Levelling Up: There Are International Success Stories the UK Should Look To

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Welcome to REDI-Updates - providing expert data insights and clear policy guidance. 

In this edition, WMREDI staff look at the government's flagship policy - Levelling Up. We look at the challenge of implementing, understanding and measuring this Levelling Up. 

In this blog, Dr Abigail Taylor looks at how the UK’s approach to levelling up compares with international city-regions that have been successful in reducing inequalities.

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International research conducted by City-REDI with CIPFA offers lessons for levelling up in the UK and across the globe.

City-REDI with the Chartered Institute of Public Finance and Accountancy (CIPFA) has published research identifying lessons for levelling up from the experiences of four international city regions trying to address regional inequalities: Fukuoka (Japan), Leipzig (Germany), Cleveland (USA) and Nantes (France). The report is based on policy analysis and interviews conducted with policymakers, academics and third sector workers in the four city regions that have progressed in reducing regional inequalities.

Directed by City-REDI Professor Anne Green and CIPFA’S Chief Economist Jeffrey Matsu, the research showcases a range of analytical and linguistic skills across the City-REDI team. Abigail Taylor managed the project and used her knowledge of French to produce the Nantes case study. Liam O’Farrell explored experiences in Cleveland and Fukuoka. Hannes Read used his German language skills to undertake the Leipzig case study. George Bramley advised in relation to metrics and evaluation. Ben Brittain produced a literature review of historical evidence internationally for levelling up and supported the identification of relevant metrics. Gina Coe analysed data sources and metrics for justifying, monitoring and evaluating the delivery of strategies aimed at addressing regional inequalities.

We analysed experiences in Cleveland, Fukuoka, Leipzig and Nantes because they all previously suffered from high levels of inequalities. For example, Leipzig suffered mass unemployment and rapid population decline following the reunification of East and West Germany in 1990 but now has one of the fastest-growing city economies in Europe. In the late 1970s and 1980s Nantes “faced a difficult social climate” and suffered considerable job losses following the closure of its shipyards. It has transformed its economy, building on its traditional manufacturing strengths in shipbuilding to transition to high-end specialist cruise ship construction as well as aerospace. It came top among French cities for employment in the 2018 and 2019 Express magazine rankings. Selecting these city-regions also enabled the examination of policy implementation in different governance structures, including centralised and federal systems.

Key reasons for progress in addressing regional inequalities identified across the case studies:

  1. Shared political will and partnerships: each was vital in overcoming political differences and uniting public and private institutions around a common vision.
  2. Clear strategy and vision: each city set out what it should look and feel like as a place to live and work.
  3. Investing for the long term: a commitment to scale and longevity in funding is imperative.
  4. Local knowledge: an in-depth understanding of the strengths and weaknesses that drive local economies, and an ability to build on those strengths.
  5. Monitoring and evaluation: a system that allows for policies and programmes to be regularly sense-checked and updated in a timely way that benefits total performance.
  6. Adapting national frameworks to address local needs
  7. Diversification: the ability to design policies that enable growth strategies to take root and thrive relies on the strength of a local narrative.
  8. Key players: individuals and private organisations can serve as enablers of growth, leading by example.
  9. Adequate and responsive funding: identifying where and when finance is made available can be as important as the policies themselves.

Comparing these reasons for success with the plans set out in the Levelling Up White Paper, published in February 2022 suggests that there are some key points to welcome in the White Paper. However, the findings indicate that to achieve the missions set out in the White Paper, there needs to be a greater focus on sustained high levels of longer-term funding and greater clarity over what the expanded devolution powers will mean in practice.

Developing a clear strategy and vision was crucial in the international case study places that we analysed. For example, Fukuoka set out an ambition to become the start-up capital of Japan and an international destination for entrepreneurs and made great progress in relation to this. Therefore, the ambitious plans and aims set out in the White Paper are to be welcomed.

Facilitating collaboration between central and local government through partnerships was also vital in the case study places studied. This suggests that the announcement that Levelling Up regional directors will be put in place to act as a single point of contact for local leaders and the first port of call for new and innovative local policy proposals is a step in the right direction in strengthening relationships between local, regional, and central government stakeholders.

One of the biggest differences between plans set out in the White Paper and experiences in the places that we studied is the length and value of funding available. Our research indicates that levelling up is a long-term process requiring sustained high levels of funding. For example, Germany spent almost €2 trillion (£1.69 trillion) between 1990 and 2014 on policies aimed at addressing regional inequalities. Even with these high levels of funding it took 15 years for unemployment levels to fall in Leipzig and an additional 15 years for levels to move close to the national average. Funding commitments in the White Paper are limited, with most funding having been previously announced. Spending the money that is available wisely is imperative. Developing strong monitoring and evaluation systems must be a key priority.

The four case study places all had stronger local and regional powers than comparable areas in the UK. For example, Nantes Combined Metropolitan Authority collects household and economic taxes, and benefits from powers including transport, urban development, environment and employment. In addition to being one of the most regionally unequal countries in the developed world, the UK is one of the most centralised in terms of taxation and spending powers. The greater devolution powers announced in the White Paper – with new county deals and further Mayoral Combined Authority deals – moves the UK closer to systems operating across many of the case study places. A key question is which powers will be devolved in the UK and how and whether partners will have the capacity, capability and resources to work together to make the most of them.

View our Levelling Up research

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This blog was written by  Abigail Taylor, Research Fellow at City-REDI  / WMREDI, University of Birmingham.

The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI, WMREDI or the University of Birmingham.

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