The former head of the civil service, Lord Kerslake, has called for a cross-government team to be created to drive efforts to tackle regional disparities and complete the prime minister's commitment to "level up" across the UK.
The UK2070 commission proposed a 10-point programme to rebalance the UK.
Among the proposals is a call to triple the size of the UK Shared Prosperity Fund, the proposed replacement for EU structural funds, to £15bn a year and commit to providing 20 years of interventions to improve regional economies. It also urges greater investment in connectivity to transform infrastructure connections between cities, within cities and from cities to towns, as well as new "networks of excellence" in regional research and development to match the "golden triangle" of London, Oxford and Cambridge.
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The commission, which is comprised of academics, local government representatives and business figures, was chaired by Kerslake, who led the civil service from 2012 to 2014. It was established to examine what it called “deep-rooted spatial inequalities” within the UK that affect health, housing and economic productivity, and to recommend ways to address them.
The commission's final report concluded that the UK is one of the most spatially unequal economies in the developed world. This creates both enormous housing, transport and environmental pressures on London and the wider south east, as well as creating social division in many parts of the UK where people feel they have been left behind by the growth in wealth and opportunity elsewhere.
The report follows a pledge by Boris Johnson to "level up the UK" through government investment – a commitment Kerslake welcomed.
However, the scale of the challenge needs power and funding to shift from central government as it is “clear that trying to determine the future of regional Britain from Whitehall alone has not worked”, Kerslake said. “It is therefore vital that the government recognises the reality of the challenge they face to truly level up the UK. We start from having huge inequalities now that are only growing wider.”
The commission called for wide-ranging reforms to how government works to implement the "levelling-up" agenda, including the creation of a “powerful cross-ministerially-led government committee… with a dedicated team to oversee the delivery and embedding the purposes of levelling-up and spatial analysis”.
This should be accompanied by flexible funding, the commission said. It said government should examine the possibility of devolving spending in regional areas as a block grant, similar to how the Scottish Office was funded before devolution, to allow for increased local decision making.
In England, this should include co-locating government policy offices outside London, with each led by a civil servant at director-general grade.
Kerslake said the government needed to “go big or go home” when thinking about how to arrest further economic decline and social division.
Addressing inequalities across the UK will come with a cost, but so will not doing so, he said.
“This is not a debate about north vs south or towns vs cities. If we continue on our current trajectory then the threats to regional livelihoods and the pressures on London and the south east will become so severe that everybody will lose out. We also need to recognise that the price of failing to reverse this decline will far outweigh the cost of investing now in creating greater opportunities.”
The scale of the challenge required a “generational shift if we are to avoid serious decline”, according to Kerslake, who was also permanent secretary of the then-Department for Communities and Local Government from 2010 to 2015.
“Many people in Britain feel left behind by growth elsewhere and that has contributed to an acrimonious debate about Europe. We now face a decade of potential disruption – leaving the European Union, confronting the impact of climate change and adjusting to the fourth industrial revolution.
“Our research shows clearly that these inequalities did not grow up overnight. They reflect an over-centralised system that fails to comprehend the reality of regional need and consistently comes up with policies that are either under-resourced, too fragmented, or too short-lived to make a difference. Some policy guidelines have actively stacked the odds against the regions. Time is not on our side and we cannot afford to keep on repeating those mistakes.”
Kerslake said the government’s decision to go ahead with the planned High Speed 2 rail link was welcome “because it represents coordinated investment at a scale that has the potential to benefit the whole economy”. But there was a need for “sustained interventions of a similar magnitude across the economy”, he said.
“Unless the government’s levelling up programme is comprehensive, coordinated and long term it is destined to go the way of the failed initiatives of previous administrations. This will result in even greater disillusionment. We can create a fairer and stronger future, but only if we act at scale.”