The government must “think big” and spend more if it is serious about levelling up the UK’s regions, an independent inquiry has said.
An extra £200bn of regional funds should be channelled to disadvantaged parts of the country over the next two decades, the UK2070 Commission said.
The report concludes policies need to cover longer timescales and feature stronger pan-regional collaboration.
It said regional inequalities have “blighted” Britain.
“Many people in Britain feel left behind by growth elsewhere and that has contributed to an acrimonious debate about Europe. We now face a decade of potential disruption – leaving the European Union, confronting the impact of climate change and adjusting to the fourth industrial revolution,” said commission chairman Lord Kerslake, a former head of the civil service.
The report blames “an over-centralised system”, as well as policies that were fragmented, under-resourced and too short-lived.
“We cannot afford to keep on repeating those mistakes. Government must therefore think big, plan big and act at scale. Bluntly, if it can’t go big, it should go home,” Lord Kerslake said.
Following the election in December last year, Boris Johnson pledged to “level up” left-behind regions, after several northern constituencies elected Conservative MPs for the first time.
A lot has been promised by the government about “levelling up” and the regions have heard the political rhetoric coming from the top loud and clear. But what exactly does it mean?
This report is one of a number seeking to take the political rhetoric from the 2019 general election and turn it into a plan, and, frankly, demands for funding.
The UK2070 report, backed by many independent elected mayors, focuses on a variety of different elements driving regional inequality in the UK. It ponders the question as to why the UK is one of the most regionally unequal advanced nations in the world.
The basic answer is that the unbalanced British economy is a choice, the reflection of decisions, and with the right long-term thinking, it could be rebalanced.
As the name of the 2070 project suggests, its aims are long-term. And the central demand beyond better transport and more devolved powers is that post-Brexit regional funds need to be trebled to £15bn a year – providing £200bn more to transform Britain’s economic geography and spread growth and opportunity to every corner.
The UK2070 Commission was set up in July 2018 to look at the longer-term causes and future policy implications for the regions. It is a collaboration between several UK universities and is supported by the Sykes Charitable Trust and the RSA.
Its final report recommends tripling the amount of funding that would have been directed to regions from EU grants. It proposes £15bn a year be channelled through the new Shared Prosperity Fund, which is due to replace EU funding at the end of this year.
The report “Make No Little Plans: Acting At Scale For a Fairer and Stronger Future” calls for the government to make a public pledge to tackle inequality. As well as the increase in expenditure on regional development it calls for:
- investment in a “new connectivity revolution” including spending at least 3% of UK economic output on infrastructure every year
- creation of “networks of excellence” in research and development to match the London, Oxford, Cambridge triangle
- devolving power and funding away from London
- strengthening local economies in disadvantaged towns
- policy links between the shift to a zero-carbon and rebalancing the economy
“We also need to recognise that the price of failing to reverse this decline will far outweigh the cost of investing now in creating greater opportunities. Properly investing in levelling-up will come at a cost but so will doing nothing about it,” Lord Kerslake said.
Public spending is currently required to deal with the consequences of an unbalanced economy; investing in levelling-up could raise low incomes and reduce welfare spending, the report said.
Average household wealth fell by 12% in the North East and East Midlands between 2006 and 2018, but grew by nearly 80% in London and by over 30% in south-east England, the report said, citing Office for National Statistic figures.