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The “Levelling up” Budget – towns are still waiting

Forty years of hurt…

The Government has made it very clear that “levelling up”, reducing geographic inequalities in the UK economy, is one of its top priorities. With details as to what the policy means in practice thin on the ground in the Conservative Party manifesto, the budget was eagerly anticipated as the moment when the Government made ”levelling up” real. We are still waiting.

EY’s recent Regional Economic Forecast for England demonstrated that 40 policies to address geographic imbalances in the UK since the mid-1970s have failed to stem the tide. There is no doubt that more of the same will not deliver real change - a significantly more radical approach is required to significantly reduce geographic inequality. The chancellor announced a plethora of policies and a promise of higher spending in the budget, including a promise of a significant amount of investment in infrastructure, but there was no articulation of a vision and strategy while details on specific projects were thin on the ground.

…with more of the same…

The chancellor announced several continuations or extensions of existing programmes including a new devolution deal for West Yorkshire, the provision of £4.2 Billion through the Transforming Cities fund for the 8 Mayoral Combined Authorities, the £5 Billion for buses and cycling that was announced by the Prime Minister in February, the Manifesto commitment of £5 Billion for broadband gigabit and an additional £510 million to improve the geographic coverage of 4G. An additional £2.6 Billion for flood defences was a welcome increase in funding for communities still reeling from the effects of the recent storms.

…but mainly jam tomorrow…

The chancellor promised a new National Infrastructure Strategy would be published in the spring, which presumably includes the announced £27 Billion for roads, £12 Billion for housing and £1 Billion for urban transport under the Transforming Cities Fund. However, with just over £20 Billion on infrastructure committed and over £200 Billion of total spending unallocated over the 5 year horizon, it is difficult to evaluate what the impact of the proposals will be.

The expected reviews/consultations on Business Rates and Social Care were also announced, though it does beg the question as to how many reviews on business rates we need before we act. There was a similar lack of detail on the UK Shared Prosperity Fund. This is intended to replace EU structural funds but is clearly another work in progress as no guidance was provided on how it would work and what the specific objectives might be.

…with only slight hints of more radical moves…

It was positive to hear the chancellor announce plans to move 22,000 civil servants in the Treasury, BEIS, MHCLG and DIT out of London with a significant number moving into a new Northern economic hub. Proposals to spend more on public R&D and to allocate more of the funding across the country are also very welcome as was the announced review of the Green Book approach, with its inherent bias towards agglomeration. Moves like these demonstrate that the Government recognises that “levelling up” requires more than money, but these are small steps. Geographic rebalancing is a challenging ambition that will not be delivered by a ”build it” and they will come approach, what was lacking yesterday was any sense that the Government understood the scale of the changes in behaviour and processes that will be required to make the country more level.

..and doubts over delivery…

An integrated strategy for delivery is another essential requirement to drive real change. Take broadband as an example. Faster, more reliable infrastructure is a key building block to building a stronger digital economy in England’s towns, but the platform is one part of the story. The proposed increase in R&D spending across the country is welcome but vague. If we really want to strengthen the digital economy nationally then investment in identifying and developing the required skills and applications in towns is needed as is engagement with local and other businesses to establish digital jobs into towns. Four decades of failed attempts at rebalancing should make everyone aware of how difficult a task it is. The budget gave no insight into how the Government proposes to deliver the scale of activity required and the limited amount of committed projects raises real concerns about how realistic the policies are.

…mean there is a long way to go.

The next few months will reveal how ambitious the Government really is. For now, it feels like as you were with the agglomeration, city-region model continuing to dominate policy and little sign of radical moves to adopt more bottom-up, town centric approaches that will empower local people to shape their own lives. It is welcome that we are talking about “levelling up” but there is a long way to go to make it a reality.

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