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Landmark ‘State of the North’ report reveals a gulf between levelling up promises and policy reality

The leading think-tank for the North of England has today published research showing that despite the rhetoric, the UK is more regionally divided than ever – and that central government policy has so far undermined the levelling up agenda.

Over two years on from the government’s promise to ‘level up’ the country, IPPR North - which turns 18 this week - unveils stark results in its annual health-check of the economy of the north of England, including that:

Funding for ‘levelling up’ pales in comparison to local government austerity: The 2021 allocations of the Levelling Up Fund, which is controlled by central government, is an investment of just £32 per person in the North. This compares to a £413 per person drop in the North, and a £388 drop across England, in annual council service spending over the last decade.
The country is becoming more centralised: Public spending is concentrated in central government. Four years ago, 95 pence in every £1 paid in tax was taken by Whitehall (compared to just 65p in Germany). Despite the levelling up agenda, this has now increased to 96p.
Regional divides are growing across a range of measures: For example, for every job created in the North, just under three were created in London and the 'Greater South East’
This has real, significant consequences for people: In work poverty has risen in the North from 3.4 million people in 2009/10, to 3.5 million in 2019/20.

IPPR North’s research also includes a new ‘levelling up promises tracker’*, which examines government’s progress on promises made relating to its levelling up agenda and finds that many have been broken, scaled back or represent a reduction to other pots of funding they replace. This has had consequences for vital areas including jobs, net zero and education and skills, and could undermine political trust and participation.

But despite this, the North is demonstrating its potential – local people, communities and leaders are doing what is needed to level up. For example, researchers found that the North generates 51 per cent of England’s renewable energy. This is an example ‘northern excellence’. However, they say that the region’s full potential can only be realised when central government is willing to devolve power to, and collaborate with, empowered regional and local government, and communities.

Interim Director of IPPR North, Arianna Giovannini said:

“Two years on from the promise to level up the country, government's rhetoric has reached fever pitch, but in reality they have once again over-promised and under delivered on rebalancing our economy.

“To succeed in levelling up, enabling people everywhere to live a good life it will be necessary to build an economy hardwired for widespread prosperity, that powers the net zero transition, and provides everyone with access to high quality lifelong education.

“Broadening and deepening devolution, and building collaborative relationships between and across all levels of government are essential components of the levelling up jigsaw. But reorganising local government by the back door, false dawns, and further centralising power and funding would be a huge mistake and level down the country”.

ENDS

Contact: Rosie Lockwood, head of media and advocacy for IPPR North, on 07585772633 or r.lockwood@ippr.org.

Notes:

Report authors Jonathan Webb, Marcus Johns, Erica Roscoe and Amreen Qureshi are available for interview. Arianna Giovannini is also available for interview on Mondays and Tuesdays only.

IPPR North is the leading think-tank for the north of England, developing bold ideas for a stronger economy and prosperous places and people. For more information, visit ippr.org/north.

Embargoed copies of the report are available on request. Last year’s report is available online here.

*Levelling up promises tracker:

Promise or pledge	Details	Status
Levelling Up Fund	£4.8 billion, worth an average of £1.2 billion a year over the next four years. This was seen as a replacement for the Local Growth Fund.	Less than the fund it replaces - This is meant to replace the local growth fund, but represents a reduction from £2bn a year to £1.2bn a year.
Community Ownership Fund	£150 million to protect vital community assets by providing funding for communities to take ownership over them.	In progress, but centrally controlled and competitive – there are eight bidding rounds in the next four years, and access to funding and advice may be available to help communities to develop viable proposals.
The Towns Fund	£3.6 billion to drive the economic regeneration of deprived towns.	In progress, but centrally controlled and competitive - the decision-making process has come under criticism for being politically motivated and opaque.
UK Community Renewal Fund	£220 million as a precursor to the Shared Prosperity Fund, to help the transition to the UK Shared Prosperity Fund ahead of its launch in 2022.	Delayed – there was a 3-month delay on announcing successful projects, the deadline for spending funds is now in June 2022.
Shared Prosperity Fund	£2.6 billion over the next 3 years to help people access new opportunities. Promises were made to match in full the EU structural fund programme, which the UK is no longer a recipient of. The UKSPF will rise to £1.5 billion a year by 2024 –25.	Watered down and less than the EU structural funds it replaces – Shared Prosperity Fund only amounts to £1.5bn a year in 2024-25 - before then it is significantly lower in 2022-23 (£0.4bn) and 2023-24 (£0.7bn). It is set to deliver a 40 per cent shortfall over 2022-2025 compared to EU structural funding.
National Skills Fund	£2.5 billion dedicated to provide matching funding for individuals and SMEs for high-quality education and training.	In progress – fund is being rolled out over the next three years.
Net Zero Strategy	Ten Point Plan and Net Zero Strategy mobilise £26bn of government capital investment in net zero transition. This investment could create hundreds of thousands of green jobs in the North.	In progress but contradictory actions – strategy document outlined. Sector plans and cluster decarbonisation approach. Unclear how transport decarbonisation strategy will be implemented in light of broken promises around transport infrastructure.
Freeports Programme	Government aims for ‘national hubs for global trade, creating hotbeds for innovation that will intensify the economic impact of our ports and generate increased economic activity’.	In progress – the first freeport to become operational was Teesside Freeport in 2021.
Civil Service relocations outside of London	The government has pledged to shift 22,000 civil service jobs out of London by the end of the decade – with a target for 25% of roles to be outside London by 2025.	In progress – one ministerial HQ has opened in Wolverhampton while Treasury North is planning to co-locate around a quarter of Treasury staff with other departments’ staff on a new multi-department ‘economic campus’.
The UK Infrastructure Bank	Finance support to local authorities and private sector infrastructure projects to help meet UK government objectives on climate change and regional economic growth. This is expected to unlock £40 billion of infrastructure investment.	In progress – the bank is open and headquartered in Leeds. It has started lending, for instance the Tees Valley Combined Authority received a £107 million loan.
Investment in R&D	Government is aiming to invest £22 billion by 2026/27 more of which is aimed to be invested outside the Greater South East.	Delayed – pushed back target date from 2024/25 to 2026/27. Government says the plan for rebalancing this investment regionally will be set out in the delayed Levelling Up White Paper.
Nationwide gigabit broadband coverage by 2025	£5 billion to invest in rollout for nationwide access.	Watered down – the pledge has gone from “nationwide gigabit broadband” to “a minimum of 85 per cent by 2025”.
Levelling up premium for teachers	Teacher salaries to start at £30,000.	Unclear – according to a report by the Public Accounts Committee, there is no timetable for meeting this commitment.
Establishment of 20 Institutes of Technology	£120 million capital spending provided to successful FE providers who have bid to become Institutes of Technology, focusing on closing skills gaps in STEM areas.	In progress – 12 providers were established and a further 9 were announced in December 2021.
Delivering on longstanding pledges like HS2 in full and Northern Powerhouse Rail	“And today I am going to deliver on my commitment to that vision with a pledge to fund the Leeds to Manchester route” (Prime Minister’s July 2019 speech at the Manchester Science and Industry Museum)	Broken – the Eastern Leg of HS2 has been scrapped under the Integrated Rail plan and NPR has been cancelled in favour of smaller new lines and an extension of the pre-existing Transpennine Route upgrade.