North East Devolution and Levelling Up

Levelling up – is it for places or people?

Two recent reports present very different approaches to levelling up and raise three big questions: is levelling up about places or people; how heavily dependent is it on government hand-outs as opposed to self-help; and if the latter, should individuals help themselves or should action be channelled collectively through communities?

The unspoken assumption in the North East for decades has been that levelling up is about place and that it is the government that is primarily responsible – at least for kick-starting the process with large cash injections.

North East politicians have for many years looked at the region’s statistics – and seen that whether it is jobs (as it usually is), life expectancy, educational attainment or any number of other measures, the region is lagging.

The conclusion they have always drawn is that the government should ensure more investment in the region, either through direct public spending or by encouraging the private sector with subsidies. That might be correct in theory, but in practice it has failed because governments have always responded half-heartedly, as the Prime Minister has admitted

This place-based based approach has been going on for 60 years or more; it was the assumption behind the Hailsham Plan of 1963, Dan Smith’s plan of 1966, the North Regional Strategy Plan of 1977, the creation of the regional development agency in 1997-98 and its two plans over the next 12 years, and of the local enterprise partnerships in 2010-11 and their various plans, which are still being followed today.

It was the assumption, too, behind the North East Combined Authority’s (NECA’s) rejection of a devolution deal in 2016. Rather than seeing devolution as a first step towards collective regional self-help, council leaders from Gateshead, South Tyneside, Sunderland and County Durham disdained the government’s £30m a year offer for 30 years as not enough.  

The councillors’ approach was both place-based – they wanted money for their region which they could then share out between their municipalities – and government-dependent.

This approach was confirmed at Transport for the North’s (TfN’s) annual conference yesterday, when Greater Manchester Mayor Andy Burnham, according to a report in Northern Agenda, told his audience of civic and business leaders that they must focus on ‘the big picture right in front of us’, by which he meant the hundreds of thousands of new jobs that could be created if the north’s transport system was brought up to scratch.

If. Upgrading the north’s transport, including the trans-Pennine Northern Powerhouse Rail and the eastern leg of the high-speed rail network (HS2) would inevitably require government funding, and this government-dependence is, surprisingly perhaps – except we have got used to it – shared by the business community.

Only a few days ago the leaders of seven chambers of commerce in the north, including the North East Chamber, sent a letter to Transport Secretary Grant Shapps making the case for large-scale investment in the rail network, including Northern Powerhouse Rail and HS2.

The North East Chamber’s director, James Ramsbotham, said: ‘It is essential that the eastern leg of HS2 is not scaled back, as this would increase regional disparities and do nothing to improve rail connections in the region. We need both the east and west sections completed to truly level up the north’s rail infrastructure and unleash its economic potential.  The economic benefits of this investment would be transformational.’

The supporters of big infrastructure project like these may well be right that they will bring proportionate economic benefits, but at huge expense and there are those with other ideas about how better to approach the levelling up issue.

The Free Market Forum (FMF), with its low-spend, low tax and limited regulation philosophy and the Commission into Prosperity and Placemaking with its community-based approach, featured on this site in recent days, are both very different in their own ways from the place-based, government-dependent approach discussed above.

But they have it in common that both are less dependent on the government than regional leaders, at least to the extent that they do not put their faith in large, costly infrastructure – the FMF less so than the Commission. And while the Commission is still place-based, the places at the centre of its focus are neighbourhoods rather than regions or even municipalities, and the emphasis is on community engagement. The FMF is even more reliant on the efforts of individuals, rather than communities, with government’s role being to create the right conditions to allow entrepreneurship to thrive wherever it may arise, in what academics call a spatially blind approach.

Evidence is mounting that when the White Paper on Levelling Up appears this autumn the emphasis will be on people, wherever they are, at least as much as on place, and where it is on place it will be on local services and amenities. Politically, several factors are coming together in support of the spatially blind approach combined with localised improvements rather than grand infrastructure projects.

Research by Ipsos Mori shows that what people want most is opportunities and facilities for children and young people (30%) and a range of shops, banks and post offices (30%).   

Most people are already satisfied with hard infrastructure such as internet access (80%) and hospitals and healthcare (65%) but fewer with social infrastructure such as job opportunities (26%) and social care for the old and vulnerable (34%).

As far as transport is concerned, more people are dissatisfied with local public transport (21%) than with links to the rest of the country (17%). This is just as well: HS2 is probably just too expensive to extend to the North East; this website has already revealed that it is officially categorised as ‘unachievable’.

Local leaders in London and the South East argue that they as well as those in the north and Midlands have people who are deprived and left behind. Followers of this website will know that the leader of the Royal Borough of Kensington and Chelsea has spoken recently of inequalities within as well as between regions.  

The Commission on Prosperity and Placemaking highlighted case studies in the South East as well as the North East, in Hastings as well as Sunderland.

The Chesham and Amersham by election in June, when the Conservatives lost a previously safe seat in Buckinghamshire to the Liberal Democrats, was a reminder to the Tories that levelling up the north and Midlands cannot be allowed to be seen as at the expense of the south. As Richard Holden, Conservative MP for North West Durham, wrote at the time: ‘Levelling up is an agenda for everyone because it’s explicitly not about taking from one to give to another’. 

According to Neil O’Brien, a minister in the new Department for Levelling Up, quoted by Ipsos Mori: ‘Levelling Up should be not just about geographical areas but about people’. This is perhaps the most important quote of all, for O’Brien will have significant input into the White Paper.

Overall, while Gove and his team are serious Whitehall players and can be expected to deliver the best levelling up that is realistically possible when the White Paper is published, North East leaders should not expect any special favours for the region as such and certainly not huge sums for grand vanity projects. More likely is more support for local services like youth clubs and libraries, subsidies to get high streets and shopping centres back in business and modest improvements to local public transport infrastructure.  

Any place-based as opposed to spatially blind handouts that are available are likely to continue going to combined and county mayoral authorities with devolution deals, which the North East south of the Tyne (Tees Valley excluded) does not have, thanks to its short-sighted rejection of a deal in 2016 and negligent failure to correct its failure ever since.