In Britain’s fractious politics, one small move by the new Prime Minister was greeted with something close to consensus beyond Westminster: the re-appointment of Michael Gove as Secretary of State for Levelling Up.
Since Gove’s departure from the post in the dying days of Boris Johnson’s premiership, “levelling up” had been hanging in the balance. Its political masters were no longer in office. The Levelling-up and Regeneration Bill was rumbling slowly through parliament. The small amounts of funding allocated to local projects were fast losing value in real terms because of rapid inflation. It was increasingly hard to remain optimistic about the rhetoric, let alone the reality, of the agenda.
The new regional development policy game in town was suddenly investment zones, announced during Liz Truss’s short premiership. The idea, the government has explained, was that these would be sites “where a variety of tax, regulatory innovations and flexibilities, and planning simplification” would apply. Local areas had been forced to pivot towards these, despite being set up as flagship experiments in the “Trussonomics” of low tax and deregulation, in the hope of gaining some much-needed government backing for local plans.
But Gove’s appointment signals that levelling up is back on – whether investment zones are now off remains to be seen. Rishi Sunak, who gave a nod to the concept in his first speech as Prime Minister, seems aware that his claim to a mandate rests on demonstrating his commitment to the Conservatives’ 2019 manifesto. This made promises about overcoming regional inequalities built up over decades that voters in Red Wall seats took seriously. Beyond electoral appearances, however, how deep will the Sunak administration’s commitment be?
Having a “big beast” in post at the Department for Levelling Up, Housing and Communities is a good start. The department and its predecessors have often been overshadowed by the larger public spending fiefdoms at Whitehall – health, education, work and pensions. The 12 levelling up “missions” cut across areas of responsibility, from narrowing life expectancy gaps, to increasing educational attainment, skills and good employment, so having a secretary of state with the gravitas and determination to poke his nose into the business of other departments is a precondition to getting the Whitehall machine moving in the right direction.
Overcoming deeply ingrained social and economic inequalities was always going to require more than knocking a few heads together. Even in its heyday of a brief few months earlier this year after the publication of the levelling up white paper, it had largely become focused on “deliverables” – capital investment in infrastructure projects. This is undoubtedly welcome in areas that have felt overlooked for years, but as we approach another round of fiscal belt tightening the limitations of an approach which invests in places on the one hand and disinvests from people on the other will become increasingly apparent.
Here is where Sunak himself has a less than stellar record. Under his watch, the Treasury ensured the white paper contained no new funding commitments. Over the summer he bragged to the Tunbridge Wells faithful that he had shifted local government finances in their direction and away from more deprived areas. As recent research from the Institute for Fiscal Studies has shown, our system of funding local public services does not follow geographic needs, across health, social care, local government, schools and police. There is increasing awareness that for levelling up to be achieved, one-off projects will not suffice; we need to reorient our entire system of funding and provision to overcome structural geographic inequalities.
All eyes will now move to the medium-term fiscal plan, set for November. Will a new round of austerity mean the pursuit of national “stability” wins out over sustained regional development? If local areas are to take the brunt of consequences for national economic mismanagement, the tensions at the heart of the agenda will come to the fore. Holding together the electoral coalition of the Red Wall and Tory heartlands, while balancing the fiscal realities of deficit reduction and chronically underfunded public services, may prove too much.
For Gove himself, there are some lessons to take from his interregnum. Given the fragility of the levelling up agenda when the personnel at the helm left office, an immediate priority for his return should be to set about planting deeper roots. This could be done by fusing levelling up more explicitly with devolution. Handing over the powers and funding to local areas themselves would protect it against change at Westminster. It would also give the policy a chance to mature as an enduring regional development framework.
And on a purely political level, with the architect of levelling up back at the helm, the Labour Party will have to do more than oppose the government and actively demonstrate how their own policy commitment is more meaningful. As we look towards an election in two years, an arms race between the main parties on levelling up can only be good for the prospects of overcoming regional inequalities.