Levelling Up White Paper: what to expect and what to hope for

INTRODUCTION

Now that the government’s Integrated Rail Plan (IRP) has been published (and extensively discussed on this website), the next big milestone on the levelling up agenda, promised before Christmas, is the Levelling Up White Paper.

We obviously don’t know what will be in the White Paper, but we do know enough to speculate about what might be, and we have our own ideas of what should be but probably won’t. So what should we expect?

The White Paper will be a document for England, but this blog discusses the prospects from a specifically North East perspective. It draws heavily on both the Conservative Party Manifesto of 2019 and evidence given by Levelling Up Secretary Michael Gove to the House of Commons Select Committee on Housing, Communities and Local Government on November 8.

It also draws on the English Indices of Deprivation (EID), published most recently in 2019.

To start with the Tory manifesto, and the question raised on this website on September 21: is levelling up about places or people; is it about helping deprived people in all parts of the country or about raising regions and localities – like the North East – which have lagged for decades, to reach the national average on a range of metrics from unemployment to life expectancy?

The manifesto is somewhat ambiguous. It states, for example, that the government’s plan means making sure working families get to keep more of their own money, and that they get help with cost-of-living pressures. These considerations apply equally to people wherever they may be, from Byker to Bournemouth. They involve tax policy, for example, and consumer prices. They are not place-based but spatially blind. That explains how some campaigners can see levelling up as an anti-poverty policy, including measures such as increasing the National Living Wage or Universal Credit.

But the manifesto’s introduction says: ‘There are parts of the country that feel left behind. Talent and genius are uniformly distributed throughout the country. Opportunity is not. Now is the time to close that gap’.. These are place-based sentiments and are overwhelmingly the way North East politicians – and probably people in general – think about levelling up.

This impression was confirmed by Gove in his recent evidence to MPs. he said:

‘There are four particular elements that we have stressed as critical for levelling up. The first is helping to strengthen and improve local leadership. The next is improving living standards, particularly where they are lower; that links to the economic question…The third is improving the quality of public services, particularly where they are lagging. The two often go together, but not always. The final element is helping to restore and enhance pride in place’.

Gove’s references to living standards particularly where they are lower and public services particularly where they are lagging are significant in this context. They appear to confirm that levelling up is for left-behind places.

So we should not expect the Levelling Up White Paper to be a Welfare White Paper, benefitting people throughout the country. It will, we are led to expect, be a White Paper for left-behind people in left-behind places

Against that background, it is possible to speculate what the White Paper might mean for the North East, taking Gove’s four elements of levelling up in turn and starting with improving living standards, particularly where they are lower.

  1. IMPROVING LIVING STANDARDS

There is no doubt that living standards need to be raised in all 12 local authority areas in the North East (Tees Valley included). The English Indices of Deprivation (EID), last published in 2019, rank all 317 local authorities in England according to the proportion of their neighbourhoods among the 10% most deprived nationally.

Deprivation is divided into seven domains and six sub-domains:

  • Income domain;
  • Employment domain;
  • Education, skills and training domain;
    • Children and young people sub-domain;
    • Adult skills sub-domain;
  • Health and disability domain
  • Crime domain;
  • Barriers to housing and services domain;
    • Geographical barriers sub-domain (distance to a post office, primary school, general store or supermarket; surgery);
    • Wider barriers sub-domain: (household overcrowding, homelessness, affordability; and
  • Living environment domain;
    • Indoors sub-domain (houses without central heating; houses in poor condition);
    • Outdoors sub-domain: air quality, road traffic accidents.

There are also two supplementary indices: income deprivation affecting children and income deprivation affecting old people.

As the table below shows, Middlesbrough is the most deprived local authority area in England overall and also the most deprived in the North East across five of the seven domains. It is also the most deprived in England in terms of income deprivation affecting children and the most deprived in the North East in terms of income deprivation affecting old people. Only in terms of barriers to housing and services and the living environment does it not rank among the top five in England, and in those two domains, in stark contrast, it ranks alongside the least deprived areas which have no neighbourhoods at all among the 10% most deprived and are grouped in a single rank.

While Middlesbrough stands out as the most deprived local authority area both regionally and nationally, other council areas in the North East are also seriously deprived. Hartlepool has the tenth highest level of deprivation in England overall and some other parts of the region not ranking among the ten most deprived are nevertheless seeing their relative positions high and rising. Newcastle rose between the two most recent publications of the IED in 2015 and 2019 from being 30th most deprived to 23rd while South Tyneside and Redcar & Cleveland rose to 26th and 29th respectively. Gateshead ranks eighth and Northumberland tenth for the local authorities with the largest percentage increase in neighbourhoods among the most deprived.

Though every part of the North East ranks in the 85 most deprived of the 317 council areas in England overall, and therefore stands in need of levelling up, not all are in equal need or to the same degree in all the domains. Only Northumberland, for example, requires levelling up in terms of barriers to housing and services; this may be a geographical problem related to the county’s size and the remoteness of some of its rural areas.

North East Ranking Deprivation

Each area therefore requires a tailored approach to its deprivation – something that could best be determined and managed at local level rather than from Whitehall: hence the need for more decentralisation of responsibilities and resources. This can be achieved in two ways.

One is to reverse the austerity that has cut deeply into the services provided by existing local authorities in the past decade. They know best what needs to be done in their areas but lack the resources to carry it out. Reversing austerity will take many years, according to how much the government judges can be afforded in each annual local government settlement. But the White Paper should at least commit the government to incremental increases every year until its aspirations for levelling up are achieved. The government should also complete the long-awaited Fair Funding Review for local authorities, to ensure that the extra money goes where it is most needed. This has not been been done since 2013-14 and the review has been dragging on since 2016. According to the Institute for Fiscal Studies, completing the Review is ‘vital’.

The reversal of austerity cannot be confined to the local authorities through the Department for Levelling Up but must extend to some other Whitehall departments. For example, nine of the 12 local authorities in the North East are among the 100 most deprived in the domain of education, where funding is below the England average, so action to level up, supported by extra resources for the neediest areas, will be required from the Department for Education too. News in The Journal today that Northumberland is eligible for ‘sparsity funding’ for schoos in rural areas is a welcome example of what is required across many services.

Other forms of deprivation not directly involving local authorities, or not local authorities alone, will also require the incremental reversal of austerity over many years. The Home Office will have to level up in the domain of crime (alongside local authorities as providers of children’s services) and the Department for Health and Social Care will have to level up health and disability deprivation.

The government is committed by its manifesto to recruiting an extra 20,000 police officers and claims to be nearly half way towards that target. It has pledged to provide an extra 50,000 nurses by 2025, though some have questioned whether this will be achieved.

In neither case, however, is it clear that the extra personnel will be deployed to the areas in greatest need. There may be political or personnel difficulties or resistance involved with attracting or trying to channel extra police and nurses disproportionately to deprived areas

However successful the above measures involving individual councils are, they are limited in range to traditional local governance functions. So the second way more decentralisation can be achieved is by spreading devolution more widely around the country and handing down more powers and the funding that goes with them to combined authorities like Greater Manchester and Tees Valley, or in some cases to go-it-alone county councils, as is being considered in Durham.

The Conservative manifesto addressed this directly: ‘We remain committed to devolving power to people and places across the UK’, it said. ‘Our ambition is for full devolution across England, building on the successful devolution of powers to city region mayors, Police and Crime Commissioners and others, so that every part of our country has the power to shape its own destiny’.

This commitment to universal English devolution plays an important role in Gove’s fourth element of levelling up – pride in place – discussed in Section 4 below.

Devolution until now has been directed mainly at economic development, which is a direct route to overcoming two of the domains in which the North East has long been most deprived – employment and income – as well as an indirect route to overcoming the three just discussed – education, crime and health.

Whichever of the two methods of decentralisation is used – reversing the austerity of local government as presently constituted or extending devolution – local and/or regional governance in England requires significant reform (see Section 3 below) as well as extra resources.

2. IMPROVING THE QUALITY OF PUBLIC SERVICES

There is a significant and complex overlap between the improvement of living standards and improving the quality of public services such as policing, the NHS and education. Both depend on a growing economy. As Gove said in his evidence to MPs, improving living standards, particularly where they are lower, links to the economic question and often goes together with improving the quality of public services, particularly where they are lagging, but not always.

Improving a regionally lagging economy, like reversing austerity and improving living standards, is a long, gradual business and in the case of the North East, has often achieved only limited success. The Jarrow March of 1936 remains a potent symbol of the unemployment that continued to blight much of the North East for decades, and still does. Governments and regional leaders of all parties have made repeated attempts to boost the region’s economy, from the Hailsham Plan of 1963 through Challenge of the Changing North in 1967 (Dan Smith’s plan), the North Regional Strategy Plan in 1977, the two plans produced by the Northern Regional Development Agency during its existence between 1998 and 2010, and the North East and Tees Valley Strategic Economic Plans, both in 2014.

Yet still the region has the highest unemployment in the UK outside London and, as we have seen above, is blighted by relatively high levels of deprivation across all domains except housing and access to services and the living environment.

Economic development is the key that will unlock not only the gateway to jobs and high incomes in the region but to reducing deprivation in all the other domains where the region is lagging. As the Nobel Prize-winning economist Paul Krugman once said: ‘Productivity [an economic metric] isn’t everything, but in the long run it’s almost everything’

There is no secret to the measures that need to be taken to deliver economic development. They were set out by the North East Local Enterprise Partnership (NELEP) in its Strategic Economic Plan of 2014, referred to above; namely business growth; innovation; skills, employment, inclusion and progression; transport connectivity; and investment and infrastructure.

Some progress is being made. Infrastructure developments include the International Advanced Manufacturing Park on the border of Sunderland and South Tyneside; NETPark at Sedgefield in County Durham; and the Teesworks site – though it is located in Tees Valley and no longer strictly speaking part of the North East.

The region is developing a globally significant green energy sector including electric vehicles and the batteries to power them; offshore wind; carbon capture, usage and storage; and hydrogen.

In the field of transport, the government’s Integrated Rail Plan (IRP) has been published and, while it has not satisfied many northern political and business leaders, will deliver improvements for the North East in both speed and capacity.

But gaps in local transport remain. The re-opening of the Leamside Line would connect County Durham’s former coalfield to the Tyne and Wear Metro at a cost of £600m, while the North East bus service improvement plan needs £804m over three years. White Paper support for these projects would be a sign of real commitment by the government to levelling up.

The other significant gap, as already noted in discussing the domains of deprivation, is in skills and training. If a devolution deal for a reunified North East Combined Authority (NECA) were to follow the pattern elsewhere, including in North of Tyne and Tees Valley, it would give it control over the adult skills budget –  an important tool in levelling up the economy.

Funding

NELEP (which excludes Tees Valley) was able to invest £760m over the seven years 2015-2022 (average £108m a year) from a number of sources, including the Local Growth Fund and European funding. NECA could have benefited from an investment grant of £30m a year for 30 years if it had accepted a devolution deal in 2016. Instead, it rejected a deal, the three councils north of the Tyne broke away and formed their own North of Tyne Combined Authority (NTCA) which did its own deal, elected a mayor and is receiving £20m a year for 30 years.

The White Paper should award NELEP at least £110m a year to maintain its past spending power. Other funding that should be available if the region’s seven councils do a devolution deal includes a devolved adult education budget proportionate to the £23m p.a. currently  paid to the NTCA.

There should also be a one-off £600m payment from the Intra-city Transport Fund which North of Tyne Mayor Jamie Driscoll says he has been told by ministers is available if the North East will do a seven-council devolution deal; and £804m over three years for the bus improvement plan.

This brings us to the third element in Gove’s definition of levelling up, though first in the order that he mentioned them to the Housing, Communities and Local Government Committee.

3. HELPING TO STRENGTHEN LOCAL LEADERSHIP

Though the North East has been dominated by a single party, Labour, for decades and its metropolitan heartland of Tyne & Wear still is, with the party controlling all five councils and providing all 11 MPs, its leadership is riven by mistrust, rivalry and factionalism. The evidence is documented in this author’s PhD thesis and broke into public view in 2016 when the seven councils of NECA, all Labour at the time, wrangled for months over whether to accept a devolution deal and finally split.

Meanwhile Tees Valley, which had been separated from the rest of the region by the government in 2010, has its own combined authority, deal and mayor.

Gove gave a hint in his evidence to MPs that the government will be encouraging more devolution – covering both more councils and more functions. He told the Housing, Communities and Local Government Committee:

 ‘Without wanting to pre-empt the White Paper in detail, we will be looking at mayoral combined authorities (MCAs). Should their geography change, i.e. grow? Should there be new ones? Should we give additional powers to some of those mayoral combined authorities? We will also be looking at the relationship with individual local authority areas and whether individual local authority areas…can assume a greater degree of responsibility for the functions that are currently exercised at a national level’.   

That wasn’t actually much of a revelation, more a repetition of the Conservative manifesto.

Nevertheless, it opens up a range of possibilities for the North East, the most probable ofhich are a re-unification of all seven councils in a re-constituted NECA as a mayoral combined authority, or a new mayoral NECA with six councils while Durham does a go-it-alone county deal with its own directly-elected mayor. The White Paper is unlikely, however, to impose a model on the region and, if their response to the last government devolution offer in 2016 is anything to go by, its councillors may well hesitate before agreeing to any such changes at all, no matter what the funding benefits.

Mayors are an important means of strengthening local leadership, in the government’s view. Former Chancellor George Osborne made them a condition of devolution when he launched the concept in 2014 because he saw them as both representatives of their city and accountable to its voters, as well as to ministers for the extra powers and funding handed down under devolution. He was still more explicit a year later: ‘We’re not imposing a mayor on anyone…But equally, I’m not interested in any more half-way house deals. We will transfer major powers only to those cities who choose to have a directly elected metro-wide mayor’ he said.

The White Paper, Gove told MPs, will include metrics by which the public can judge the success of levelling up. ‘We anticipate setting out some particular missions by which the government can be judged and some metrics by which we and others can be held to account’. That certainly suggests that mayors as well as ministers will be subjected to metrics, and there is no reason why local authorities, devolved or not, should not be too.

            Local government reform

Measuring the performance of local governance, including individual un-devolved councils,  and publishing the results would be a spur to local leaders to optimise performance and would thus contribute to strengthening leadership. There are other steps that could be taken too, but probably won’t be. Some are discussed here.

Decision-making should be made more open and the behind-closed-doors culture in town halls restricted as far as possible. It will never be possible to prevent groups of like-minded people getting together in private to plan their course of action, but when their decisions determine public policy there should be rules of procedure to ensure maximum transparency

That means that meetings of political groups on local authorities, which habitually gather in private ahead of important meetings to agree the party line – either in full group or in pre-meetings of committee members – should have to publish their agendas, any reports they receive, and their minutes including any voting figures.

That way, while members of the public will still not be able to attend these party meetings, they will know what was discussed, who has influenced the discussion, including any outside lobby groups, and how much support the decision had.

Improvements are needed to the scrutiny system under which the role of backbench councillors is to examine the work of the council’s cabinet and if necessary ‘call in’ decisions for re-consideration. The scholar Hellmut Wollman (pay wall) has argued that the influence of backbench councillors has been diminished by being mainly confined to scrutiny and found the relationship between scrutiny committees and those they are supposed to scrutinise to be sometimes cosy. This author found similar problems at NECA and in Tees Valley..

A solution to the problem could be found by strengthening the presence of opposition councillors on scrutiny committees and offering one or two seats to independent, non-voting  external members from the voluntary and trade union sectors. This would strengthen these committees’ independence, further embed these two civic leadership groups in governance, broaden the governance base and public engagement and act as a spur to backbench councillors. At present scrutiny committee membership must reflect the party political membership of the council as a whole, with the result that cabinet members are scrutinised by committees a majority of whose members are their party colleagues.  

Further, open meetings should be extended to Local Enterprise Partnerships (LEPs). NELEP holds its meetings entirely in private on the grounds that it deals with a lot of commercially confidential information. This is true, but there are rules under the Local Government Act 1972 which could be used to enable media representatives and the public to be excluded for items that are genuinely confidential while sitting in for other business.

Even if exclusion would still apply for a considerable proportion of LEP business, even partially open meetings would encourage media and public attendance and thereby increase understanding and accountability. Journalists would become better acquainted with LEP members, a majority of whom are from the business community, and better able to report events. Business leaders would be made to realise that they are no longer in their corporate boardrooms but fulfilling a public role.

Council leaders too, who form a significant minority on LEP boards, would be encouraged to take their responsibilities more seriously than they always have on a body on which they are supposed to provide the democratic input. Unable to control the LEP, as they are used to on their local council, they seem sometimes to lose interest. This author discovered during research that in 2017-2019 the NELEP board held no less than nine consecutive inquorate meetings and in seven of those it was council leaders whose absence caused the problem (source: NELEP website). Given that LEPs are the principal drivers of local economic policy, this is a clear example of why local leadership needs strengthening.

LEP membership should be tweaked to make it more representative. Members are mainly appointed from among the business community, with council leaders constituting a significant minority alongside a small number of representatives of higher and further education. On the NELEP board civil society organisations are now allocated one place but the trade union movement is still excluded and should get a seat too. The whole organisation should be democratised, while keeping it business-focused, by giving the council leaders the ability to outvote the business representatives by one if they can persuade all others to join them.

Another step that could be taken to strengthen local leadership would be to hold all-out elections every four years for all councils. This happens at present for Northumberland and Durham county councils but not in the five metropolitan councils in Tyne & Wear, where there is a four-year cycle with one-third of councillors facing re-election each year for three years followed by a fourth year with no elections. This means that in councils where one party has a large majority it is often impossible to replace it in one election even if there is a large swing.

All-out elections could arguably strengthen accountability and hence leadership if they resulted in higher voter turn-out. The evidence for this is inconclusive, but all-out elections once every four years could raise confidence among electors that their vote makes a difference while simultaneously strengthening council leadership through the belief that after the ballot it has a new mandate. Northumberland and Durham county councils both saw changes of control in their all-out elections in 2021 (from no overall control and Labour respectively), but across all five Tyne & Wear councils Labour has only lost control once, on one council, since 1974. That was in 2004 when there were, unusually, all-out elections following boundary changes and the Liberal Democrats gained power in Newcastle; Labour regained control in 2011 and has held it ever since.

Given that all-out elections are already therefore far from unprecedented, it would not be a risky experiment and should be made universal through the White Paper.

4. HELPING TO RESTORE AND ENHANCE PRIDE IN PLACE

This is a nebulous concept, as Gove himself conceded in his evidence to the Housing, Communities and Local Government Committee: ‘For some it is an intangible thing, but we all recognise that in some communities that are more successful, people can feel that there are focuses for local identity and their community is on the up as a result of that strong local leadership, and the private and public sectors are playing their part as well’.

In the context of ‘Reviving our Towns and Cities’, the Conservative manifesto spoke of giving local areas far more control of how investment is made. We need to get away from the idea that Whitehall knows best, it said. The manifesto speaks of everything from supporting thriving High Streets to reviving community spirit.

The £3.6bn Towns Fund is a principal driver of developing pride in place and levelling up local economies, with 101 towns throughout England invited to submit proposals, but paradoxically the Fund’s rules do not see m it give much say to local people over how the Fund is invested. The Fund’s website says that the central towns team in [the Department for Levelling Up] is responsible for ultimately receiving and evaluating the Town Investment Plans (TIPs) and business cases and facilitating the signing off the Heads of Terms.

This is centralised administration in the extreme and incompatible with the Conservative manifesto statement that the levelling up agenda means not just investing in our great towns and cities, as well as rural and coastal areas, but giving them far more control of how that investment is made. In the 21st century, we need to get away from the idea that ‘Whitehall knows best’, it says.

There has also been criticism from the Labour Party that the choice of towns favours Conservative constituencies. In the North East the selected towns are Darlington, Middlesbrough, Bishop Auckland, Blyth, Hartlepool, Redcar and Thornaby. All but Middlesbrough have Conservative MPs.

The White Paper must spell out how decisions over the Towns Fund and similar funds are to be devolved to local people. How to restore and enhance pride in place is not only an intangible concept but perhaps the element of Gove’s definition of levelling up most in need of decentralisation.

            SUMMARY

The Levelling Up White Paper can be expected to set out a place-based policy, not a people-based or spatially blind policy. It will not be a Welfare White Paper. It will be based on the four elements of levelling up identified by Gove – strengthening and improving local leadership; improving living standards, particularly where they are lower; improving the quality of public services, particularly where they are lagging; and restoring and enhancing pride in place.

Deprivation is complex, and each area requires a tailored approach to levelling up – something best determined and managed at local level rather than from Whitehall: hence the need for more decentralisation of responsibilities and resources. This can be achieved in two ways – giving more resources to local authorities in their present form or devolving more powers and resources to more mayoral combined authorities or single counties wishing to do go-it-alone devolution deals. The White Paper is expected to opt to encourage more devolution throughout England, probably including single county deals.

Whichever route is chosen, the White Paper should commit the government to an incremental reversal of the austerity of the past decade as it has affected local government, education and police budgets, as well as continuing to support the NHS budget as the nation recovers from the pandemic. The Fair Funding Review should ensure the money goes where it is most needed. Additionally, the White Paper should commit to the specific funding proposals for the North East outlined above.

The re-opening of the Leamside rail line linking the former County Durham coalfield to the Tyne and Wear Metro has not been included as a national scheme in the Integrated Rail Plan. It is unfinished business which the White Paper should support as a regional levelling up measure and find an appropriate way of funding.

The White Paper should devolve the Towns Fund, the administration of which is over-centralised – if necessary even to local authorities which do not have devolution deals.

Along with extra responsibilities and funding must go radical reform of local governance to increase transparency and encourage public engagement. The White Paper should include the reforms outlined above – metrics of performance, regulations covering behind-closed-doors decision making, all-out elections every four years, the strengthening of scrutiny and the democratisation of LEPs.

Given the funding and the reforms outlined in this blog, and several years of consistent implementation, the levelling up of the North East could just work. After almost a century of failure the region deserves nothing less.