“It’ll be over by Christmas.”
One might have expected Boris Johnson to have been wary of using this ill-famed phrase, but we head into the festive season still in the thick of Covid-19 and with Brexit negotiations still ongoing. Being mindful not to over-predict the future, there are some odds-on bets for next year in the pursuit of clean, inclusive growth. Here are four tips (and some traps) to watch out for:
1. Fiscal destruction: the outlook for the public finances is decidedly gloomy for 2021 and as yet we have seen little from the government in the way of a strategic plan. Apart from more money to spend on tackling the coronavirus – the definition of which is still fairly hazy – questions remain as to what this will mean for other types of public spending and the role government seeks to play in driving growth beyond its hope for a green industrial revolution.
In health, for example, additional sums have been promised to the NHS for dealing with the pandemic, but the Health Foundation estimates the cost of dealing with the resulting backlog will be £1.9bn a year between now and 2023/24. The task of shifting the NHS to a prevention service rather than an ill-health service has become even more urgent, just at a time when the squeeze on resources is tightening. The current NHS recruitment adverts are a recognition that more cash isn’t all that’s required either – we need more health and care staff, fast.
2. Level up, not just catch up: Jake Berry MP and his Northern Research Group (NRG) are doing a fantastic job keeping government’s feet to the fire on levelling up. The former Northern Powerhouse minister is tipped by some to be the next Conservative Party Chairman and by others as the next Secretary of State for Housing, Communities and Local Government in the New Year reshuffle. An ally of Boris Johnson and a champion of the new Blue Wall Tory MPs, Jake Berry’s star is rising. He and the parliamentary arithmetic will help to keep levelling up at the political forefront because of – not just despite – the regional impact of Covid-19.
No.10 and the Treasury sent a strong and welcome signal of intent in the announcement of a £4bn Levelling up Fund, but big questions remain as to whether and how this investment can be deployed strategically in concert with other local and regional growth and public service reform initiatives. All this while the yawning gap within and between regions grows throughout the pandemic. The Education Endowment Trust has warned that the progress made in narrowing the education attainment gap between rich and poor over the last decade was wiped out in just a few months of the first lockdown. New Tier 3 restrictions in London and parts of the South East have re-opened the debate about whether schools should close, while a fifth of secondary school pupils were absent at the last count in any case. Levelling up will need to speed up, and it will take the work of the whole of government – local and national – to coordinate their efforts, not just a single minister, external Tsar or departmental lead. CPP will build on our recent how to level up papers (A Gear Change for Growth and Beyond Hard Hats) in the spring next year.
3. Devolve or die: the local and mayoral elections in May are an opportunity to further galvanise local democratic engagement and accountability. Recent months have propelled local leaders to the fore and most have seized this moment to demonstrate the capability they have to deliver coherent, innovative and place-based change on the ground. Whitehall and Westminster must embrace local leadership as a means to achieve their ambitions and priorities. The politics can align, too; despite (at present) a largely Labour led cohort of mayors (Andy Street and Ben Houchen being two notably exceptions) the scale of Conservative majority in parliament hangs on the former Red Wall areas. ‘Getting Brexit Done’ is not the only thing that will matter here – translating that into tangible improvements in people’s daily lives will be the litmus test.
The same logic must apply if the prime minister wants to safeguard the Union. It is almost certain that the SNP will win a majority of seats in the Scottish Parliament (again) and make another bid for a second independence referendum. This bid must be granted, but with further devolution as the long-term Unionist option. The allocation of the UK Shared Prosperity Fund is a ready opportunity for Whitehall to cede ground to the Devolved Administrations as funds and competencies are repatriated from EU.
4. Radical uncertainty: not much can be known about the short-term economic projections, let alone further into the future. The prospect of a vaccine looks hopeful, but the path to herd immunity – if that can be achieved – uncertain. As Paul Collier and John Kay have written recently, policy makers need to get used to the idea of radical uncertainty and respond accordingly – using trial and error, devolving powers and flexibilities to a local government which can experiment and pilot interventions, minimising whole-system risk whilst maximising place-based system outcomes. As CPP will write next year, this approach might require new forms of accountability and could usher in new approaches to public service leadership, management and institutional collaboration.
Fear, anxiety and the unknown during the pandemic has exerted a pressure to centralize and maintain ‘grip’ at the top. Data has been presented to justify and broadcast centrally determined, non-negotiable diktats. Where negotiations have taken place, they have not only been messy but also undermined the strength of the centre (instead of fulfilling its objective of control). We have long searched for a new approach to replace the practices of New Public Management, which arose in the late 1970s and enjoyed their heyday in the early Blair era. This approach would be a crucial component in integrating tiers of governance, from the most local to the national, including the Devolved Administrations. Accepting a position of radical uncertainty would be a good place to start.
Last year I reflected on the continued stagnation of Brexit and the urgency of UN warnings on climate change. The tumultuousness of the proroguing of parliament for a while intoxicated the media, then followed a general election in which many hoped a decisive result might finally allow the UK to move on and find its feet outside the European Union. There were, as I wrote then, reasons to be cheerful about generating clean, inclusive growth with local practices and national governments across the world committed to achieving this aim. The new Conservative government wanted to do right by its former Red Wall constituencies and doubled down on levelling up. As we head into 2021, and the UK prepares to take over the G7 Presidency and host COP-26 on climate change, it is time to double down yet again; the case for green, inclusive growth is all the greater.