Readers of Progressive Review, and particularly those drawn to an issue that sets out the scale of the challenges that face the new Labour government, will be very familiar with the impact that austerity has had on the public realm since 2010. These impacts have been particularly acute at the local level in England, and especially in deprived communities.1 A spate of local authority ‘bankruptcies’ in major cities such as Birmingham and Nottingham, which involve chief financial officers issuing ‘section 114 notices’ to inform ministers that their expenditure will exceed their revenue over the course of a financial year (something that is illegal under the Local Government Finance Act 1988), have only served to illustrate how widespread the problem has become.2
Ultimately, questions about local government finance touch on the issue of local government itself: what it is – or should be – for, and how it should relate to the centre of government. To what extent should councils be free to levy taxes, spend money and shape places as they wish? Should they exist primarily as delivery arms for central policies, or do they also have a key role to play in shaping local communities? Ultimately, whom do they exist to represent?
Local authorities in the UK are very unlike their counterparts elsewhere, in that they tend to cover large geographical areas and very large populations that do not always correspond to local identities. This is the result of a longstanding belief in the administrative superiority of larger governmental units, rather than any wish to ensure that local government represents identifiable local places.17
Indeed, the previous government's direction of travel continued in this direction, by emphasising the role of large, subregional metro mayors and combined authorities. Starmer and his team appear to have bought into this idea, and have been less forthcoming in setting out their vision for what we might call ‘traditional’ local government. Nonetheless, working on the basis that Starmer's team recognise the key role that councils need to play in addressing challenges such as lacklustre economic growth, climate change and endemic poverty, we could see a revitalisation of subnational government in England in the coming years. The challenge of rebuilding capacity within local authorities – as well as in other public bodies – will be difficult, but is necessary to ensure that the state can deliver on all parts of the government's agenda.
We are coming to the end of a parliament where levelling up has been an ongoing theme, so it is a good time to begin to consider what levelling up is (or was), how it emerged, what if anything it has achieved and what lessons the past few years might offer a new, potentially progressive, government. In this article we argue that government has begun to deliver on some eye-catching initiatives, but their impact on economic levelling up is unlikely to be significant. More positively, we argue that levelling up – including a broadening and deepening of devolved economic governance – has moved regional inequality up the political agenda and into the public consciousness. This represents an opportunity for a progressive government if it first resolves some of the political tensions and contradictions around levelling up. These include a conflation and confusion over whether interventions are designed to drive economic growth and productivity or build social infrastructure and pride in place.
Progressive Review readers are likely familiar with at least the headline evidence on UK regional economic inequality, which remains exceptionally high for an advanced economy.1 Pointedly, for an article such as this one examining the impact of recent policy, regional disparities have worsened over the past five years.2 Recent years saw populist politicians, thinktanks and commentators claim the cause of tackling regional economic inequality as theirs; with particular emphasis in Conservative politics on a ‘Brexit dividend’. Advocates of progressive politics were left on the defensive as ‘out of touch’ and representative of an often vaguely defined ‘metropolitan elite’. The government elected in 2019 presented itself as best able to help people in places that had been ‘left behind’ in a globalised economy – the places that “don't matter”.3
Levelling up builds on the Cities and Local Growth agenda (CLoG; incorporating the northern powerhouse) that gave us the current patchwork of regional development governance, including combined authorities, ‘metro-mayors’ and local enterprise partnerships (the last of which are being wound down this year). Genuine revolutions in regional policy have been comparatively rare, but the 2010 Coalition government's scrapping of much of the regional tier of governance – particularly the regional development agencies and regional government offices – was a relatively radical juncture. (The-then business secretary, Vince Cable, described the sweeping away of the regional structures as “a bit Maoist”. Is it possible to be a bit Maoist?)4
Analyses of levelling up often takes the 2022 levelling-up white paper5 as a point of departure. However, levelling up in practice is sometimes only loosely related to the themes in the white paper, which is broad in its analysis and aspirational in its goals. Much of the document discusses academic analysis of economic geography with an implicit nod to the agglomeration
In May, the North East Mayoral Combined Authority will elect its first metro mayor, creating one of the largest, and potentially most important, devolved authorities in England. This is taking place 20 years on from the failure of the last Labour government to get local people in the North East to agree to its plans for a new model of regional government. This time around, a modest system of devolved administration – in the North East and some other parts of England – will be in place should Labour win the upcoming general election (as current polling suggests it will). How the party understands and responds to the challenges that its predecessors failed to surmount will say much about its competence and strategic priorities in relation to the grand challenge of English devolution.
Reflecting on the long history of regional policymaking in relation to the North East, helps us to understand the factors that have made the establishment of an effective and legitimate model of government in this area so difficult. A sense of this history also alerts us to the challenges associated with extending devolution across England more generally.
Three key factors have long shaped the North East's distinctive political culture: an entrenched pattern of economic underperformance relative to England's more affluent South East; a widely felt sense of disillusionment with the prevailing model and outcomes of the UK's parliamentary government; and a historically ingrained sense of pan-regional identity, which has long sat in tension with strong local attachments to the key cities within its jurisdiction, and rivalries between them.
The rooted and distinctive sense of identity can ultimately be traced back to the medieval Kingdom of Northumbria – itself an unusually semi-autonomous entity within a relatively centralised English polity.1 A strong sense of affiliation to this geographical area was passed into the industrial era and maintained too by a distinctive local dialect and the relative geographical isolation of the area.2
However, over the past century, the North East's economic prospects have steadily deteriorated, so that the region is now, on many different metrics, rated as one of the poorest parts of the UK. These failings are rooted in the notable underperformance of its main cities, Newcastle and Sunderland, on metrics such as productivity, businesses per capita and wages, all of which are below the national average.3 Economic geographers often refer to the damaging impact of the poor economic performance of the UK's ‘second tier’ cities, and those in the North East sit at the bottom end of that category – generating remarkably few spillover benefits for those towns that sit on their edges.4 This economic divergence between the North East and wealthier parts of the UK has become a live political issue in recent years. Support for Brexit was marked, as 58% of the population, the third highest regional total, voted to leave the