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Time for ministers to level with us on 'levelling up'

More definition is needed to turn 'levelling up' from slogan to reality as restrictions hit some of the UK's most deprived regions

Ask Liverpool mayor Steve Rotheram about the Government’s ambitions to “level up” the country and you’ll probably get a hollow laugh. Today he finds his city at the sharp end of punitive local restrictions following a spike in Covid-19 cases, and a “non-negotiable” financial package set to cut affected workers’ salaries by a third. No wonder he and other northern metro mayors are considering legal action against the fiat of ministers acting without democratic scrutiny.

But even before the pandemic, Liverpool was up against it. Along with Middlesbrough, Knowsley, Kingston upon Hull, and Manchester, the city takes its place in a dismal list of the five local authorities with the highest share of deprived neighbourhoods in England. If ever there was a candidate for levelling up, Liverpool is it - but the response to the pandemic instead looks likely to hammer it further into the economic dirt.

Let’s not be naive here: Covid-19 loves deprivation. People living in cramped conditions aid the spread of the disease; they’re less likely to have jobs that can be done from home, more likely to have to work if they do show symptoms, and they’re more likely to have the underlying health problems that make the virus a killer. The pandemic was always going to run riot in places like Liverpool.

But aside from the immediate financial support to weather potentially months of closures, what Liverpool and other proud cities and towns of the UK need - and have every right to expect - is hope, and at least a hint of a longer-term strategy. Almost a year after a crushing election win that offered the opportunities of Brexit and a new epoch for the country, the “vision thing” is absent.

That the Government has its hands full with the virus response doesn’t appear to prevent regular briefings against its targets, and an example of its bizarre sense of priorities came in June as it folded the Department for International Development back into the Foreign Office. What we have heard far less on is the “levelling up”, which is supposedly the raison d’etre of the Government’s mission.

In Boris Johnson’s conference speech last week, it got precisely two mentions and one paragraph. Those were platitudes about keeping the “streets safer for everyone” and “changes in the lives of young people”. So far, so vague. But what does the concept mean and how will it be defined? We have seen little clarity as yet from ministers despite the recommendations of the new Levelling Up Taskforce. In September, its 40 MPs argued for a focus on moving the bottom 20pc of local authorities towards the national average on benchmarks like employment and earnings. 

The scale of the problem is underlined by the Institute for Fiscal Studies’ Green Budget chapter on the subject this week. The UK ranks at the top of the table on regional economic inequality on the “90:10 score”, with GDP per head in the 90th percentile region - Aberdeen - some 2.25 times higher than in Durham, the 10th percentile.

But “levelling up” has now become a far thornier task thanks to the virus. According to the IFS, there is little overlap between regions traditionally classed as “left behind”, and the areas that have suffered the most from Covid-19. The first camp takes in the towns outside London and the South East, the “red wall” seats in places like the North East, Yorkshire and the North West, the deindustrialised former mining and steel regions of South Wales, South Yorkshire and around County Durham, and the former textile towns where long-term unemployment is rife. Then there are the coastal towns like Blackpool and Great Yarmouth, blighted by the decline of the fishing industry, reliance on tourism and poor transport links.

In the second camp hit hardest by Covid-19 are the rural and coastal areas dependent on hospitality and tourism, the bigger hospitality-dependent cities as well as parts of the capital geared up to serve workers who have largely disappeared.

But according to the IFS, there are only 16 local authorities out of 369 who are in the worst hit 20pc on both “left behind” and “Covid-19” scores - although the centres of Manchester, Liverpool and Newcastle are among them. Other traditionally left behind areas are less likely to be dependent on tourism and consumer spending. As the Institute says: “The effects of the pandemic bear little relationship to more traditional measures of economic disadvantage in the UK. This is likely to complicate the picture when deciding which areas to target for ‘levelling up’.”

The concept is generally viewed in terms of investment spending, but the problems and potential solutions are not uniform. For towns near prosperous regional cities, increased transport cash to aid commuting may be part of the answer, but for those places not in range of somewhere else more skills training or local support for businesses could be more useful; that is, current as well as capital spending. The Covid Recovery Commission, a coalition of business leaders and charitable bodies, picks up on this point in arguments for a more surgical neighbourhood-led approach to levelling up, as well as more devolved decision-making.  

But that process will be more difficult against a backdrop of local governments blunted by spending cuts seen since 2010. Even though the Government announced a new £3.6bn Towns Fund last year, we are also still awaiting details of the “Shared Prosperity Fund” which is due to replace the £1.4bn a year received from European regional development funds, which vanish in 2021.

To turn “levelling up” from soundbite into reality, above all we need definition. Ministers should set out their targets in a White Paper with clear goals tailored to the individual challenges of regions - be it in job creation, earnings, or educational and skills attainment - and then shoot them through every policy like a stick of rock. The old saying that “if it isn’t measured, it isn’t managed” has never been truer.

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