New research shows region has failed to benefit from Levelling Up

There are very few signs of Levelling Up, with disparities in living standards and productivity between various English regions and UK devolved nations remaining unchanged or widening since the last General Election.

This is according to the latest analysis by the National Institute of Economic and Social Research ahead of the forthcoming General Election.

The Levelling Up process – as set out in the 2022 White Paper – had the important ambition to narrow the economic and social gap between the regions of the UK by 2030.

However, the research shows that the gap in living standards between the London and the South East and the North East has grown with an almost six per cent reverse, with the North West also suffering with an almost three per cent decline, and productivity differences between London and the South East and the West Midlands have also increased.

Margins only increased for the South West, South East, London, and the East Midlands – perhaps on the back of HS2 investment – with the rest of the UK failing to benefit from Levelling Up.

The combination of insufficient central government resources and the slow disbursement of relatively small pots of money has meant that progress on the 12 main Levelling Up missions has been feeble.

NIESR projections of living standards and productivity suggest that unless some fundamental change occurs, there will be no significant progress by 2030.

To change the course of action and start reducing regional inequalities, NIESR recommends the next government to:

• Substantially increase the level of public investment to at least 4-5% of GDP per year
• Speed up the disbursement of Levelling Up funds according to clear economic and social criteria
• Reform the operation of government, with better cross-government coordination and greater decentralisation of both decision making powers and resources in policy areas such as skills, transport, infrastructure and housing

Prof Adrian Pabst, Deputy Director for Public Policy, said: “Levelling Up is the right idea but it has been a policy failure.

“Notwithstanding the various shocks like Covid-19 and the spike in inflation, Levelling Up has not happened because of a lack of resources and the slow disbursement of small pots of money.

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

He added: “Bringing about sustained regional regeneration is a generational task, and we require a commitment that is at scale.”