Unveiled in the Queen’s Speech, the Levelling Up Bill is the latest instalment of the government’s flagship agenda after February’s White Paper. It creates a statutory basis for the new forms of devolution deal that the government wants to pursue in county areas, makes it a legal requirement for the government to set medium-term targets on reducing regional inequality, and provides several other local powers around planning and high street regeneration. 

While these measures – especially on devolution – are welcome, on their own they are not enough to meet the government’s 12 missions for reducing regional inequality by 2030. And although other bills in the Queen’s Speech – for example on education, planning and infrastructure – may also contribute to levelling up, the government will need to do more to make a big dent in regional disparities. 

The government needs to prove it is serious about simplifying funding to devolved areas 

As we argued in our response to February’s levelling up white paper, the government’s ambitious plans for devolution in England are  essential to meeting the objective to empower local leaders and communities. The new Levelling Up Bill is a necessary next step to advance these proposals, supporting the government’s aim to offer every part of England a devolution deal by 2030. 

The bill also provides a new source of funding for councils, who will be given a fixed share of a new Infrastructure Levy on local developments. However, the money involved is likely to be very small as a share of overall council budgets, and it falls far short of the government’s ambition in the white paper to simplify local government funding. As it stands, local government must bid for funding for different projects across a series of different competitively-allocated pots, an approach which uses up time and resources and which stymies long-term strategic thinking. Further simplification of funding streams, by moving away from a reliance on these competitive pots, will be an important part of making new devolution arrangements work and should be a priority for the government. 

A new requirement to report annually on progress will not be enough to keep things on track 

February’s levelling up white paper recognised that levelling up needs to be embedded as a priority throughout Whitehall. The proposed mechanisms for achieving this – setting medium-term missions and reporting annually on progress – make an appearance in the Levelling Up Bill, and the government is right to recognise that previous attempts to reduce regional inequality have been hampered by policies changing too quickly. However, the latest proposals do not guarantee this time will be different.  

Our recent research on the 12 levelling up missions argued that these are not all ambitious or clear enough to drive the change required to deliver levelling up. The new bill allows the government to adjust the missions over time, rather than specifying that the existing targets should become law; this is the right way to ensure flexibility and the government should use this opportunity to recalibrate the targets as required. 

However, annual reporting alone will not be sufficient to ensure the missions drive policy as intended. There should be clear lines of accountability within government, with a single department leading on coordinating efforts to achieve each mission. The Outcome Delivery Plans (ODPs) – performance management documents for each department – will be one way to develop these accountability structures. These are developed by departments and scrutinised by the Treasury and the Cabinet Office, and will be updated annually, though with the expectation that the main outcomes for each department will last for the length of each spending review – so current plans will last until 2024-25. The government should strengthen its delivery plans for levelling up when revised ODPs are published in the summer.  

Quick wins on making town centres look nicer are not a long-term fix 

For levelling up to work in the long-term, it needs to be about transforming the economic fortunes of ‘left-behind’ areas. Levelling up has always been about more than just economic outcomes, but other dimensions of inequality, such as the attractiveness of different places to live, often depend on economic success.  

So far, lots of government announcements have focused more on cosmetic fixes rather than bold policy solutions to regional economic imbalance. Things like improving town centres, prioritising the environment in planning, giving residents more of a say in street names and protecting al fresco dining – all badged as ‘main elements’ of the Levelling Up Bill in the explanatory notes to the Queen’s Speech – may be relatively ‘quick wins’ ahead of the next election and might make progress towards the mission on giving people more pride in their local areas, but cannot be a substitute for addressing the stubborn gaps in productivity between different regions of the UK. This is especially true when, as Michael Gove recently conceded, the cost of living crisis will make tackling regional inequality more important than ever but also harder to achieve.

The fate of levelling up risks subsumed by the government’s larger economic woes. Progress on English devolution is welcome, but choosing street names or standing up for al fresco dining is nowhere near bold enough if the government wants to fundamentally reshape the economic geography of the UK.  

Original source – The Institute for Government

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