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Britain after Brexit: An agenda-setting budget

It is time to deliver on those promises…

On coming into power, the Government promised to level up the country and move the country to Net Zero by 2050. Both are popular policies: research by Kings College published last week identified geographic imbalances as the inequality of most concern to the public; and our research with the European Climate Foundation found strong support across the whole country for action to protect the environment.

With the vaccination programme in full swing and a trade agreement with the EU signed, the 2021 budget offered the perfect opportunity for the Government to outline how it plans to smooth the transition out of lockdown and to set out its vision for the economy. For towns, the two are closely linked: after the huge shock of the pandemic, further support is needed to ensure places emerge with the capability to benefit from the promised economic transformation.

…spending money is easy…

Over the last 12 months, the chancellor has become experienced at giving away money and continued to do so: support for business on rates, VAT and loans; an extension of furlough and a £20 uplift in Universal Credit to help individuals; and an extension of the stamp duty holiday to keep the housing market steady. In addition, in a welcome recognition that just more of the same will not be sufficient to support a strong recovery, more needs to be done, the chancellor announced a series of more targeted initiatives: Restart grants for the hospitality, personal services and retail sectors; support funds for the arts and sport; training and apprenticeship funding to help young people into the labour market.

Taken together, the extension of support will be strongly welcomed in towns. Nevertheless, many places will be limping through until May/June. Looking beyond the immediate challenges, the lack of any major boost to funding for local authorities and the NHS, an absence of initiatives to help the social care sector and no attempt to address the problems facing those self-employed people, not covered by  the schemes deployed to date, will create real hardship and pressure in key sectors of local economies.

… but delivering transformational change is hard…

Businesses, investors and the public have all heard the messages on “Levelling up” and “Net Zero” but want to see the details. The budget was the chance for the chancellor to set out the Government’s vision for growth – towns are still waiting.

The chancellor outlined a number of initiatives to support the shift to “green” the economy including the establishment of a UK Infrastructure Bank. Moving some of the Treasury to Darlington, awarding 45 towns deals totalling around £1 Billion out of the Towns Fund revealing the names of the 8 places successful in the bidding for a freeport were the major initiatives in support of geographic rebalancing. It is a PR plan rather than an economic and social transformation strategy: insufficient resources and no integrated vision.

This lack of joined-up thinking will lead to missed opportunities. The proposed major boost to capital allowances for 2 years is a truly bold policy. With supply chains in flux all around the world, the UK, especially the manufacturing sector that is so important to towns, could benefit dramatically. However, the failure to update the Industrial Strategy from the bottom up (something we first proposed over 2 years ago) means there is no plan in place to ensure the UK’s maximises this one-off opportunity.

…levelling up requires letting go.

As long as the Government continues to believe levelling up can be achieved by a top down programme, its ambitions will not be met. Four decades of failed attempts to rebalance the UK geographically confirm beyond any doubt that top down solutions won’t work. We have to trust, empower, resource and enable places to shape their own futures.

Relocating the Treasury is not how to do this. A much more fundamental shift to local first is required. For relocation of central Government, the approach should be to relocate capability in all departments and put them at the disposal of local bodies to provide support and specialist expertise as required. All of the learnings should be aggregated and shared with the centre to ensure co-ordinated activity and to help develop national plans that are built up from local knowledge of what is required. To level up you have to start local.

Back to the drawing board.

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