Published:

Jonathan Webb is a senior research fellow at IPPR North.

Before January draws to a close, the Government will have faced the biggest test of its flagship levelling up agenda to date. The highly-anticipated levelling up white paper represents a watershed moment for the Government – a chance for it to deliver a plan worthy of the rhetoric, and meet the promises made to the country in 2019 to raise prosperity and close regional divides. If the white paper is to be a success, it must provide a framework that changes the way this country is governed.

The UK is more centralised than any comparable country. Economic and political power is centred around Westminster and this is a root cause of our deep regional divides. Not only is our centralisation a long-standing problem, it’s also one that is getting worse. New research released this week by IPPR North shows that since 2010 central government employment has increased, while local government has continued to shrink.

More decisions are being made from departments in Whitehall and not by local government. At the same time, increasing amounts of tax revenue are flowing to central government, not local government. In 2017/18, 95p in every £1 paid in tax was taken by Whitehall compared to 65p in every £1 in Germany. This has worsened in the intervening years, rising to 96p in every £1 paid in tax being taken by Whitehall in 2019/20.

This centralisation of resources in Whitehall is problematic because decision-makers in London are too far removed from many of the communities that need to be levelled up. Where power lies matters. The further people are from Westminster, the less likely they are to trust government. While some steps have been taken to disperse civil servants across the country, this doesn’t provide the ambitious rethink of central-local relations needed to shift the dial, nor does it compensate for the fact that local government’s capacity has been diminished.

Creating a new economic campus in Darlington won’t make a difference if it simply results in more civil servants moving North. What the region and other parts of the country need is investment, steered by local leaders who know their communities best. Levelling up cannot be delivered from central government alone.

Fortunately, the building blocks needed to level up are already in place, that is, strong local leadership and ambition. Regional and local leaders, like metro mayor Ben Houchen, are making a difference. Houchen has attracted significant economic investment to Teesside, creating a new economy that prioritises green jobs and industry. All areas should be given the same economic opportunities as Teesside.

And at an even more local level, community groups are proving that they have the determination and understanding needed to tackle big issues and level up from the bottom up. Organisations like the Wigan and Leigh Community Charity are giving people the chance to turn their interest and skills into a social enterprise or community business. With the right support, communities can do incredible and entrepreneurial things for themselves.

Shifting power away from central government and to communities requires a strong local state. The white paper must deliver this by outlining a new ambitious way of governing, that puts communities first. Instead of hoarding power and resources in Whitehall, the government must give these away to local leaders. As a start, it should commit to ensuring that 50 per cent of all capital investment and spending on economic affairs sits at the subnational level. This would shift significant resources to combined and local authorities in England.

At the same time, empowering local government and communities would allow them to work together to create new economic opportunities for people and tackle problems like crime and anti-social behaviour. The more say and involvement that people have over their lives and the bigger

input they have in shaping the places they live, the more likely they are to foster local pride. This pride in place is crucial for strengthening community ties and a sense of belonging.

To make levelling up a success, it also has to be underscored by collaboration, not competition. Competitive pots of funding, like the levelling up fund, creates winners and losers. It isn’t right that Barnsley is the only place in South Yorkshire not to win a levelling-up bid. Their need for investment is just as great as in Doncaster or Sheffield.

A more decentralised country, where political and economic power sits at the regional and local level and not in Whitehall departments, would speak to the scale of change needed to match the levelling up rhetoric. So, when Gove presents his levelling up white paper to the country, a radical vision of, and clear plan for, devolution must be at its heart.

Shifting power to local places and communities could give people the chance to better shape their own lives, restore local pride, and finally address the deep divides that cut across our country. Most importantly, it would fulfil the promises made in 2019 – that a fairer and prosperous economy that works for everyone can be realised.