Why the Government's billion pound 'levelling up' funds may not improve the North's economic fortunes

Steve Fothergill and Tony Gore of Sheffield Hallam University say in their Plan For The North report that at the moment "many of the key levers for the economic revival of the North can only be pulled in Westminster and Whitehall".

Their report, backed by political leaders from Yorkshire, the North West and North East such as Greater Manchester mayor Andy Burnham and West Yorkshire mayor Tracy Brabin, calls for measures including a new round of devolution of power and responsibility to the North.

And a letter sent by the leaders to Prime Minister Boris Johnson said: "This report – written by two of the most respected academics in the field of regional economic development – is the first step in a debate about what levelling up should really look like, and how it can be used to unlock the North’s potential."

The report, seen by The Yorkshire Post, says the North is large and diverse but "taken as a whole it lags behind in prosperity", with its economic disadvantage likely to be made worse by the pandemic.

It says: "The government’s commitment to levelling up is welcome but its present initiatives offer funding that mostly isn’t new, is often short-term, and looks likely to be scattered widely across the country."

As an example, it criticises the £3.6bn Towns Fund which has seen millions handed to towns such as Scarborough, Rotherham, Brighouse and Morley, saying "there is little reason to think that the Towns Fund will make more than a marginal difference to the North’s economic fortunes".

A related scheme, the Future High Streets Fund, saw 72 winners allocated £830m in December. But the report says: "Just 20 are in the North of England – just over a quarter of the winners, which is the same as the North’s share of England’s population. The Future High Streets Fund does not contribute to ‘levelling up’."

The new Levelling Up Fund, a £4.8bn scheme to support town centre and high street regeneration, local transport projects, and cultural and heritage assets, was unveiled this year.

But the report says: "The fund is open to all local areas across the UK and is being allocated by competitive bidding. It is difficult to see how a fund that is open to all parts of the country can be squared with levelling up."

It adds that the new scheme "does not appear to be ‘new money’" as it looks like the successor to the Local Growth Fund, which operated in England between 2014 and 2020.

And the academics point out that the LGF spent an average of around £1.5bn a year over its lifetime, the Levelling Up Fund will spend £1bn a year. It says: "Or to put this another way, the Levelling Up Fund represents a reduction in spending compared to its predecessor."

Outlining the measures they would like to see to strengthen the North's economy, the authors call for a new emphasis on growing the manufacturing sector, "which remains a large component of the North’s economy."

They add: There needs to be a business environment that encourages investment, a competitive exchange rate, a budget strategy that sustains demand, and protection from unfair foreign competition.

And they recommend investment in the green economy to lower carbon emissions and bring new jobs to the North, adding: "Energy intensive industries, which are important in parts of the North, should be helped to reduce their carbon emissions, not discarded."