North East Devolution and Levelling Up

Counting the cost of levelling up

One of the most useful results of the levelling-up process will be the promised establishment of a government data and analysis strategy at the subnational level.

If that sounds a bit technical it’s because it probably will be. Nevertheless, it is likely to be welcomed, as intended, by decision-makers in central and local government and the research community.

As it is also intended in part to enable the public and simple journalists to hold politicians to account for their implementation of levelling up, it will have to avoid being too technical,.

As the Levelling Up White Paper says: ‘Good quality data, monitoring and evaluation are essential to delivering beneficial outcomes for citizens and value for money for taxpayers. For those reasons, high-quality, timely and robust spatial data are a foundational pillar of the new policy regime for levelling up.

‘Granular data are essential for understanding the UK’s complex economic geography and tailoring policy to local needs. They enable monitoring of policy impact in places, and facilitate external scrutiny and accountability of those policies, including to the general public.’

The Office for National Statistics already provides a wealth of data, but there are gaps: it is not always available at local level; if it is, it is not always timely or of good quality; it is not always comparable between the nations of the UK; and it does not always take account of emerging priorities like climate change or new industrial sectors like green energy and digital.

The North East Local Enterprise Partnership (NELEP) provides useful data on its Evidence Hub, but it does not cover everything the government is aiming to achieve through its White Paper.  

The issue of statistics came to light in a recent spat between Tees Valley Mayor Ben Houchen and the director of the Northern Powerhouse Partnership, Henry Murison, reported in the Northern Echo, over whether Tees Valley is receiving as much funding from the UK Shared Prosperity Fund (SPF) as it would have done from its predecessor European Union Structural Investment Funds if the UK had remained in the EU.

Houchen and Murison quoted statistics at each other, and this website has no intention of acting as referee. Questions that start: ‘What would have happened if…’ are always difficult. That isn’t a cop-out, or if it is we are in good company. The funding of economic development is recognised as notoriously difficult by scholars globally.

Professor Andy Pike of Newcastle University and others found in a 2015 study* of England’s (then) 39 local enterprise partnerships (LEPs) that ‘it is difficult and complex to identify sub-national resources. Multiple, varied and fluid sources of finance were evident at the local level that varied greatly in their magnitude and disclosure across the LEPs.’

In their book on the economic development of San Francisco and Los Angeles** (p. 114) Michael Storper and others note that: ‘It is a daunting challenge to get a handle on what has been done in the name of [economic development] policy in the two regions…Local and regional economic development policies and measures are carried out by a dizzying variety of governmental jurisdictions [and] agencies, aided by innumerable subcontractors and NGO grantees.

‘There are also many different kinds of policies and measures that go under the rubric of “economic development”. Sweeping claims about benefits are made by politicians, who like to confuse any employment change with “net jobs created” and all enrolees in training programs as “workers trained”.’

Newcastle University’s Alan Turing Institute held a recent debate on data at which panellists including Newcastle Central MP Chi Onwurah bemoaned the paucity and unreliability of what is available.

Even if it was possible to decide whether a particular place, such as Tees Valley, is receiving more funding from the SPF than it would have done under the EU, that would not settle the matter, for regional development in the UK has received and continues to receive funding from what Storper and his co-others called a ‘dizzying array’ of sources (above).

The Levelling Up White Paper (Figure 2.2) lists no fewer than 15 local growth funding pots introduced in the UK at different times and for different periods since 2011-12. It is worth listing them to get an idea of their scope and size:

Regional Growth Fund (£3.2bn), Growing Places Fund (£0.73bn), Enterprise Zones (£0.27bn), City Deals (£2.3bn), Coastal Communities Fund (£0.23bn), European Structural Investment Funds (£14bn), Local Growth Fund (£12bn), Transforming Cities Fund (£2.45bn), Towns Fund (£3.6bn), Getting Building Fund (£0.9bn), UK Community Renewal (£0.22bn), Levelling Up Fund £4.8bn), Freeports (up to £0.2bn), Community Ownership Fund (£0.15bn) and UK Shared Prosperity Fund (over £2.6bn).

Even this list is not complete. It is not include the annual investment grants being paid to mayoral combined authorities for 30 years (Appendix 1): Greater Manchester (£30m), Sheffield (£30m), Tees Valley (£15m), Liverpool £30m), West Midlands (£36.5m), Cambridgeshire/Peterborough (£20m), West of England (£30m), North of Tyne (£20m), and West Yorkshire (£38m). The North East Combined Authority (NECA) rejected £30m a year when it voted against a devolution deal in 2016.

Nor does it include the City Region Sustainable Transport Settlement of £5.7bn, which has been allocated to Greater Manchester (£1.070bn), South Yorkshire (£570m), Tees Valley (£310m), Liverpool (£710m), West Midlands (£1.050bn), West of England (£540m) and West Yorkshire £830m). The North East could have a share of up to £620m if it did a regional devolution deal.

The sub-national data strategy will not prevent all arguments about funding for levelling up, or whether it is being well spent or achieving the desired objectives. It may not even provide a factual statistical basis which everyone accepts; there are always likely to be challenges. But it will at least, it is hoped, bring something useful and reasonably comprehensible to the debate.

*Local Institutions and Local Economic Development: The Local Enterprise Partnerships in England 2010- , by Andy Pike, David Marlow, Anja McCarthy, Peter O’Brien and John Tomaney. Cambridge Journal of Regions, Economy and Society, July 2015, Vol. 8, Issue 2, pp. 185-204

**The Rise and Fall of Urban Economies: Lessons from San Francisco and Los Angeles,  Michael Storper, Thomas Kemeny, Naji P. Makarem and Taner Osman. Stanford University Press, 2015.