Of course, the commitment to tackling regional disparity helped Johnson’s government secure a landslide victory at the 2019 election, winning traditionally Labour-held seats in the north of England and the midlands. But the slogan was, from the start, deliberately slippery — intended to subvert anti-Westminster feelings for Boris Johnson’s own political ends.

In fact, levelling up was Johnsonianism distilled: a catchy slogan, a few billion quid and a monument to point to at the end of it all. It meant high-spending, headline-grabbing infrastructure projects. This aspect of Johnson’s political nature was summed up neatly by Dominic Cummings in an interview for the New York Magazine last year: “The only thing he was really interested in — genuinely excited about — was looking at maps. Where could he order the building of things?”.

In short: as long as shovels were in the ground, Johnson thought he was winning. The bidding war incited by the levelling up project would see communities pitted against each other, pining for Johnson’s attention. The PM would then tour the country, pointing to the physical markers of his success. His legacy would be writ in stone across Britain’s high streets. “Thank you Boris”, Britain would collectively bay.

But, bluster aside, the Conservative party’s political responsibility when it came to “levelling up” remained profound. Many of Johnson’s converts in 2019 placed their trust in the Conservatives for the first time and, as PM therefore, Johnson needed to make real gains to ensure such voters didn’t swing back to Starmer’s Labour. Thus, just as Brexit was declared “done” in 2020, levelling up was newly sold as Johnson’s “defining mission”. 

However, in mid-2022, questions arose over how “levelling up” would survive the upending of its prime patron. And the project emerged as a key talking point during last summer’s Conservative leadership contest. 

It was clear that Liz Truss’ small state and low tax vision was failing to match the political energy Johnson had piled into the scheme; but Rishi Sunak’s fiscal conscientiousness, likewise, had been viewed as a roadblock to the project while at the Treasury. (The video of the soon-to-be runner-up boasting about how he had fiddled funding formulas to take money out of “deprived urban areas” did not help his case).

In this way, while the very idea of big-spending infrastructure projects was central to Johnsonianism, “levelling up” — as a high-spending creed — appeared to jar with Sunak’s most basic political instincts. 

It is perhaps unsurprising, therefore, that the so-called “levelling up agenda” has not featured prominently during Sunak’s premiership. Spiralling crises around industrial relations, public services and illegal migration have also squandered much of the PM’s political energy.

But this is not to say that Sunak has escaped criticism for failing to make strides on regional disparity. Indeed, after the last round of levelling up funding in January, analysis found that large sums of the headline £2.1 billion funding package were going to areas with relatively low levels of deprivation. It also highlighted that, of the £1.9 billion of spending that could be linked to individual constituencies, £1.2 billion — around 63 per cent — had gone to seats held by Conservative MPs.

It seemed to expose, (1), levelling up as a mere electoral gambit and, (2), Sunak’s abjuration on the stated vision of his predecessor-but-one. Combine this with stories that Conservative MPs have been told to use phrases such as “stepping up”, “gauging up” or “enhancing communities” in lieu of “levelling up”, and Sunak himself seems far from taken by the project. 

With this debate rumbling on in the background, the report which appeared in the Independent this week, suggesting HS2’s second leg from Birmingham to Manchester could be shelved, begs some important questions. Indeed, it comes after the government was criticised for quietly slipping out news that work on the leg between Birmingham and Crewe was being put on hold in March. 

As for the government’s line on the report, Home Office minister Chris Philp insisted this morning that “the levelling up agenda is steaming ahead”. But he conspicuously refused to commit his government to HS2’s northern leg, viewed by many as integral to the project.

To be sure: the government’s flagship high-speed rail project predates the “levelling up” slogan. In fact, it was in 2012 that the then-transport secretary Justine Greening first announced Britain was to have a new high-speed rail network composed of a Y-shape with stations in London, Birmingham, Leeds, Manchester, Sheffield and the East Midlands.

It was also the central component of former chancellor George Osborne’s Northern powerhouse idea. Osborne said in 2014: “The reality is that HS2 is a vital investment. It’s essential capacity and it will change the economic geography of the country. It will mean that London and Manchester are just an hour apart”.

“We’ve done a lot — but we must do much more to connect our northern cities”.

Of course, Osborne’s “Northern powerhouse” project is in essence the same as that which drives the levelling up agenda (minus some of the Johnsonian rhetoric). In fact, in recent years, HS2 has become symbolic of what the government’s levelling-up agenda could mean in practice — with its various cutbacks and delays interpreted in turn as microcosmic indications of the vision’s broader failure. 

Today, George Osborne is the host of a new political podcast with Ed Balls, and he used his new centrist soapbox to call the reported plans to axe HS2’s northern leg a “mistake” and a “real, real tragedy”. 

It also seems to be a clear diving line with Labour, with shadow transport secretary Louise Haigh explaining: “Labour will call time on 13 years of failure, and deliver the infrastructure fit for the century ahead”.

Indeed, the Independent’s revelations on HS2 come in the same week new shadow levelling up secretary Angela Rayner branded the Conservative version of levelling up a “sham and a scam” in a speech to the Trades Union Congress (TUC) conference in Liverpool. 

Rayner said: “The mask has slipped, and the public has seen the truth – warm words and politically driven handouts won’t touch the sides. An empty slogan won’t pay decent wages. False promises won’t build secure homes. And a sound bite won’t empower communities”.

Under Keir’s Starmer leadership, Labour has sought to embrace the central message of the levelling up agenda. Sir Keir has, for example, announced plans for a new “take back control”, intended to give new powers to communities; and the party’s Green Prosperity Plan has been heralded as a way of spreading opportunity throughout the country on renewables.

Moreover, Rayner spent Monday trying to tie the levelling up ideal to Labour’s pitch on workers rights, which she specialised in in her old brief as shadow secretary of state for the future of work. She said: “Labour has a comprehensive plan to create good jobs across the entire country and raise living standards for all through our New Deal for Working People”.

The problem for Sunak, therefore, is that the levelling up slogan remains salient and hence ready to be stolen by Labour. But he has, in essence, vacated the territory founded by his predecessor-but-one — allowing the political energy the Conservative Party stoked and failed to harness to flow into other channels. 

So while Johnson was able to make levelling up central to his political brand, for Sunak, it’s fast becoming a vulnerability.

And with HS2 only ever raised by the media when reports are circulating that it is being scaled back, Labour has a physical marker (or lack thereof) of Conservative failure: a full 13 years of it. 

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A study undertaken for Local Trust in 2020 found that 225 such neighbourhoods in England could be described in this way.  These are the neighbourhoods that have suffered most because of the decline of traditional industries as well as the disappearance of social institutions such as the pubs, cafes and community centres that support local civic life, define community identity and foster local pride and identity.

People living in these areas typically experience worse outcomes across a range of key indicators from health and wellbeing to employment and educational attainment – not just in comparison to the national average but also when compared to other equally deprived areas.  Despite this, they have – for decades – missed out on their fair share of help and assistance.  Analysis commissioned by the All-Party Parliamentary Group for ‘left behind’ neighbourhoods showed that since 2003 these areas had received some 70% per cent less charitable grant funding per head than other equally deprived neighbourhoods.

That’s why the government’s announcement of its commitment to create community wealth funds for disadvantaged areas such as these is a positive step.  With a consultation now expected to take place over the coming months on how such funds could work, it will be critically important that that their design follows key principles set out by the Community Wealth Fund Alliance during its campaign to make the case for the establishment of these new funds.  They should target the most deprived or ‘left behind’ neighbourhoods; be community led with decisions made by local people on how money is spent; accompanied by appropriate support for confidence and capacity building of local people; and be provided over the long term.

These principles are informed by the evidence of what has worked in past regeneration initiatives. Research by the University of Cambridge carried out for Local Trust, for example, found that key ingredients to successfully regenerating deprived communities included long-term funding of at least 10 years and community involvement embedded at every stage of design and delivery.

Too often past funding targeting communities has been short term, with consultants parachuted in to ‘help’ communities who disappear when the funding finishes and take the experience and skills gained with them as opposed to it being rooted in the community.  These new community wealth funds need to be capable of delivering a long term legacy of sustainable change.

The bottom line is that people living in the most disadvantaged and ‘left behind’ neighbourhoods know best what their local area needs, better than a Whitehall mandarin or even a town council official. But they have tended to lack the social infrastructure – the community spaces and places and community groups – needed to support them to effectively organise and take responsibility for transforming their own neighbourhoods. It is therefore hugely welcome that government envisages that community wealth funds will see “local residents empowered to make decisions on how to use the money”. Key to the success of community wealth funds will be how through their establishment, they support and create the strong, local community-led institutions capable of advocating and delivering for their areas in the long term.

The principles we believe should guide the design of community wealth funds are also informed by our learning from Local Trust’s delivery of the Big Local programme, which has provided 150 disadvantaged communities across England with £1.2million each of National Lottery Community Fund cash since 2012. Many of them communities who had missed out on their fair share of funding in the past.  Across the country, Big Local has shown how powerful local resident-led decision making can be in transforming local areas and the prospects of their residents.

In Whitley Bay, for example, local residents partnered with the local council and Mayoral Combined Authority to build a new hub at the centre of their community.  On the Scotlands and Bushbury Hill estates in Wolverhampton, local residents have taken the lead in saving a local community centre, turning it into a focus of activity, supporting children and families across the whole of their area.  In Poole in Dorset, a new multi-purpose centre fundraised for and run by local residents is providing access to services previously unavailable in their area.  And in northwest Bristol, a Big Local-supported programme has helped improve access to affordable housing and provided training courses and apprenticeships to those out of work, as well as taking pioneering community-led action against climate change.

These projects have succeeded precisely because they have been part of community-led strategies to regenerate and improve their local communities, representing the type of approach community wealth funds need to take to make a real difference in under-funded and ‘left behind ‘communities.  Today’s announcement is a promising start. The challenge now is to ensure that the principles underpinning the new funds are designed in a way that releases the potential of local residents and truly levels up left behind neighbourhoods across the country.

Matt Leach is Chief Executive of Local Trust 

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But as with so much else with the prime minister at the moment, things just did not go to plan. 

Fiasco followed fiasco, with news breaking that Britain’s lead lawmaker is set to face another police fine after filming a video in a moving car without a seatbelt. Seatbeltgate stole much of the media attention, but there was time too for intricate breakdowns of Sunak’s new funding announcements on levelling up. After all was said and done, it was the details of the latest tranche of levelling up funding that sparked the most significant furore.

Analysis found that large sums of the headline £2.1bn funding package is going to areas with relatively low levels of deprivation. In total, £151m is going to London, while the North East gets £108m and the Humber is getting £120m. It was also highlighted that, of the £1.9bn of spending that could be linked to individual constituencies, £1.2bn — around 63 per cent — had gone to seats held by Conservative MPs.

Then there was the matter of Richmond, the prime minister’s own constituency, which received another heap of cash (as it did in the fund’s first round). The news that the PM’s own constituency was receiving £19m in funding, while the cities of Birmingham, Nottingham and Stoke missed out, raised eyebrows significantly.

MPs and local leaders alike criticised the government’s preferred method of allocating funding to local authorities via bidding competitions judged by ministers. Shadow levelling up secretary Lisa Nandy rubbished a “Hunger Games-style” system, while Conservative mayor of the West Midlands Andy Street blasted “Whitehall’s bidding and begging bowl culture”.

Amid the outrage, many referred to the video which surfaced over the summer which caught Sunak boasting that he had deliberately diverted public money from “deprived urban areas” during his time as chancellor. Given that new levelling up funding seemed to be heading disproportionately Southward, the video underlined anew for many the calculated farce of the “rebalancing” project. 

Sunak tries his best Boris Johnson impression 

The “levelling up” slogan first appeared as a new soundbite in the early stages of the 2019 election. The slogan was deliberately slippery, intended to subvert anti-Westminster feelings for Boris Johnson’s own political purposes. In the end, it encapsulated Johnson’s stated concern with spreading opportunity across the country and was central to his successful pitch at “red wall” constituencies.

Levelling up was Johnsonianism distilled: a catchy slogan, a few billion quid and a monument to point to at the end of it all. It meant high-spending, headline-grabbing infrastructure projects. This side of Johnsonianism was summed up neatly by Dominic Cummings in a recent New York Magazine interview: “The only thing he was really interested in — genuinely excited about — was looking at maps. Where could he order the building of things?”, Johnson’s former top adviser said.

In short: as long as shovels were in the ground, Johnson thought he was winning.

The bidding war incited by the levelling up project would see communities pitted against each other, pining for Johnson’s attention and Whitehall’s cash. The PM would then tour the country, pointing to the physical markers of his success. His legacy would be then writ in stone across Britain’s high streets. “Thank you Boris”, Britain would collectively bay.

But where Johnson was able to make levelling up central to his political brand, for Sunak, it’s fast becoming a vulnerability. This is a serious problem for the Conservative party. Levelling up has never been large enough nor targeted enough to make a dent in regional inequalities — but balanced by Johnson’s boosterism, it could be electorally gripping. And unfortunately for Conservative MPs, Sunak does not possess Johnson’s powers of performance. 

This highlights another important point. For the levelling up debate begs further questions about Rishi Sunak’s political identity. Our prime minister is a treasury technocrat, better suited to fiddling with funding formulas than revelling in levelling up “success”. Whereas Boris Johnson never saw a spending commitment he didn’t like, Sunak is a fiscal Conservative in the truest sense. The very idea of big-spending infrastructure projects seems to jar with his political instincts.

It is telling that in his resignation letter as chancellor last year, Sunak wrote Johnson: “I firmly believe the public are ready to hear that truth. Our people know that if something is too good to be true then it’s not true”. He stated moreover that their approach to economic policy was “fundamentally too different”. It was a clarion call for spending restraint. 

So while Johnson’s boosterism made him the perfect frontman for levelling up, Sunak’s natural fiscal caution means he can never truly own the mission he inherited. It means that even in lieu of a comeback, the spectre of Sunak’s predecessor-once-removed still looms large over his policy platform. 

Far from a moment of triumph, the levelling up announcement this week has underlined anew Sunak’s political vulnerabilities. Johnson promised the world to the red wall post-2019, and Sunak is finding it difficult to deliver. Come an election in 2024, this will leave the prime minister massively exposed in Conservative marginals. 

At best, Sunak can only do a poor imitation of Boris Johnson on levelling up. In the long run, it may just leave Tory MPs hankering for the real deal.  

Sir Keir Starmer, snacking on canapés in Davos, cannot believe his luck.

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The current cost of living crisis is hitting people hard, exacerbating the existing inequalities that have long been a feature of our society. The levelling up agenda was pitched by the Johnson government as the long-term solution to these problems – a plan to “challenge and change” the unfairness of regional inequality.

Since then, our attention has been gripped, first, by political crises and, now, by more pressing economic ones, at the expense of thinking about long-term policy solutions to these challenges. Just this week, the Times reported that some MPs in marginal seats have been discouraged from using the term ‘levelling up’, leaving the door open to some interpreting this as a sign of a government looking to quietly distance itself from prior commitments.

This would be a serious mistake: the government should continue to prioritise the levelling up agenda alongside the cost of living crisis, to ensure people are better off and more resilient in the future. The government also needs to step up its cost of living support, so that ongoing levelling up projects are not hampered by the lack of money in people’s pockets.

Levelling up has been the subject of significant political attention since the government published the long awaited white paper on the topic last year. At Demos, we thought it was important to carry out a progress check. We wanted to understand how levelling up was going and what lessons could be learned for the future. We chose to visit the Tees Valley, where Conservative metro mayor Ben Houchen has made levelling up his flagship policy.

If levelling up was going to work anywhere, all evidence suggests it would be in the Tees Valley. Not least because it needs to succeed there – the North East has some of the starkest unemployment, child poverty and health statistics of anywhere in the country.

Levelling up in the Tees Valley is a work in progress, but people are worried about the impact of the cost of living crisis.

What we found, based on focus groups with the ordinary people who live there, was that people had faith in the local levelling up agenda – restoring the area as a leader in industry and creating more jobs was something people supported. However, many had not seen much progress so far. One person told us they thought levelling up had “ground to a halt”.

A lack of employment opportunities was a common concern – several people had either family members or friends who were struggling to find work. Some felt the levelling up agenda had not yet delivered new jobs on the scale they had been promised. People were worried about the impact of the cost of living crisis on themselves and their families, but also on the viability of local businesses and the local economy. With less money in the pockets of local people, our participants questioned whether the restaurants, bars and cafes being opened as part of local town centre regeneration projects would survive.

Our research also found that people were concerned about the future of the levelling up agenda more generally. They questioned whether the national economic crisis meant that the government would reduce the amount of funding allocated to areas like Tees Valley for levelling up projects. One person asked, “How long will this levelling up funding keep coming? Will that be put on hold?”.

This is not just a problem for families or businesses in the short term – it represents a longer-term problem for the resilience of communities. A continuous cycle where an area like the Tees Valley benefits from investment, only to suffer when an economic crisis comes along, benefits no one. It is vitally important that the government adequately addresses the cost of living crisis now, to sure up the future prosperity of places across the country.

The success of the levelling up agenda depends on effectively addressing the cost of living crisis.

What our research shows is that the success of the levelling up agenda in the long term depends upon how effectively people are supported through the cost of living crisis in the short term. Levelling up policy must be connected to cost of living policy in a meaningful way, across the country, for the government to fulfil its promise. We recommend making the current cost of living support more accessible, significant and longer term. This could mean bringing forward and extending cost of living measures, as well as expanding the eligibility of households to claim cost of living payments after April 2023.

It should also mean assessing the impact that cost of living support will have on local government funding in the long term, and accelerating levelling up initiatives rather than putting them on hold.

Levelling up is a long-term agenda, designed to address long-term problems. However, the cost of living crisis has exacerbated the poverty and inequality that already existed in many places across the country. These problems are not only having a profound impact on people’s quality of life, ability to pay their bills or find work, but are also hampering the success of the levelling up agenda. To effectively level up the country and address regional inequality, the government must step up and protect people from the cost of living crisis now.

Courtney Stephenson is a researcher at Demos. She is the author of the recent Demos Report on levelling up and the Tees Valley. 

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It follows criticism that money was given to several areas that are not considered deprived, and disproportionately went to Conservative or south-eastern regions.

Mr Gove told Sky News: “We have objective criteria that govern where money is going.

“We look at the strategic fit, the deliverability, the economic benefits and heritage matters as well”.

Mr Gove was also asked about the funding that had been earmarked for Rishi Sunak’s constituency. According to The Times, Sunak’s seat in Yorkshire and the 251st most deprived council area in England is getting £19 million to upgrade its high street.

“Well, we are giving money to Catterick, but that money is going to the biggest army infantry base in the country”, Mr Gove said.

He continued: “I don’t think anyone would deny that investing money in making sure that our service families have absolutely the best circumstances to support them”.

When it was put to Mr Gove that only half of the 80 or so successful bids for levelling up funds were in the most deprived areas of the country, he added: “Well, there are areas of deprivation across the whole United Kingdom. … I think it is the case actually that more Labour local authorities than Conservative local authorities receive money.

“But it will be news to people in Cleethorpes or in Workington who are receiving money today that they are not areas of high need – areas that have been undervalued in the past”.

Another notable area receiving funding is Camden, in Keir Starmer’s London seat, which is getting £7 million to tackle health inequalities.

According to the Yorkshire Post, two-thirds of the £1.6 billion given to places in England are represented by Conservative MP.

Equally, a number of Conservative MPs who missed out on funding are said to be unhappy with the distribution of levelling up cash. Ipswich MP Tom Hunt and Bolsover MP Mark Fletcher, both Conservatives, missed out on funding in their areas. 

Mr Gove also rejected this morning that Conservative MPs in marginal seats have been told not to use the phrase “levelling up” because people do not know what it means. Reports had suggested MPs were told to switch it for “enhancing communities” or “gauging up”.

The levelling up secretary told LBC Radio: “No, levelling up is absolutely the central domestic mission of this Government”.

“We want to ensure more economic growth across the country, particularly in areas where there has been lower productivity and that is why we are not just investing cash because that on its own doesn’t do enough, it is also why we are empowering local people and making sure that we work with the private sector in order to provide people with high value jobs in areas that have been overlooked and undervalued in the past”.

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The call follows a recent inquiry by the committee looking at the extent to which many parts of the country have previously missed out on cultural initiatives.

The MPs argue that local museums, galleries and theatres have a huge role to play in regenerating high streets and town centres away from the big cities, but that they run up against pervasive and persistent barriers to their success.

As part of its recommendations, the Committee has suggested that the current public funding model needs to be reviewed so that grassroots organizations are not squeezed out by those national cultural institutions that currently receive the bulk of public funding.

The Committee has called for the government and Arts Council England to separate funding for national institutions from local and regional institutions.

Amid the current cost of living crisis, the Committed has also called for targeted support for regional cultural institutions such as introducing VAT cuts and extending business rate relief, to cultural, sporting and media organizations.

Speaking upon the release of the report, the Committee’s Chair, Julian Knight MP said, “In the longer term, a new model of funding is needed which stops cash for culture being hoovered up by all the big players and instead recognises the importance of the grassroots and opening up world-class exhibitions and performances to new regional audiences”.

Continuing he said, “People should be put at the centre of efforts to level up the country through culture. The Government’s renewed focus on skills and vocational education must include support for industry-backed schools, training and apprenticeships. This will both help to tackle the chronic skills shortage inflicting the sector and provide a ladder of opportunity for people across the country”.

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Levelling up secretary Michael Gove led the debate on his department’s levelling up legislation on Wednesday afternoon in which he committed to “strengthening local government and rebalancing our economy”. 

Gove highlighted the “absence” of Labour MPs present for the debate compared to Conservative MPs.

Shadow secretary Lisa Nandy told the House of Commons that she was “glad for him that he couldn’t see the faces behind him” and shared her concern at a clause that allows the government to “tear up” levelling up measures “at a whim”. 

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PAC sat that ministers finalised the principles for awarding the first round of £1.7 billion of Levelling Up funds only once they knew the identities and scores of shortlisted bidders –, saying “DLUHC has past form with this”.

 In November 2020 the committee reported that the selection process for awarding the Towns Fund had “not been impartial” and raised concerns about the lack of transparency over the towns selected. 

The committee remains concerned over the timing of Ministerial input for funding awards, and also that realistic bids to the Levelling Up Fund have missed out at the expense of projects claiming to be ‘shovel-ready’ that have “since been beset with delays”.

In 2019, the committee highlighted how DLUHC did not know the impact of its £12 billion Local Growth Fund – but had also decided not to evaluate it, and says now that “accountability for levelling up outcomes remains unsatisfactory”.

Levelling up

The government has spent billions on local growth policies over many years without “a strong understanding of what works” or how it will measure performance across different geographical areas and timescales and must “demonstrate how the priorities of the devolved administrations will be addressed” in local growth funds.

MPs say they are: “concerned that optimism bias has meant realistic bids to the Levelling Up Fund have missed out at the expense of ‘shovel-ready’ projects that have since been beset with delays”.

Dame Meg Hillier MP,  who chairs the committee, said: “The PAC has reported too often on the problems the government has with delivery of its major projects, programmes and promises.

“Without clear parameters, plans or measures of success it’s hard to avoid the appearance that government is just gambling taxpayers’ money on policies and programmes that are little more than a slogan, retrofitting the criteria for success and not even bothering to evaluate if it worked.

“The nation is being squeezed harder than it has for decades, there is no more to throw away like this. The government must learn again to account to taxpayers for its use of their money.” 

A spokesperson for the DLUHC said: “The first round of the Levelling Up Fund is delivering vital investment to communities across the UK that have for too long been overlooked and undervalued.

“The assessment process was transparent, robust and fair and the criteria included the need for projects to be deliverable and to fuel regeneration and growth to level up areas most in need.

“Further rounds of the Levelling Up Fund will continue this work, with unsuccessful bidders given feedback and able to apply again.”

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Officials hope reforms will boost big business accountability and help British businesses operate with more agility and investment.

The move will reduce the risk of large companies collapsing, thus, increasing job security for British workers.

Previous corporate collapses have had a significantly negative impact on the economy. For example, the folding of Thomas Cook resulted in 9,000 redundancies, 555 retail store closures, and 1,286 companies and government entities being owed money. 

On Tuesday morning, Business Minister, Lord Callahan, announced the intention to overhaul corporate reporting by implementing the new Audit, Reporting and Governance Authority (ARGA).  By strengthening big British business accountability, the government believes the move will increase trust and investment, driving growth and job security. 

ARGA will replace the Financial Reporting Council (FRC) and is expected to be a more robust regulator that will build stronger foundations for UK business.

The government has also announced plans to review broader reporting burdens on all businesses, including from retained EU law.  This is designed to capitalise on ‘new found’ Brexit freedoms to achieve more proportionate regulation on British companies. These are plans which build upon the recommendations of an independent review by Sir John Kingman, Sir Donald Brydon, and the Competition and Markets Authority.

The Institute of Directors (IoD) welcomed today’s announcement and what it described as “long overdue” reforms.  Dr Roger Barker, Director of Policy and Governance, praised “the establishment of a more effective audit regulator (ARGA).” 

Andrew Harding, the Chief Executive of the Chartered Institute of Management Accountants (CIMA), also described the  proposals “a step in the right direction” but warned that “external audit doesn’t operate in a vacuum”. Continuing he said, “It is part of the wider corporate governance and reporting framework that oversees large corporate entities. When it comes to the adoption of internal controls, which we have strongly advocated for in the past, we want to see such reforms applied consistently by the largest companies rather than on a comply or explain basis, as it seems to be proposed.”

Minister for Corporate Responsibility Lord Callanan explained, “collapses like Carillion have made it clear that audit needs to improve. These reforms will ensure the UK sets a global standard. By restoring confidence in audit and corporate reporting we will strengthen the foundations of UK plc.”

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Levelling up is a phrase synonymous with Boris Johnson’s government. It is the cornerstone of the prime minister’s policy agenda, and has been billed by the government as the answer to reducing social and economic inequality across the country.

Since 2019, the plan has been light on detail, leading to accusations from critics that it is lacking real policy substance and is more of a political slogan to sell to the government’s new red wall constituencies.

The arrival of the levelling up white paper has revealed the government’s hand. Ever since becoming the levelling up secretary in September 2021, Michael Gove has been tasked with finding the elusive answers to reducing inequality in Britain.

Announcing the white paper in the House of Commons, Gove said the government’s new strategy will “make opportunity more equal and to shift wealth and power decisively towards working people and their families.”

The government’s plan for levelling up is underpinned by 12 key targets it has set itself to achieve by 2030. Boris Johnson says these goals will help to “break the link between geography and destiny”.

The 12 missions, which include aiming to make pay, employment and productivity grow across the country, narrowing the health life expectancy gap and increasing R&D spending outside the south east by at least 40%, are key measuring indicators to help judge the success or failure of the government’s levelling up strategy.

There is also a key emphasis on shifting power to local leaders in England. Influenced by the successful leadership of mayors such as Andy Burnham and Ben Houchen, striking devolution deals in England’s different regions will be a priority for the government.

Do the Government’s plans finally address the regional disparities seen across the country?

Labour has already made clear its dissatisfaction with the government’s levelling up plan. Shadow levelling up secretary Lisa Nandy said: “Is this really it?

“They tell us to wait till 2030. But where have they been for the last 12 years?”

Centre for Cities’ Director of policy and research, Paul Swinney, says the missions set out in the levelling up white paper is encouraging.

“The intentions in terms of what’s set out [in the white paper] are pretty good.

“We’re talking about an issue that is 100 years in the making at least, so I think that tells us the magnitude of the problem, and it’s going to need quite significant funding to deal with this.”

The amount of money available to make levelling up a success is the biggest source of contention. Despite Micahel Gove’s upbeat tone about the new funds made available as part of last year’s spending review, the Treasury has so far been reluctant to throw its full weight behind the project.

The business committee chair, Darren Jones, says the lack of backing from Rishi Sunak is a major cause of concern.

“Where is the chancellor? I think we need to see the chancellor standing alongside Michael Gove and the prime minister on this and saying how he’s going to fund it.

“The chancellor seems to be missing in action once again.”

For Conservative MPs, the promise of levelling up may provide a much-needed source of good news to sell to their constituents, in what has been a bruising few months for the Party.

John Stevenson, the Conservative MP for Carlisle, says the government’s plans will take constituencies like his “to a different level.”

Stevenson said: “I think we’ve got to persuade Whitehall that actually, people making decisions at the local level is the right way forward and we’ve actually got to have confidence and trust in local leaders to deliver.

“We’ve got to cut the purse strings and cut the apron strings to a certain extent and allow local government, local leaders to flourish.”

Time will tell as to whether levelling up will provide a fresh solution to the age-old problem of reducing inequality in Britain. For Paul Swinney, the crucial task will be keeping future governments on board with the project.

“Whether it’ll be this government’s agenda, or it’ll be the next government’s agenda, and it’ll be the next government’s agenda after that, the crucial thing is, do we keep it at the top of the agenda or does it slip down again?

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However, the paper’s analysis ignores the main reason for the broken history of levelling-up efforts. This is the false assumption underpinning all of those attempts that private sector investors can be persuaded to direct their money to the poorer parts of the country by making those areas more attractive to them through improved transport links, workforce skills, and town centres. This has never worked in any comprehensive fashion because it overlooks the fact that what investors like about the UK is the high, stable returns delivered by the finance and property sectors which are most vibrant and plentiful in London and the South East. This is why the UK has been at or near the bottom of international rankings of investment in machinery, vehicles or R&D for decades.

It is unsurprising that the paper fails to mention this because the implication is that if we are to really reduce regional inequality, the Government would either have to direct vast amounts of public investment there or force private investors to do so themselves. Alternatively, it could burden the London housing market or finance sector with so much regulation and taxation that it is unable to generate the returns investors crave while incentivising investment in other parts of the country through tax and regulatory breaks. These are steps way too radical or politically unpalatable for this or previous governments.

The alternative is for poorer areas to generate their own vibrant local economies without the business investment that currently flows into London and the South East. This bootstrapping is partly what the paper is getting at when it talks of the way Italian city states transformed themselves from backwaters into wealthy centres of trade and culture during the Renaissance. Such a process is as much a cultural and social as an economic phenomenon requiring a self-confidence and optimism that is often missing in the most marginalised places.

This is where the white paper’s emphasis on community power is its most interesting aspect. Somewhat at odds with the largely technocratic and top-down elements of the bulk of the paper, it is nevertheless the first to propose a self-consciously community powered programme of change. There will be a new strategy for community spaces and relationships, pilots for new models of neighbourhood governance and ‘community covenants’ and an investment fund for communities which could, following consultation, be expanded very considerably.

This debut for Community Power in a major government strategy is good purely in terms of giving people much more say over the places they live and the decisions taken in their name – it is the urgent deepening of democracy we need as the legitimacy of Westminster weakens day by day. But that confidence and optimism, so vital to a bootstrapping approach, is far more likely to come in places where people are trusted and enabled to take action on their own behalf rather than waiting for just the right policy from Westminster or just the right investment from some corporate board meeting thousands of miles away.

To truly generate this cultural and social transformation in the poorest parts of the country will require much greater boldness for the community power agenda than that outlined in the paper. Indeed, community power does not make its appearance until page 212 while the pages before are full of that hierarchical mindset that has done so much to damage confidence and optimism in local communities. Fortunately, there is a growing recognition within the public sector and communities themselves of the need for a much more ambitious plan to put communities right in the driving seat of change.  

The logical next step, therefore, for the Government is to really run with community power as an idea – ditch the time-wasting reorganisation of local government and plethora of tiny regeneration funds and instead unleash a confidence revolution across the country.

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Ahead of his statement on the long-awaited Levelling Up white paper in the House of Commons this afternoon, Gove recalled the note left by ex-Labour treasury minister Liam Byrne to his successor in 2010 that read: “I’m afraid there is no money”.

He affirmed that “difficult economic decisions” were required under the former prime minister David Cameron’s tenure, as many point toward the twelve years of Conservative leadership as a factor in regional economic disparities.

Levelling up

“Boris Johnson was elected in 2019 as the leader of a new government determined to change that economic model,” Gove explained, appearing to mark the Brexit referendum and its consequences as a turning point for the Conservatives’ economic agenda.

“We had two years of Covid when we were preparing our proposals for levelling, and indeed laying the groundwork with our Levelling Up Fund and other transfusions of cash to the frontline. And now we’re laying out the plan for 2030,” he went on.

However, Gove seemed to confirm reports that the Treasury did not OK all his desired policies ahead of the white paper.

He claimed that October’s Spending Review saw money “put in departmental bank accounts” by Chancellor Rishi Sunak which was currently being disseminated to local leaderships.

“I did ask the Chancellor for a lot. And he gave it to me, that was what was happening in the Spending Review,” he remarked when quizzed over whether Mr Sunak denied some of Gove’s requests.

“In this life we never get everything we want, but in the words of Mick Jagger ‘you might not always get what you want, but sometimes you get what you need’.”

Moving on to discuss the Ukraine crisis following Boris Johnson’s talks with Ukrainian president Volodymyr Zelenskyy, Gove claimed it was a “badge of pride” that [Russian television is attacking our Prime Minister”, after Russian state media have attempted to brand to the ongoing ‘Partygate’ scandal as evidence of Britain’s incompetent governance.

“One of the reasons that Russian television is attacking the Prime Minister is the Prime Minister is leading the West’s efforts in order to ensure that we defend Ukraine’s territorial integrity against Putin,” he argued.

“I don’t think you necessarily need to dial Vladimir Putin on his mobile phone for him to get the message that he should back off,” Gove explained in response to questions over Mr Johnson’s decision to scrap his scheduled Monday call with Russian president Vladimir Putin to instead address the Commons on Sue Gray’s update.

Gove even went on to claim that some elements of the ‘Partygate’ allegations are “speculation and not true”.

He also told Sky News that it was a “hypothetical question” when asked if Boris Johnson ought to resign if it were concluded that he misled parliament over the issue.

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Will it be worth the wait? Only if the government recognises the importance of civil society in every step of its plans.

Throughout the two-year process intended to define levelling up, complaints about its ambiguity have never been far away. Indeed, YouGov polling in December found that half of people surveyed still did not know what levelling up meant. But that can hardly come as a surprise, given how much the phrase has evolved.

Only after Michael Gove took charge of levelling up in last autumn’s reshuffle did any real definition of the phrase take shape. The new Secretary of State coalesced levelling up around four core objectives: empowering local communities, boosting living standards, spreading opportunity and improving public services, and restoring local pride.

That’s a very ambitious agenda. And the latest rumours out of government suggest there will be no new money available to make it possible. Delivering a lot with very little is something charities do best, and government could learn a lot from the social sector as it tries to make levelling up a reality. Indeed, charities are integral to everything Gove and his team want to achieve.

Levelling up

Consider ‘boosting living standards’. Charities don’t just patch up the holes in our social security system: they provide the ladders by which people can climb out of poverty. From the thousands of volunteer tutors helping disadvantaged children at school, to those supporting adults into better paid employment with literacy and maths tuition, charities are a crucial and often overlooked component of our education system.

Charities around the country are already ‘spreading opportunity’. Transitions London, for instance, works to re-start the careers of refugee engineers and business architects, while High Ground supports armed forces leavers to find new careers in land management. Importantly, charities doing this vital work are creating opportunities for those who most lack them.

Civil society organisations are uniquely placed to do this. They are embedded in the communities they serve and engaged with groups that others simply cannot reach. Charities and community groups provide the forum in which people can gather and decide on their own priorities, whether it’s investing in a local pier or replenishing green spaces. They are a key tool for ‘empowering local communities’ to bring the change they want and need.

As for ‘improving public services’, this is an impossible challenge for any government that chooses not to collaborate closely with civil society. Our NHS wouldn’t function without the tens of thousands of volunteers contributing their time as drivers, porters and befrienders. Neither would our courts without volunteer magistrates, the education system without volunteer school governors, or the police force without volunteer community support officers. All the while, the charity sector is delivering vital not-for-profit services as the largest supplier of NHS-commissioned mental health care, as well as the highest quality provision of social care available.

Civil society is also central to ‘restoring local pride’. Research for the Law Family Commission on Civil Society shows that life satisfaction among people living in a community is closely linked to the presence of a strong ‘social fabric’. This means volunteering opportunities, community assets like libraries and local groups to join. 

The third sector is a vital component of each of the key strands which underpin the much-anticipated levelling up proposals. It is fundamental that the sector is given a role to play in the plans, not as an afterthought but as a partner. The sector should be helping not just to deliver solutions across very different parts of the country, but playing a key part in defining the problems faced as well. Charity leaders would welcome the chance to help, with a recent poll showing 47% of them believe their organisations could play a role in levelling up.

Direct investment in the charity sector is needed to make this happen. In the most deprived areas of the country, there are 28% fewer charities available to play their part, and charity grants from local authorities have fallen 20%. The government should be looking at local hubs which can drive civil society growth in the parts of the country that need it the most, where the infrastructure simply doesn’t exist for charities to solve the problems.

Indeed, a look back at regeneration attempts from previous governments serves as a timely lesson. Investment in the capacity of local civil society is the decisive factor between success and failure. How the government works with charities and community groups will make the difference between a legacy of lasting improvements, and flash in the pan spending which renders levelling up nothing more than an empty slogan.

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One thing for sure is Levelling Up has become a serious matter. Socially, because without action the burden of intervention to deal with those left behind will continue to grow at an accelerating rate and the widening inequality will eat away at the fabric of society – with resentment feeding both sides. Economically, because under-utilised assets across the wider economy could be brought into more productive use for the benefit of the whole country. Politically, because the legitimacy of Westminster controlled policies will increasingly be questioned by left-behind regions – particularly where the devolution train has left the station.

Whilst we await with bated breath for the publication of the Levelling Up White Paper, whatever it says must be for the long term. The disparities in the UK economy have been created over many decades and even partial success in Levelling Up will take many decades more to address. This is not a one to two parliament policy initiative but a multi-generational approach allied with a shift in the national economic psyche. Levelling Up points to large-scale changes in government objectives and, to be genuinely successful, we need at least some redistributive policies and a new set of goals to aim for.

Levelling up

Firstly, we require a clear view of success. The breadth of Levelling Up means that some clear objectives must be set. Economic reporting needs to measure progress against those objectives – economic output of less successful areas, higher levels of skills achieved by disadvantaged communities, investment made in regional infrastructure, long-term employment attainment from those previously unemployed or on insecure contracts, and reinvestment of local taxation in local assets.

Linked to this, supporting industrial policies must outlive the investment cycle. Business makes capital investment for the long term and by its very nature needs clarity before it risks that investment capital. Sustained commitments in areas such as infrastructure, energy, transport, rural affairs and defence can all drive UK economic success (often in the regions). Yet all too often turning areas of expenditure repeatedly on and off has meant that the UK must buy from overseas when equipment is finally needed again – the factories of the regions having failed.

Market economics benefits the successful and it is this incentive effect that creates economic growth. This economic success, whilst welcome, does not automatically favour everyone and this is where government must curb market economy excesses. Recently, however, the redistributive efforts of government have been weakened to the point where even a debate about curtailment of powers and higher levels of taxation are represented as being dangerously radical. This debate is long overdue.

What we can say without debate is that UK decision-making and fiscal policy is too centralised and devolved power is essential. Local areas may wish to create the environment that can stimulate local growth and strengthen communities but in order to deliver anything they must go ‘cap in hand’ to Westminster. In turn, central government has long seen all UK taxation receipts as their money – it begrudges sending this back to local regions. Local decision-making, linked to local taxation and local investment, can enable local areas to self-determine the future and having to ask Westminster to return even a small portion of locally-generated taxation revenue is illogical and demeaning.

As a final point, the very idea of a central Department for Levelling Up, Housing and Communities (DLUHC) is actually nonsense. It is a symbol of how centralised UK political thinking has become, that in order to stimulate a policy concerning delivery of improved local services and strengthened local communities, the first act of government is to create a central department. Even in delivering mechanisms such as Towns Fund, the DLUHC presides over the minutiae of local expenditure – expenditure at a scale that would formerly be in the hands of locally-elected politicians and their officials.

At its purest, Levelling Up is unattainable – and suggests we need yet more of the same economic medicine to stretch the outcomes further. An alternative view is we need a revised economic model which concentrates to a greater extent on the environment, the ecosystem, more circular use of resources and the wellbeing of all. This is a model where everyone has a huge amount to do – and there is no leader. Rather than worrying about Levelling Up the old playing field we should be considering a new and important opportunity for us all.

Nigel Wilcock is Executive Director of the Institute of Economic Development (IED). This week the IED has published its paper, Levelling Up: pre-White Paper perspectives from economic development professionals

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There is a simple reason, backed up by research, that growth will deliver levelling-up. It is that the resources in the ‘behind’ regions are in greater supply. This is obviously the case, since this is why they need ‘levelling-up’. In our research on regional Britain we find clear evidence that higher demand provokes much faster rises in wages and prices in the ‘south’ than in the ‘north’, for this reason. This in turn implies that growth tends to favour the north. Infrastructure spending will then naturally gravitate to these parts since in practice it is demand-led by the usual cost-benefit analysis. One of the levelling-up fallacies going the rounds is that the north can be lifted up by differential infrastructure spending; yet this simply puts the cart before the horse.

The question then becomes how do we promote growth in the economy as a whole so that this levelling-up can also proceed. Again we know the answer well. It is through holding down tax rates, especially on entrepreneurs, and creating a permissive regulative environment in which the common law prevails preventing observable harm rather than the continental law philosophy of the EU in which possible harms are prevented in advance blanket intrusion.

Levelling up

Sadly, the government is not setting out this strategy for growth at all clearly or convincingly. It has paid lip service to the deregulative idea but there is no momentum behind its implementation; instead we hear constantly about how existing ‘standards’ will be upheld- which is code for doing nothing to alter existing regulations. As for taxes, we have heard plainly from the Chancellor’s last budget that even though he is in favour of low taxes, taxes will go up sharply- both on businesses and workers- and none will come down.

The reason given for this tax policy is the state of the public finances, namely the high ratio of public debt to GDP post-Covid. The Treasury and its ally, the OBR, lose no opportunity to stress the possible catastrophes that await us if we do not urgently limit public borrowing, now that the debt ratio has reached around 100% of GDP. Yet history tells us that we have never defaulted on our debts even though the ratio went well above 200% of GDP both after the Napoleonic wars and after WW2. Also after the first the high debt ratio did not stop Gladstone’s sharp cuts in our high tariff rates; nor after the second did it stop the Labour government’s expensive policies to build the welfare state.

In both cases it took many years to bring the debt ratios down again to low ‘safe’ levels; meanwhile policies were pursued to promote growth and stabilise the economy as well as possible. It is the role of public debt to allow these policies to proceed smoothly without needing to be stopped and restarted to ‘bring down debt’.

As for the various short term ‘fiscal rules’ that governments have announced since the financial crisis of 2008, they have been jettisoned, rightly, on a regular basis. They completely miss the point about the smoothing role of public debt, on which the only constraint is long term solvency- something that for the UK has never been in doubt; the technical condition for it is simply that the growth in real debt must be less than the real interest rate. With the current real interest rate negative, this condition is easily met.

So what is to be done? We need to see a coherent government economic strategy to promote growth through low taxes and growth-friendly regulation; this in turn will create levelling-up as the growth reaches the parts of the economy current policies cannot reach. As part of this strategy, the government needs to explain how this fits in with a long term plan to maintain solvency and keep the public finances solid. Of course there is no contradiction between a stable economy growing solidly and strong public finances gradually restoring the debt ratio to normal levels. But the government needs to get its courage up to restate this basic economic good sense.

Professor Patrick Minford is one of the UK’s leading macroeconomists and holds the chair of Applied Economics at Cardiff University.

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The delay is understandable given the pressures of the pandemic, but we could now be just two years away from a general election and Red Wall Conservative MPs are growing concerned that they will have little to show their voters on polling day.

They are right to be worried. Cancelling the eastern leg of HS2 has been seized upon as proof that the Government is not serious about levelling up, and the public are not particularly impressed by the measures the Government has announced so far: Centre for Cities’ polling found that just one in ten people would prioritise moving civil servants out of London to level up – yet the Government makes much of its plans to do exactly this.

A long-awaited white paper setting out the Government’s plans was delayed last month, though Michael Gove hopes to have it published by Christmas. Reportedly he wants to recreate what he calls the ‘Medici Effect’ – the idea that bringing skilled people together will also bring prosperity. The principles behind this are right but, on a practical level, fifteenth century Florence is not the best example for the twenty-first century UK to emulate. Instead ministers should look to modern Germany.

Post-reunification Germany was an economically divided country: productivity in the former East was around sixty percent of that in the West. To tackle this problem the Federal Government began a thirty year-long levelling up programme which, though not finished, has narrowed the gap: eastern Germany’s productivity is now 85% of western Germany.

Given the success of Germany’s levelling up programme, people in Whitehall should look to what their counterparts in Berlin did over three decades. However, I am not convinced they are prepared to do what the Germans knew was necessary to make the programme a successin the long-term.

Instead, the Government appears impatient to get levelling up done quickly. Writing in the Yorkshire Post last week the Prime Minister said he cancelled HS2’s eastern leg because “Yorkshire would have not have seen the benefits of our investment until at least the 2040s. Levelling up can’t wait that long.”

Genuine levelling up will take that long – as it has in Germany. However, just because this Government won’t finish the job does not mean that it cannot deliver some quick wins and lay good foundations through the right priorities – skills, business growth, transport improvements.

Unfortunately, the adversarial nature of UK politics means that no Government can be confident that the foundations it lays won’t be dug up by its successors. Long-term strategies are quickly abandoned once a new Government takes office. This is a stark contrast to Germany where levelling up has buy-in from all mainstream political parties. Because of this, programmes run for decades – not just until the next election.

The German Government also recognised the vital role that eastern cities – Berlin, Leipzig and Dresden – had to play in levelling up. Thirty years ago, they had weaker economies than many small towns in western Germany, but their position has strengthened since then and, while they are not yet on a level with Frankfurt or Munich, they are catching up. This did not happen by accident, but by the Government working with city leaders and devolving power and resources down to them.

In the UK, Government thinking on big cities is ambiguous and many urban political leaders are concerned that levelling up will pass them by. Last week the Mayor of London had to ask Whitehall to step in to support the capital’s struggling transport service, warning of cutbacks if it didn’t.

Some close to Government are unconcerned by this, they see little political capital to be gained by supporting Labour strongholds. They are wrong, the economic underperformance of our largest northern cities costs the UK £47 billion per year – money that could be spent on levelling up the whole country. The German Government recognised that to make a success of levelling up the east its cities needed to thrive; the same is true in this country.

Andrew Carter is Chief Executive of Centre for Cities   

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It is clear that the Government is trying to put in place the foundations for exactly that. Relocating Whitehall departments to Wolverhampton and Darlington, establishing eight Freeports across the country and distributing money through the Levelling Up Fund are just three examples of how the Prime Minister is pulling on various levers to entice businesses and people to consider living in our great towns and cities of the Midlands and the North.

While the Government is now making clear moves to boost employment opportunities in places outside London and the South East, the way housing need is currently assessed and how Government investment in housing is distributed geographically is not fit for purpose. Put simply there is no alignment between the policies which will attract more people to live in places such as Birmingham, Manchester and Leeds and the way we assess where future housing should be located.

This is the focus of a major new report from the Building Back Britain Commission. Our analysis shows that over the next 20 years we will need as many as 140,000 new homes every year outside the South, and predominantly in the North and the Midlands. This means up to an additional 67,000 homes every year over and above the Government’s current estimates for those areas. We will also need to see greater investment in refurbishing existing homes and the replacement of many homes that are no longer suitable or in poor condition.

A new housing strategy is urgently needed that specifically aligns housing need and investment to levelling up. At the heart of this plan has to be a dynamic forward looking assessment of where the employment opportunities of the future are going to be. If we carry on down the current track we will be building too many homes in the Home Counties and far too few outside the South East.

Any new housing strategy must also acknowledge and respond to two pressing problems that the housebuilding industry is currently grappling with. One such problem is the growing skills shortage, with the combined forces of the pandemic and Brexit having potentially exacerbated a crisis that already existed in the construction industry. The second major problem that the industry is currently contending with is one of materials shortages, caused by a rapid rise in prices.

This challenging backdrop underlines the need to further embrace the opportunities offered by modern technologies, products and processes for delivering the built environment, collectively known as Modern Methods of Construction (MMC). Not only does MMC offer quicker and more predictable delivery and significant environmental benefits, it also presents an opportunity to address the skills crisis faced by the construction industry.  To foster innovation, new methods of construction and improve the level of training available to workers, Government should also commit to creating at least one ‘construction cluster’ in every part of Great Britain by 2030.

Michael Gove clearly understands the importance of building the right homes in the right places. At the Conservative party conference he called for more housebuilding in the North. He is right. There will always be a demand for homes in the South East, but it is vital that we rebalance the numbers to help further the transformation of many of our great towns and cities.

With improved existing homes alongside new, good quality housing of different tenure and higher quality and better paid jobs, we can stem this brain drain of talent and reverse decades of poor productivity in the regions outside London.  The result could be a country in which cities such as Birmingham, Manchester and Liverpool are as successful as London.

 Terrie Alafat is chair of the Building Back Britain Commission. She is also chair of The Riverside Group and is a former director of housing in the Department for Communities and Local Government and a former chief executive of the Chartered Institute of Housing. She was given a CBE in 2013 for services to homeless people.

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The sector makes a greater contribution to the UK economy than both rail and air combined.

The UK maritime workforce is 42% more productive than the average UK worker.

The sector is also a source of well-paid, highly-skilled roles, which pay an average of £38,000 per year – £9,000 more than the national average.

These stark statistics underline how important the sector is to the UK’s recovery from the pandemic, its broader ambitions in a post-Brexit trading environment, and turning levelling-up from ambition to reality.

Regional enablement

Port operators collectively invest around £500m each year in their communities. This is a substantial contribution to the country’s infrastructure, and the majority is made by privately owned enterprises, supporting jobs in construction and other sectors.

As a whole the maritime sector supports over one million jobs and adds £46.1bn to the economy. It facilitates 95% of UK global trade, representing 500m tonnes or £500bn in value every year, plus 60m passengers.

Crucially, as far as levelling up is concerned, ports operate in virtually every coastal community in the UK, presenting a unique opportunity to spread economic benefits in traditionally deprived areas more equitably, driving growth through employment, infrastructure, regional transformation and sustainability, whilst also relieving many of the acute pressures on the supply chain.

Mark Whitworth, chief executive of the one of the UK’s largest port groups, says: “For those not familiar with the industry, ports have evolved beyond all recognition and are a vital source of enablement for the regions they operate within. Our infrastructure acts as a catalyst to incite development in specific economic sectors and locations near ports”

“They create a wide range of business and job opportunities in the wider supply chain, as well as direct diverse employment benefits, through marine activity, cargo handling, ship operations and services, warehousing and processing, land transport, freight forwarding and customs brokering through to technology, infrastructure, government agencies and many more.

“At Peel Ports Group, we view ourselves as a game-changer for the companies that we serve as customers, the businesses that operate from our estates, and the communities we support. Our investment of over £1.2 billion in the last 10 years has helped to open-up new trade opportunities locally, bringing business to the regions in which we operate. This investment has resulted in 1000s of new, high-quality, skilled job opportunities for people living in coastal communities across the UK.”

Case study: Thriving regional ports bring community benefits

The Port of Liverpool provides vital local employment. A third of the workforce live within the borough of Sefton, and total full-time employment is equivalent to 3% of all private sector full-time employment in the borough.

Furthermore, 80% of the workforce live in the Liverpool City Region, which has benefited from over £500 million investment, helping to bring new jobs and business opportunities to the local area.

The business’s success has allowed it to donate thousands to local charities, whilst hundreds of thousands has been contributed to community improvements including road schemes, cycle paths, marine activity and tree planting.

Working with local colleges and schools, the business runs an active apprenticeship programme and has an average length of service of 11 years plus. The future is bright in Liverpool, with the City Region being granted Freeport status, which will open many other opportunities to the benefit of the port group, it’s community and wider economy.

Shifting the supply chain

As has been well reported, the entire logistics industry is facing challenges as a result of global port congestion, HGV shortages, Brexit and Covid impacts.

Even where ports have invested and planned for the future, the general turmoil in the supply chain is producing unpredictable shifts in cargo movements.

The traditional approach has been to invest in relieving congestion in existing bottlenecks. This relatively short-term fix has failed to address the bigger structural challenge – and opportunity – of how best to use the UK’s wider network of ports, especially those farther away from over-subscribed routes.

Currently almost 95% of deep-water container vessels enter via southern ports, yet 60% are transporting goods destined for areas farther North. Using regional ports rather than southern hubs shortens the journey from the port to the next stop, often by hundreds of miles. To take advantage of this means having a properly strategic and equitable investment programme across the country. That is just one of many levers available to the partnership of government and industry.

But the contributions to a sustainable future don’t stop there.

Peel Ports Group has major ambitions to revolutionise the future of port operations in local regions and has sustainability and levelling up high on the agenda, as Mark Whitworth summarises: “As an island nation, ports provide critical infrastructure as the UK’s gateways for food, medical, energy and fuel supplies. It is therefore important that port providers engender positive change in the UK’s logistics market in tackling climate change.

“As one of the largest port groups in the UK, we understand our responsibility to minimise the environmental impact of our operations for the benefit of the planet whilst also ensuring the smooth continuation of the supply chain in volatile times.  Investment and future proofing is critical for a sustainable future.

“We have serious plans to work towards achieving long-term, sustainable growth that has a positive impact on the environment as well as regional economies and local communities for generations to come, with ambitious net zero targets and exciting new developments on the horizon.”

To find out more and talk to Peel Ports about how the maritime sector can combine levelling up with net zero, visit: https://www.peelports.com/about-us/investment

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The elusive elixir of steady, sustainable, and positive economic growth has been the ultimate aspiration of all post-war administrations, and such a scenario is usually aligned with political and electoral success. Yet in facing often trying economic circumstances, governments of different political persuasions have offered varying solutions, with some pursuing a more expansive Keynesianism programme, while others have pursued more fiscally conservative austerity. Such approaches have varied and altered over differing historical periods as proposed solutions for stabilising an often-volatile economic situation.

Keynesianism or austerity?

As alternative economic agendas, politicians and economists have long argued over the merits of a Keynesian versus a more austere approach to managing the national economy. Keynesianism flourished in the aftermath of World War Two as a means of stimulating a shattered economy, and in the process the Attlee administration expanded the welfare state. There was also some Keynesian influence over aspects of New Labour’s economic agenda between 1997 and 2010, notably in its historically high levels of spending on core public services such as education and health, which beneficially boosted investment in the nation’s infrastructure.

Likewise, austerity has been pursued at various times throughout post-war British history, being notably applied from the political left when trying to trim the excesses of the Attlee government’s reconstruction programme between 1945-51 culminating in controversial welfare cuts to balance the books. It was  later more ideologically applied from the political right during the 1980s, as Margaret Thatcher aspired to ‘roll back the frontiers of the state’ and create a more streamlined and efficient economic model. It was more recently implemented by David Cameron’s Conservative-led administrations between 2010-16 in a bid to reduce the rising national deficit, and which produced some relatively brutal cuts in the provision of state-funded core welfare services. Debate both at the time and since has focused on whether such austerity went far enough or was excessive, and whether it was an economic or political choice by the Cameron administration.

Post-austerity economics

 History therefore indicates that Labour governments have been more Keynesian in their economic instincts, while Conservatives have been inclined towards austerity as a broader solution to economic problems. Nevertheless, there has often been some crossover, with both sides willing to spend and cut when the economic conditions suited. Within a contemporary context, while recent Conservative Prime Minister’s Theresa May and Boris Johnson have alluded to a loosening of the post-2010 purse strings in recent years (notably in a more liberated post-Brexit environment), evidence of this materialising has not always been forthcoming.

It is within this historical context that we should assess and interpret Rishi Sunak’s Budget of the past week. It certainly appears to go against conventional fiscal conservatism with regards to public spending, but both he and his allies would insist they are operating in unprecedented times in the wake of a destabilising global pandemic.  The demands of core public bodies like the NHS in particular have generated and demanded high levels of government financial support. Indeed, it has been noted that the aftermath of this period has left Britain facing its worse economic crisis for an estimated 300 years, and in a modern context certainly the most testing conditions since World War Two.

Keynesian analysis would argue that spending your way out of an economic slump is the best option available, and the approach adopted by Boris Johnson and has Chancellor would appear to endorse this. This has subsequently been evident in an estimated £150 billion of further public spending commitments in this latest Budget, on top of existing high levels of pandemic-related public expenditure. This will further accelerate the upward curve of taxation, pushing it to a level not seen since the 1950s.

Indeed, at one point of the Budget debate, Shadow Chancellor Rachel Reeves lambasted the Conservatives as the “party of high taxation”, which was something of a role reversal based on traditional party positions.

Yet many Labour MPs would ideologically agree with such an interventionist and fiscally expansive approach in addressing the post-pandemic scenario.

Motives and reasons for ending austerity

More pragmatic Conservatives like Prime Minister Johnson will argue that austerity served its purpose in the last decade, and that with the national deficit brought under control a more relaxed public spending agenda can now prevail. The post-Covid economy also arguably requires a government-led stimulus to boost recovery, and the high levels of economic growth of recent months would appear to suggest this is boosting the economic situation, with original estimates of 4% annual growth now being upgraded to 6.5%.

Government ministers have also declared that being outside of the European Union has freed up financial resources which can now be spent more liberally on domestic policy issues, a prominent argument of the successful Brexit campaign of 2016.

Johnson and his Chancellor are also committed to a so-called ‘levelling-up’ agenda that the Conservatives have prioritised both during and since the 2019 general election. This committed an incoming Conservative government to a somewhat vague financial investment in previously neglected northern communities located within the much-publicised ‘Red Wall’ seats, which fell to the Conservatives in 2019.

Newly-elected MPs in such seats have organised to form the ‘Northern Research Group’ to lobby for the delivery of such promised investment.

However such a policy commitment could prove to be very expensive in practice, with an estimated cost as high as £2 trillion in order to make any impact on closing such a north-south divide, according to some policy experts.

 Future political and economic tensions

 Unrest also exists within other elements of the Conservative Party, who are anxious about such high levels of public spending and associated taxation, amidst fears that such policies are de-aligned with Conservative principles, and will result in more national debt and further rising inflation.

Johnson will acknowledge that his somewhat unconventional economic approach has placed Labour in a difficult position as he adopts a more statist outlook, and initial polling responses have suggested it has some wider public support.

This can all be linked to his ongoing electoral strategy of further eroding Labour’s traditional support base. However, he must also not forget his own core voters, many of whom are paying more taxes than ever, and whose discontent will be relayed back to nervous Conservative backbenchers. While Chancellor Sunak says he plans tax cuts at an unconfirmed future date, as the government seemingly moves beyond austerity, its current economic policy narrative will continue to be a difficult balancing act in terms of pleasing all elements of its delicately diverse electoral coalition.

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