The British government’s flagship ‘Leveling Up’ policy has been a failure

New independent research shows that the British government’s flagship ‘Leveling Up’ policy has been a failure.

The policy was launched by the Conservative government in 2019, saying it would reduce inequality depending on where people live in the UK.

However, according to the National Institute of Economic and Social Research (NIESR), “there is very little sign of leveling up, and the gaps in living standards and productivity between the various regions of England and the devolved countries of the UK remain unchanged or widen since the last general election.”

The Leveling Up process – set out in the 2022 White Paper – aimed to reduce the economic and social gap between the UK’s nations and regions by 2030.

Brexit

The UK government has set up a range of funds, including the Shared Prosperity Fund (SPF) and the Level Up Fund (LUF), to replace EU funding post-Brexit.

The Welsh Government argued that Wales would receive £772 million less in SPF funding between January 2021 and March 2025 compared to the amount it would receive from EU structural funds.

The UK government argued that previous EU programs had “risen and fallen” and that its funding obligations would be met by a combination of EU funds from the 2014-2020 program and investment through the SPF.

Efficiency

New research from NIESR shows that the gap in living standards between London and the south-east and north-east of London has increased, and the productivity gap between London and the south-east and the West Midlands has also widened. Projections for living standards and productivity suggest that unless some fundamental change occurs, there will be no significant progress by 2030.

The study concluded that a combination of inadequate central government resources and the slow disbursement of relatively small pots of money meant that progress on Leveling Up’s 12 core missions was “poor”.

To begin to reduce regional inequalities, NIESR calls on the next government to:

Significantly increase the level of public investment to at least 4-5%. GDP per year.

Accelerate the disbursement of Leveling Up funds according to clear economic and social criteria.

Reform the functioning of government, ensuring better cross-government coordination and greater decentralization of both decision-making powers and resources in policy areas such as skills, transport, infrastructure and housing.

Policy error

Professor Adrian Pabst, deputy director for public policy, said: “Climbing to the next level is a good idea, but it has been a political failure. Despite various shocks such as Covid-19 and soaring inflation, Leveling Up fell through due to lack of resources and slow disbursement of small pots of money.

“If the next government wants to reduce regional inequality, it will need to combine political leadership with a credible public investment program of 4-5 percent of GDP per year, which can unlock greater business investment.

“Achieving lasting regional revitalization is a generational task and requires a large-scale commitment.”