Driving growth and shared prosperity

A joint report by CPP and the Northern Research Group

16 September 2021

By Charlotte Alldritt and Ben Franklin

4 minute read

CPP and NRG have produced a new research paper which makes detailed policy suggestions to deliver levelling up and create opportunities for all.

Levelling up is the government’s election-winning, flagship domestic policy promise. It has been defined loosely so far as a commitment to enhancing economic opportunities for all regions and nations of the UK, especially outside London and the Southeast.

The Prime Minister has reiterated his commitment to levelling up as the government’s flagship domestic policy agenda, given renewed impetus as we emerge out of the pandemic. This joint report by the Northern Research Group and Centre for Progressive Policy is designed to feed into the development of the government’s White Paper and the Comprehensive Spending Review later in year. But it also seeks to establish levelling up as a fundamental principle for the government’s wider macroeconomic strategy.

To be successful, levelling up must not only tackle decades of social and economic inequalities in many parts of the North of England and other so-called ‘left behind’ places across the UK. It must be a driver for a new approach to growth and shared prosperity in the UK.

The government’s vision for levelling up has its origins long before the pandemic hit the UK in early 2020. Deep regional imbalances and socioeconomic inequalities have been a pervasive problem for decades – impacting households and communities, and undermining productivity and inclusive growth. Successive governments have tried to make inroads on these challenges, with limited success. The pandemic has made the task even harder.

The current government has set out its commitment to levelling up time and again, with proposals such as the Levelling Up Fund and the future UK Shared Prosperity Fund. These measures will go some way to making a difference – particularly in terms of investing in physical infrastructure projects and the quality of our high streets, often a powerful symbol of a place’s success, or decline. But one-off spending on improving the built environment will only get us so far.

Previous governments’ actions have shown the limitations of regeneration-led approaches to local growth and shared prosperity. While there have been some prominent success stories, particularly in our major cities, regeneration only reaps rewards when it helps to crowd in private sector investment, creates new and better jobs and links people to new education and employment opportunities so they can take advantage of a virtuous circle of inclusive economic growth. New transport routes are only as productive as the people and places they connect. For levelling up to be transformational rather than piecemeal, and sustainable rather than a short-term sticking plaster, it needs to be focus on the education, skills, health and resilience of our communities. Done fully, this will take the work of a generation.

Over the long term the Northern Research Group and Centre for Progressive Policy call on the government to measure the success of levelling up against four key tests:

  • Test 1: Halving the gap in skills and good jobs by 2030 between places with the highest and lowest levels of productivity and employment across the UK.
  • Test 2: Halving the gap in healthy life expectancy by 2030 between nations, regions and local authorities across the UK.
  • Test 3: Closing the gap in public sector spend on research and development (R&D) and halving the gap in private sector R&D spend by 2030 between those regions with the lowest levels of investment and those with the greatest.
  • Test 4: Reducing by half the educational, health and income inequalities between and within places across the UK by 2030.

Recommendations

However, there are things that can be done that will garner results in the short-medium term and pave the way for deeper change. The Northern Research Group and Centre for Progressive Policy therefore call on government to reinforce its levelling up agenda now and for the long term in three ways: