Levelling up needs to get real – but so does our response to it

This article originally appeared in The Municipal Journal

Levelling up is the latest buzz phrase being bandied about to address the stark divisions and variations in economic performance across the country. Whilst it is welcome that the government seems to be concerned by this unacceptable state of affairs, we must view with some scepticism a new phrase landing upon a problem which has deep and longstanding roots.

We have indeed fallen far – research undertaken by CLES has shown that many of the regions and nations of the UK have spent time in recession through recent years. We need to get real about levelling up – the scale of the challenge facing us, and the structural factors that underpin the problem.

Levelling up follows a long list of attempts by successive governments to address this national economic imbalance. These notions were first touched upon way back in 1918 by the Haldane commission. Since then we have seen attempts by the Barlow Commission in 1940, the industrial policies of Labour’s Wilson government, 30 years of economic development policy and regeneration activity and, more recently, the devolution agenda of the coalition and Conservative governments of Cameron and May.

“Financialisation is the great unleveller.”

However, in all of this there has been a failure to address both the centralisation of power and the issue of wealth. As regards wealth, the impact of financialisation is the great unleveller, where the pursuit of the greatest return sees finance flow to pre-existing winners – London, the south east and city centre agglomerations of the favoured regional cities – not those areas that need it most.

Furthermore, present UK economic policy views financial power as sacrosanct (just look at how public austerity paid and continues to pay for the bailing out of the banks). Without addressing this, any hopes for spatial rebalancing will play second fiddle to – and ultimately be undermined by – this financial power and those who have always gained most from it.

“What has been devolved is not the power to deliver prosperity, but the responsibility to deliver austerity.”

As regards devolution and power, although heralded as a ‘devolution revolution’ this process has stuttered forward with various levels of success. We have seen torturous and fraught deal making, whereby city regions (after much ‘negotiation’ behind closed doors with Whitehall and the Treasury) end up signing an agreement with only some decentralisation of power and resources. Crucially, these devolution deals have been framed by a process of unprecedented Treasury controlled public sector austerity, outweighing the positives for city regions, accompanied with significant rhetoric, spin and rebranding of existing infrastructure resources (i.e. the Northern Powerhouse). What we are seeing here is not a significant levelling up via the breaking up of central power in order to forge new economic futures, but rather power to only act within the confines of what Whitehall allows. In other words what has been devolved is not the power to deliver prosperity, but the responsibility to deliver austerity. All within a dominant market liberal economic model, with financial investment indelibly skewed to existing winners.

“To resolve this mess we need a national constitutional convention”

So that is the problem: any attempt at levelling up, no matter how noble the intentions, will be hamstrung by the dominance of financial return, coupled with ongoing austerity in the context of intense centralisation and half-hearted devolution. Devolution has been weak and created confusion. It has failed to tackle the fundamental imbalances of power and wealth. It is incrementalism, with winners and losers: unfair and not working.

Of course, these problems are not unsolvable. To resolve this mess we need a national constitutional convention, involving devolved nations, local government, metro mayors, Parliament, the business community, unions and civil society organisations. This conversation should consider how to develop an enduring package for constitutional reform and the reshaping of local government so that it sits alongside central government as a co-director of the nation. This whole conversation should form the basis to new legislation, to be taken forward by Parliament.

“In this new decade, we need to demonstrate a boldness and belligerence.”

All of this is deep reform and reorder rather than the rhetoric of levelling up from Westminster. Levelling up needs to get real – but so does our response to it. A decade of austerity and flawed devolution– despite the commendable efforts of committed politicians and council officers – should show us this is a losing game. In this new decade, we need to demonstrate a boldness and belligerence across the local government family – a willingness to hold the governments feet to the fire, and ensure their rhetoric matches the reality. Our communities and localities deserve no less.