Post-pandemic economic growth: Levelling up Contents

4Delivering Levelling up

Devolution White Paper and Levelling Up White Paper

47.In its original submission to our wide-ranging Post Pandemic Economic Growth inquiry in September 2020, the Business Energy and Industrial Strategy department noted that:

Devolution will sit at the heart of our plans to level up, rewire our institutions and renew our regional economies post-Covid-19. The [Devolution] White Paper will set out a transformative place-based strategy to boost regional economic performance, and support the recovery in cities, towns and rural areas alongside the Towns Fund and other key programmes.70

48.On 4 May 2021, the Government announced its intention to publish a “landmark” Levelling Up White Paper later this year, which would articulate “how bold new policy interventions will improve opportunity and boost livelihoods across the country as we recover from the pandemic”.71 Andy Burnham, Mayor of Greater Manchester Combined Authority, hoped that Covid-19 had shone a light on regional inequality and devolution and that described it as a moment when “England grows up a little around devolution and the relationship between Westminster and the rest of the country”.72 He suggested that the culture was still one where Westminster held all the power and all the money and the Mayors had “to go on bended knee” and “plead” for some of that money. He stated that if things did not change:

levelling up will be a slogan rather than a thing that really happens, because you cannot level up from Whitehall. You cannot just drop projects on places and call that levelling up.73

49.The White Paper—which will be led by the Prime Minister—will focus on challenges including “improving living standards, growing the private sector and increasing and spreading opportunity”.74 Minister Hall confirmed that the Devolution White Paper would now be part of the Levelling Up White Paper and he re-affirmed the Government’s commitment to devolution in England: “we are still hugely committed to the agenda. Local leadership is a hugely important part of the wider levelling up work. It is a vital part”75 and that “we have made this clear commitment to decentralise power and to use it as an important tool for levelling up.” He said that the new combined White Paper would “contain new policy proposals” and look very closely at “devolution, local leadership and levelling up”.76

Regional delivery–Local Enterprise Partnerships (LEPs) and Local Industrial Strategies

50.The Bennett Institute for Public Policy at the University of Cambridge clearly set out the regional structures that the Government currently had at its disposal to deliver levelling up:

51.Deloitte has argued that these structures are overlapping and that clarity and consistency across the local and regional government landscape was needed.79 The CBI highlighted the challenges these overlaps created for businesses as they found “the number of different bodies, the overlaps within them and the lack of clarity of roles challenging to navigate”.80 Steve Rotheram, Mayor of the Liverpool City Region Combined Authority, recognised that it was “a very cluttered landscape”. He asked “if you are an inward investor going into an area, who do you go to? What organisation do you first approach?”81 He explained “we have a city Mayor, we have a metro Mayor, we have a Lord Mayor of Liverpool and we have five district mayors but we also have parish mayors. There are eleven people with the title “mayor” and we expect people to understand who they should go to”.82

52.Andy Haldane, departing Chief Economist at the Bank of England, said, at a recent Policy Exchange Event, that the “crucial ingredient to levelling up” was to look fundamentally at the process of regional governance and for “a comprehensive investment in the capacity and capability of our anchor institutions in each of the regions”.83 The Midlands Engine told us they had been looking forward to a ‘Devolution and Local Recovery’ White Paper to provide “clarity on local government structures and empowering local and regional organisations”.84

53.Regional and local devolution is incoherent and inconsistent across England. In some areas, this can result in duplicative and ineffective outputs. In other areas, this results in communities which feel left behind, without the support or capacity provided by other tiers of local or regional government.

54.The Levelling Up White Paper (incorporating the Devolution White Paper) needs to be bold and progressive. It should clarify which tiers of devolved and local government in England are responsible for delivering which levelling up objectives and then ensure those tiers are adequately resourced to deliver on those objectives, as well as providing fair distribution of those resources across the whole of England.

55.We noted that some regional and local authorities performed better than others, which in some cases was due to the size, institutional capacity or leadership provided within those tiers of government. We recommend that Ministers consider how to report on the effectiveness of different local and regional authorities in contributing to levelling up. Businesses and investors require clarity on who is leading the local levelling up agenda in each economic area in England.

56.The Bennet Institute found, through its body of work, that “for local plans for growth to be truly effective, we believe that there needs to be co-ordination between local and national strategies”.85 This previously was to be done as part of the Industrial Strategy through the Local Industrial Strategies (LIS) prepared by Local Enterprise Partnerships (LEPs).

57.Overall, the evidence we received about local industrial strategies in both this inquiry and our Industrial Policy inquiry was positive.86 The Industrial Strategy Council87 found that the development of Local Industrial Strategies was mostly seen by local actors as a constructive exercise that had focused minds on agreeing local priorities and achieving common goals. It reported that local stakeholders were supportive of the process of developing Local Industrial Strategies and the role of LEPs in coordinating sub-national economic policy.88 Steve Rotheram, Mayor of the Liverpool City Region Combined Authority, said to us that his Local Industrial Strategy was “critical” for his region’s long-term recovery, adding that what was needed was “sustainable, long-term funding from Government” in order to protect and safeguard jobs.89

58.We were told by Mark Bretton, head of the Local Enterprise Partnerships (LEP) network, in October 2020, that every LEP had a Local Industrial Strategies (LIS) ‘oven ready’. However, despite the fact that these LISs were “underpinning” its approach to the long term as well as to the pandemic,90 only seven had been agreed and published.91

59.There was uncertainty—following the replacement of the Industrial Strategy with the Plan for Growth—on what would happen to the remaining Local Industrial Strategies that had been prepared by the LEPs but not yet published. In correspondence, the Secretary of State said that as part of the recovery from the Covid-19 pandemic and the Government’s levelling up agenda, the Government was working with LEPs and Mayoral Combined Authority to build on “the strong evidence base and the brilliant work done to date by places across the country on the design of Local Industrial Strategies”.92 Minister Hall told us that “in the years since the local industrial strategies were produced, the business and economic environment has changed quite significantly” so there was “no longer an expectation or a requirement for those places to produce those strategies in a preferred or prescribed format or timescale”.93 Minister Scully told us:

Rather than having a single local industrial strategy, it is about working out that local economic plan that fits into the plan for growth and our other strategic documents that we have, like the R&D places strategy and, as I say, the 10-point plan.94

We also want to make sure they are addressing the new issues that have come out as a result of the crisis, which those industrial strategies were not designed to consider.95

60.Kate O’Neill, Director of Policy, Cities and Local Growth Unit, reporting jointly to the Secretary of State for Business, Energy and Industrial Strategy and the Secretary of State for Housing, Communities and Local Government, explained that instead of local industrial strategies being produced to co-ordinate with the national industrial strategy there would now be help for local areas to align to the Plan for Growth. She said that there were teams within the Cities and Local Growth Unit, which were based in the regions to build up local relationships to “help local partners work through what sensible local strategies might be”.96 These teams were providing the link between the overarching Government strategy, through the plan for growth, and the local areas by helping “signpost them to the relevant funding streams”.97

61.As we highlighted in our recent report on industrial policy, the local industrial and economic insights and intelligence that came from creating Local Industrial Strategies should not be lost. We recommend that the Government provide support and funding through its new regional Cities and Local Growth Unit teams to update and adapt the published and remaining ‘oven ready’ Local Industrial Strategies to incorporate the post pandemic circumstances and Government’s Plan for Growth. These local strategies can provide the ‘bottom up’ mechanism, for evidence to flow from the regions to the centre, informing the Government’s over-arching strategy on levelling up.

62.We also recommend that the Cities and Local Growth Unit work with the Office for National Statistics to agree a uniform set of local economic metrics to determine progress in achieving them.

Central Government

63.In March, Isabel Hardman, Deputy Editor of the Spectator, told the Lords Public Services Committee that in regard to levelling up there was “still a lot of anxiety about personnel in government—who is delivering this and who is the right person in each department to deliver it”.98 Sebastian Payne for the Financial Times said similarly that “no one is really responsible for [levelling up] within the structures of government at the moment. Nobody is particularly driving this agenda forward, apart from the Prime Minister.”99 He made the point that levelling up could be seen as big a challenge as Brexit because it affected every part of domestic policy. He recounted the personnel employed on that: a Secretary of State, four Ministers, a whole government department and over 500 hundred civil servants in the Department for Exiting the European Union. He suggested that for levelling up there should at least be: a designated levelling-up Minister in the Cabinet Office, junior Ministers in each other government department who have responsibility for that agenda, and a cross-Whitehall committee that meets regularly and is able to co-ordinate policy responses.100 Lord Kerslake had similar concerns and recommended the need for a Government Minister at senior level in the Cabinet to take the lead on levelling up.101

64.Since this evidence was taken the Government has made a series of announcements on levelling up through the media.

Neil O’Brien MP had previously set up a ‘Levelling Up Task Force’ of 41 Conservative backbench MPs in September 2020106 and authored reports on levelling up on behalf of the Centre Right Think Tank, Onward. He wrote in March 2020:

It is no wonder some parts of the country feel short-changed. For decades we have piled fertilizer on the parts of our economy that are already flourishing while refusing to water the seeds of growth elsewhere.107

He said that to change trends that had “gone in the wrong direction for decades” it would require “not a few tweaks, but taking a bazooka to the problem”.108

65.We asked the Ministers how the Delivery Unit and Levelling Up Unit would be working together. Minister Scully told us that the No. 10 Delivery Unit would look “broader than just levelling up” but would cover it as a “key delivery priority”. The Levelling Up Unit, would have the responsibility for delivering the White Paper, “working with the Departments across Government, other parts of the Cabinet Office and No. 10. This will include that delivery unit”.109 We also asked whether there was a need for a Cabinet Minister responsible for levelling up as suggested by our witnesses. Minister Scully said:

We have a clear level of coordination from the Prime Minister through this unit to make sure that we drive the agenda. I have confidence that the Prime Minister has assembled the right group to complete the task. What you have, under the Prime Minister’s lead, is my Secretary of State (BEIS) and Luke’s Secretary of State (MHCLG) driving the agenda.110

66.There should be a clear direction from No10 on which Department will be responsible for delivering which outcomes and how. We recommend that the Government establish a Cabinet Committee to oversee the co-ordination and delivery of the levelling up agenda across Whitehall, co-ordinating funding allocations and delivery with the devolved administrations in Scotland, Wales and Northern Ireland. The Cabinet Committee should engage with local and regional leaders to support the delivery of the agenda.

70 Department for Business, Energy and Industrial Strategy (PEG0287)

71Government to publish Levelling Up White Paper” 10 Downing Street Press release, 4 May 2021

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74Government to publish Levelling Up White Paper” 10 Downing Street Press release, 4 May 2021

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77 Updated following the May elections when West Yorkshire elected a Mayor.

78 Bennett Institute for Public Policy (LRS0005)

79 Deloitte (LRS0070)

80 Confederation of British Industry (LRS0017)

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84 Midlands Engine (LRS0021)

85 Bennett Institute for Public Policy (LRS0005)

86 BEIS Committee, First Report of Session 2021–22, Post-pandemic economic growth: Industrial policy in the UK, HC 385

87 The Industrial Strategy Council was set up to monitor the Government’s progress on its Industrial Strategy. It has since been disbanded along with the Industrial Strategy

88 Industrial Strategy Council, Annual Report, March 2021

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92 Letter from Rt Hon Kwasi Kwarteng MP, Secretary of State for Business, Energy and Industrial Strategy, 22 March 2021

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98 House of Lords Public Services Committee, “Levelling up” and public services, 17 March 2021,Q29

99 House of Lords Public Services Committee, “Levelling up” and public services, 17 March 2021,Q29

100 House of Lords Public Services Committee, “Levelling up” and public services, 17 March 2021, Q32

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104Government to publish Levelling Up White Paper” 10 Downing Street Press release, 4 May 2021

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Published: 22 July 2021 Site information    Accessibility statement