North East Devolution and Levelling Up

Levelling Up consensus starts to emerge

It is no surprise that a left-leaning, or ‘progressive’, think tank based in the north of England should find that, in spite of all its rhetoric, the government is not doing enough to level up the north.

That said, there is much in the annual State of the North 2021-2022 report published today by IPPR North, the Institute for Public Policy Research, that this politically independent website can agree with – and indeed, has been advocating for months. Not least among the aims we have in common is the need to close the gap with the rest of England in educational attainment and the importance we place on the green industrial revolution as a driver of the region’s economy.

The IPPR critique of the government’s steps so far to level up the north is persuasive. ‘New funds such as the Levelling Up Fund (LUF), are welcome’ it says, ‘but they don’t go far enough. The £0.5bn allocated to the north from the LUF represents an investment of just £32 per person… This compares to the £413 per person fall in annual council service spending from 2009/10 to 2019/20. Meanwhile, new funding streams continue to be competitive and controlled by the centre’.

On jobs, says IPPR North: ‘[W]e find significant gaps between productivity, earnings and access to good jobs when we compare the north to other parts of England. For every job created in the north, just under three were created in London and the Greater South East’.

On education, this website’s top levelling up priority, it says: ‘[W]e continue to see a large attainment gap between the north and the rest of England at every level of assessment, from Early Years through to GCSE level and beyond. Closing this gap and providing people with the skills they need to access productive, high-skilled jobs will be crucial if we are to address widening economic divides in the future.’

And on the green industrial revolution: ‘[D]espite the north being home to many of the assets that are needed in order to transition to a greener and more sustainable future, the region remains held back from shaping its own net zero future. This is typified by the fact that while the north generates more than 50% of England’s renewable energy…the promise of widespread green jobs seems like a distant prospect in many places.’

The green industrial revolution is this website’s main reason for cautious optimism about the future of the North East economy, as we explained on August 19, though this, we believe, has little to do with politicians, local or national, and much more to do with the private sector seeing an opportunity.

The IPPR report is the second within a few days to make broadly the same points about what needs to be done to level up economically lagging regions like the North East, and not just from a left-of-centre viewpoint. As we reported here on January 14, the Northern Powerhouse Partnership (NPP), a voice for political and business leaders in the north, has also just come out with a plan which this site can endorse.

Support for the levelling up agenda developed on this website over recent months, based on raising educational attainment and backing the green industrial revolution, is therefore building. It is notable, too, that neither the NPP nor IPPR North lay great stress on transport, the subject that dominated the headlines in the autumn as northern leaders lined up to express outrage after the government scrapped plans for high-speed rail between Birmingham and Leeds (HS2b) and downgraded Northern Powerhouse Rail (NPR), the plan to improve the line between Manchester and Leeds. This website was alone at the time in taking the government’s decision in its stride.

We have one important reservation about the IPPR report, however. While we agree that there is some cause for optimism, our reason for it is different. In our case, as mentioned above, we hope that the green revolution will give a boost to the North East economy. While the IPPR also places hope in green jobs, it also says:

‘[Our] report shows that across the north’s institutions and people at all levels – combined authorities, mayors, councils and community groups – are already doing the things needed to level up.’

We wish that was true of all the North East’s councils. But more than five years after the old North East Combined Authority (NECA) voted 4-3 to reject a government devolution offer and £30m a year for 30 years, the four south of Tyne councils are still showing no sign of re-joining their North of Tyne counterparts, who do have a deal.

This lack of unity is already costing the region hundreds of millions pounds that it – like all other areas with devolution deals – could be picking up from the City Regional Sustainable Transport Settlement, as well as putting it at a disadvantage in the competition for cash from the Levelling Up Fund, Towns Fund and soon-to-be-distributed UK Shared Prosperity Fund, as well as other economic benefits going to devolved areas like Tees Valley.   

We agree with IPPR North when it says: ‘We need to further empower those across the north who are already levelling up for themselves, and make sure no place or community is left behind. Achieving this requires, in the first instance, a profound shift of vision on governance: broadening and deepening devolution, while also promoting a collaborative approach across all levels, from the centre down to local communities.’

‘From large cities to small towns’, it adds, ‘all areas must be able to benefit from devolution: no place or communities should be left behind. This would represent a real transformation in the way England is governed, bringing power closer to people. To be successful, this strategy requires all levels of government – central, regional, subregional and local – to work as a team: moving past competition and embracing an ethos of collaboration that starts from the centre and delivers all the way down to communities. This is key to giving people the power to shape their lives.’

While these comments are implicitly directed by IPPR North mainly at the government, in the North East they need to be taken to heart by councillors as well, particularly those in the four south of Tyne councils of Gateshead, South Tyneside, Sunderland and County Durham, who are still holding the region back by their failure to think again about their short-sighted decision to reject a devolution deal in 2016.   

IPPR North proposes three missions for a prosperous north which it says offer a clear roadmap for central government, mayors, combined authorities, local government and communities to ensure levelling up succeeds:

1. building a new economy that promotes widespread prosperity;

2. making the north the engine of the net zero transition;

3. providing everyone with access to high-quality, life-long education.

As with the eight-point plan produced by the NPP last week, this website finds little to disagree with in the IPPR North proposals. Indeed, while somewhat blandly expressed, they are closely aligned to our own ideas. But how far Levelling Up Secretary Michael Gove will also agree when he publishes his delayed Levelling Up White Paper remains to be seen. And even if he does agree, how much funding will he be able to provide to bring them to reality? Very little, is our expectation.