New research from the National Institute of Economic and Social Research (NIESR) reveals that the Levelling Up initiative has failed to deliver significant improvements in reducing regional disparities in living standards and productivity.
According to NIESR’s analysis, the economic and social gaps between various English regions and UK devolved nations have either remained static or widened since the last general election.
The Levelling Up strategy, detailed in the 2022 White Paper, aimed to narrow these gaps by 2030. However, the latest findings show that the gap in living standards between London and the South East and the North East has grown. Additionally, productivity differences between London and the South East and the West Midlands have increased.
NIESR attributes the lack of progress to insufficient central government resources and the slow disbursement of relatively small funds. The institute’s projections suggest that without substantial changes, there will be no significant progress by 2030.
Professor Adrian Pabst, deputy director for public policy at NIESR, 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. Bringing about sustained regional regeneration is a generational task, and we require a commitment that is at scale.”
NIESR recommends the next government substantially increase public investment to at least 4-5% of GDP annually. It also calls for speeding up the distribution of Levelling Up funds based on clear economic and social criteria and reforming government operations to improve cross-government coordination and decentralisation in key policy areas such as skills, transport, infrastructure, and housing.
