• Fraser Harper

Levelling-up – revisiting regional development (again!)

Using a combination of measures of employment rates, pay rates, health, formal education attainment levels and productivity provides a proven way to map some of the inequalities across the UK, and show which areas and regions might benefit from ‘levelling-up’. We can unpick ‘levelling-up’ as a series of propositions:

  1. Levelling-up = opportunities for individuals to progress and to choose how to make sustainable progression

  2. Opportunities = entry employment opportunities which then lead to career entry and the ability to move across career pathways + an ecosystem which brings together the conditions supporting new business formation (either individually driven or through private local/inward along with government aid) and existing business growth

  3. Employment + Entrepreneurial + Investment opportunities = these can all be costed on an ‘individual unit of opportunity’ to create and sustain based on similar opportunities in high growth, high productivity regions

  4. Employment + Entrepreneurial + Investment opportunities = the drive and potential for social and economic mobility

There are number of ingredients already to hand across England:

  1. Local skills improvement plans

  2. Local Enterprise Partnerships

  3. City Regions (devolved decision making)

  4. Catapults

  5. Universities

  6. Various specific funds e.g. Levelling-up Fund (£4.8bn) and the Towns Fund (£1bn)

  7. National Skills Fund

  8. Lifetime Skills Guarantee

  9. Freeports

  10. Fishing and Agriculture support

The list goes on.

We can bring together these various ingredients in a coherent framework for viewing a progressive way of supporting the growth of regions: providing the conditions for a region to grow and realise their potential. There are three major sets of levers which underpin regional development, and these captured in the diagram below.

The levers open to the UK Government to drive and foster regional development.

Source: WDC Insights[1]

We know from many years of regional policy in the UK[2]:

  1. The approach needs to be exceptionally long term and the policies must be multifaceted

  2. Each place is unique and requires specific local solutions

  3. Investment in schools and further education are very effective contributors

  4. Value in building on existing schemes E.g., the one provided by the EU Regional Development Fund

  5. Local leadership and local control over resources is critical to create local solutions

  6. Help support the creation of industry/technology clusters and centres of innovation which boosts existing companies’ absorption capacity and ability to co-operate and partner with other local agencies and businesses.

  7. Local leadership must have the ability to integrate skills with transport (and other infrastructure) and R&D.

  8. The creation of jobs and/or entrepreneurial opportunities for graduates in “lagging regions” will help retain and attract a highly skilled labour force and, in time, stimulate further growth and employment

  9. Harness the apprenticeship levy along the supply chain where major contributors to the levy can direct their funds to their suppliers and customers to improve skills and innovation

Skills, and a high functioning labour market are critical to addressing regional growth and development, and with appropriate data, multiple transition matrices can provide individuals to chart their way into employment and into sustainable careers.

So, regional development is a classic wicked problem[3] requiring local capacity and local authority to solve over several decades. The need to develop local solutions is critical as central government is not well placed other than to lay down strategy and the policy framework. The current UK Government would do well to learn from the collective learning of what works well to progress regional development.

Michael Cross

July 2021

[1] https://wdcinsights.wordpress.com

[2] Some of these points have been drawn from: IFS Green Budget 2020. Levelling up: where and how? And, Levelling up the UK’s regional economies. Increasing the UK’s rate of economic growth. Lord Sainsbury of Turville. Centre for Cities. Match 2021.

[3] Wicked problems exhibit inter-connectedness, complicated, uncertainty, ambiguity, conflict, and a series of constraints. See: Mason, R.O. and Mitroff, I.I. (1981) Challenging Strategic Planning Assumptions: Theory, Cases and Techniques. John Wiley and Sons, New York.

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