole government’ approach. We need funding commitments and powers to create transport networks that are fit for purpose and connect communities and help them access opportunities. We need this to tackle the climate emergency in our own regions, we need this for skills and education so we can create good jobs and we need this to boost the cultural sector, so that we can make our regions even better places to live. It’s vital that this white paper contains these commitments.”
Jamie Driscoll, mayor of North of Tyne, said:
“Look after the pennies, and the pounds look after themselves. The same logic applies to businesses. Enabling SMEs to thrive lays the foundations for the rest of the economy. This report shows NEF’s thorough understanding of how the economy could work for everybody.
NEF have long been an advocate for devolution and it’s great to see it feature in this report. Devolution really can be the tool to deliver on levelling up. We know it. We live it, and we see the impact of devolution with our own eyes. Where the government has dictated programmes to our region they often miss their targets. Where we are asked to use our local knowledge and connections to deliver outcomes, we knock it out the park.
For the five economic shifts that NEF present I could give examples from the North of Tyne Combined Authority. Imagine what we could do with more money and devolved powers.”
Dan Jarvis, mayor of South Yorkshire, said:
“Two years after the Tories made levelling up the centrepiece of their general election campaign, regional inequality is actually growing. If this agenda is to be more than a hollow promise, the government has to invest for the long-term and at scale – not just in infrastructure but in public services, skills, and the environment. They have to trust local communities to lead, as they have failed to do so far.
This is not about handouts. We’re already forging ahead with realising South Yorkshire’s huge potential. But this white paper is a last chance for the government to show it is serious about levelling up, and with a few exceptions, it is looking like just another missed opportunity.”
Dan Norris, mayor of the West of England, said:
“This report is timely and welcome. It is vital that government policy seeks to benefit communities in need north or south, east or west.
As West of England metro mayor I am proud to have launched our £50m Green Recovery Fund. We are going to retrofit more of the beautiful Georgian and Victorian townhouses and stone cottages of Bath, Bristol and our amazing market towns and villages. We will kick start electric vehicle infrastructure. But this is a tiny fraction of what’s required.
The government needs to step up and show they are serious with a radical devolution of real powers and resources.
I love the West of England, I’m ambitious for its future, and I’ve got radical ideas on how to make the place I’m proud to call home the best it can be. So my message to government is simple, please give me and my metro mayor colleagues the tools, and we’ll get on with the job. That will be great for the West of England and for GB PLC.”
Steve Rotheram, mayor of the Liverpool City Region said:
“This research shows government’s levelling up agenda for what it is: lots of empty words and very little by way of the systemic change we were promised. The funding allocated so far pales into insignificance when compared to the funding stripped from northern communities over the last decade. Levelling up fails on its own terms when funding isn’t even being targeted at the areas the government themselves have said are in most need – like Knowsley in the Liverpool City Region for example.
Levelling up has to be about more than just big spending announcements and shiny infrastructure projects. To mean anything, it has to tackle long-standing structural inequalities. From healthcare and job prospects, to transport and infrastructure spending people’s lives can be radically different based on where they happen to be born. This is not an issue of party politics but one of fairness and social justice.
The real levelling up agenda is being delivered by local leaders across the north, who are working to make our regions greener, fairer, stronger and more sustainable. Levelling that playing field would not only be good for local areas, but for the UK as a whole. With proper support and a real national commitment.”
Miatta Fahnbulleh, chief executive at the New Economics Foundation, said:
“Against the backdrop of over a decade of squeezed living standards, the goal of levelling up should be quite simple: to lift living standards, particularly in communities that have faced decades of deprivation and neglect.
“There is no silver bullet to a problem that is as complex and difficult as closing the divide between people and places. But without a major shift in policy as we’ve recommended in our new report, levelling up will continue to elude this government.”
Notes to editors
The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.
The full report Closing the Divide: How to Really Level up the UK will be available at https://neweconomics.org/2022/02/closing— the— divide from 06.00 Wednesday 2 February 2022.
Previous NEF analysis on widening inequality is available at neweconomics.org/torn— apart
Opinium carried out a nationally representative survey of 2,042 UK Adults between 9th and 10th December 2021. Full polling available at https://www.opinium.com/w… – 12 – 15.xlsx or https://neweconomics.org/2021/12/over— half— of— people— across— the— country— including— 63— of— people— in— the— north— have— seen— no— evidence— of— levelling— up— in— their— community— since— the— 2019— general— election
In this report we use Nomenclature of Territorial Units for Statistics level 3 (NUTS3) units for geography, which correspond to counties or groups of unitary authorities. We use a regional per capita measure of income based on the household sector of GDP from national accounts data as our proxy for household income.
For illustrative purposes, we apply our framework across our NUTS3 geographies in England. Viewed through this lens, around 60% of English counties or grouped unitary authorities might be initial candidates for levelling up (Table 1).
We provide an analysis of per person funding allocated from the Levelling Up Fund to date across the 3 categories of levelling up need. £1.35 bn has been allocated from the fund to date across England. Across the 2 category of places we assess as having highest levelling up need — Held Back and Disconnected Growth – an average of £36 per person has been allocated.
Allocation of Levelling UP Fund across different categories of levelling up need | |||
Category of places | Average funding per person within categories | Total Levelling Up Fund allocated to date | Total population in each category |
Relative prosperity | £7.68 | £184,821,865 | 24,080,186 |
Disconnected growth | £21.68 | £200,823,426 | 9,263,616 |
Held back | £41.62 | £965,788,632 | 23,206,336 |
England total | £23.90 | £1,351,433,923 | 56,550,138 |
Disconnected growth or Held back | £35.93 | £1,166,612,058 | 32,469,952 |
Source: NEF analysis based on ONS, Mid-Year Population Estimates, UK, June 2020; https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1034498/LUF_bidders_list.ods
