Post-pandemic economic growth: Levelling up Contents

---

5Measuring success

67.It has been constantly repeated throughout this inquiry that, so far, the Government’s levelling up agenda lacks clear aims or milestones or any way to measure progress and evaluate outcomes. Lord Kerslake, Chair of the UK2070 inquiry on regional inequality, recommended that as well as needing a clearer definition of levelling up, the Government also had to set targets, “so we can all tell whether they have succeeded”.111 He added “levelling up is not going to happen overnight, and we need to track our progress constantly”.112 The Treasury Committee, in its report, Economic impact of coronavirus: the challenges of recovery, suggested there was a risk that levelling up would become an “empty slogan” if the Government did not “produce a strategy underpinning it that defines clear objectives and includes the indicators it will use to gauge success”.113

68.The availability and quality of local data was recognised as an important aspect of this for the Government. The Midlands Engine argued that it was “vital that the Government’s approach to regional levelling up is reliant upon the most accurate and compelling data evidence. It is only by comprehending the particular economic strengths and challenges of a region that policy can be successfully targeted, and investment unlock real growth”.114 However, Professor Pete Murphy was concerned that there was a problem with the comparisons of available data because “objectives, priorities, structures, processes, outcomes, and boundaries all differ and are changeable over time”.115 Marvin Rees, Mayor of Bristol, wanted to put the UN’s Sustainable Development Goals116 at “the heart” of the redeveloped economy117 but Lord Kerslake highlighted these were not readily measurable at local level because of the paucity of data.118

69.There have been concerns that until now the Government has been too focused on the inputs to the levelling up agenda, rather than focusing in on what it intends to achieve. For example, in moving around and (re) labelling pots of money as being part of levelling up, 119rather than focusing on measuring and identifying tangible outputs of what that funding is intended to achieve. This has been a common criticism of other Government policies. For example, the Public Accounts Committee report on the Industrial Strategy Challenge Fund120 concluded that the fund was too concerned with measuring the inputs of what was being spent rather than what was achieved with the money, such as the creation of high productivity jobs. The Committee recommended that BEIS should clarify “what it expects the fund to deliver”, including its impact on jobs and the economy in the short, medium and long term.121 Meg Hiller MP, the Chair of the Committee, said the problem was “a recurring one for too many programmes across Government”:

they are too focussed on inputs, on ticking boxes and distributing funds, rather than on outcomes. Throwing more taxpayers’ money at the UK’s notorious, long term productivity and opportunity problems, yet again without a clear, integrated plan or measures of proof that it’s working, reinforces the strong and unfortunate impression of ‘government by announcement’. Show us the government by results.122

The Government needs to be awake to the fact that levelling up could come under similar criticisms unless it focusses on clear metrics and milestones for achievement.

70.Deloitte has highlighted the multiple different forms of measurement that could potentially be used to judge the effectiveness of regional and local government and the overall success of the levelling up agenda, which included: GDP contribution, labour market participation, productivity, share of public spending, infrastructure investment (which has been the focus of most government interventions to date) or outcomes in health or education. It explained:

Some will measure the impact on places, others will measure the impact on people. Clarity on which of these provide the benchmarks for success will substantially inform and improve major policy decisions, create tangible goals, target interventions and ensure that progress is measurable.123

71.There have been other reports available to the Government on how it could measure its progress on levelling up:

i)The UK2070 Commission, chaired by Lord Kerslake, published a report, Go Big. Go Local. A New Deal for Levelling Up the UK in October 2020, which proposed that the Government should establish a national outcomes framework. Within this there are both short-term and long-term measures of success;124

ii)In May 2021, the Legatum Institute published a UK Prosperity Index 2021; it had been developed to help track progress against levelling up; and125

iii)Neil O’Brien MP and the Levelling Up Task force produced a report Measuring up for levelling up in September 2020.126

The latter report set three key tests for the Government’s success at levelling up:

• Are the bottom fifth and bottom half of local authorities by earnings growing their earnings more quickly than they have in recent years?
• Are the bottom fifth and bottom half of local authorities with the worst unemployment seeing unemployment rates falling and converging with the national average?
• Are the bottom fifth and bottom half of local authorities with the lowest employment seeing employment rates rising and converging with the national average?

He wrote for Conservative Home: “let’s hold ourselves to account, and set ourselves some ambitious goals. Let’s get earnings growing faster than before in poorer areas. Let’s get unemployment down in the places its worst. They say that “what gets measured gets managed.” So let’s “measure up” our progress on levelling up”.127

72.Politico reported that a Whitehall official had said the timing of the next election will depend on “defensible progress” made by the Levelling Up Unit, which was perceived as “key to cementing Conservative gains in traditional Labour-voting areas”. There was some cynicism that the lack of metrics so far on levelling up was because the figures may not look good for the Conservative government at the next election. Bronwyn Maddox of the Institute for Government speculated that:

not only are the manifestations of levelling-up hard to quantify, but where they can be captured in metrics, as in some aspects of health and education, many will have deteriorated since the start of the pandemic.128

73.Sebastian Payne of the Financial Times considered: “I wonder how much will actually be done on levelling up between now and the next election, because this Government have only three years to go before the next polling day”.129 Rachel Wolf,130 co-author of the 2019 Conservative Manifesto (and was an education and innovation adviser at Number 10 during David Cameron’s premiership), identified that regional productivity and innovation were vital in delivering the levelling up agenda. However, she also highlighted the necessity for identifying shorter-term gains to demonstrate achievement towards levelling up, including improvement in high streets; safety/crime; skills and training programmes; and school performance.131

74.We asked the Ministers how they were measuring their achievements towards levelling up. Minister Scully told us the Government would be:

measuring life chances, measuring inequalities, and measuring connections between areas that have underperformed, have been under connected and are less productive business wise. All of these areas will be measured and judged upon.132

75.When we asked about the exact metrics being used, we were told that government departments were using the provisional priority outcomes and metrics of the Spending Review of 2020,133 which Minister Hall sent us a copy of after the evidence session.134 Kate O’Neill, Director of Policy, Cities and Local Growth Unit, said that because it was a “cross cutting theme” multiple departments had metrics published at the Spending Review specifically referencing levelling up and that it was “embedded across all of the relevant Departments’ work”.135 For example, Minister Hall told us that for the Ministry of Housing Communities and Local Government “one clear example of ours that relates to the levelling up agenda is raising productivity and empowering places so that everyone in the country can benefit from levelling up”.136

76.Minister Scully identified four priorities in the metrics for BEIS: fighting coronavirus, tackling climate change, unleashing innovation, backing long term growth and that “within each of those four pots, we have metrics that we will be measured on. We will be developing that with the delivery unit and the levelling-up unit”.137 We look forward to viewing the metrics when the White Paper is published as Minister Hall promised:

When we come to the White Paper, that will set out bold new policies about improving living standards. We will have clear metrics about how to monitor that. Growing the private sector, spreading opportunity and local leadership, are the key parts of that White Paper.138

77.We recommend that the Government should set out what it envisages a ‘levelled up UK’ would look like and agree a set of metrics by which progress towards this vision can be measured. We recommend that the assessments should be based on measurable outcomes linked to short, medium and long-term milestones and goals. We look forward to seeing the work, which has been undertaken by Neil O’Brien MP and the Levelling Up Task Force in this regard, and expect it to be a core element of the promised White Paper.

78.The Government needs to set metrics on levelling up for each Department. Performance against these metrics should be published annually and monitored by the National Audit Office.