Do we finally know what levelling up means?

It’s the question we all had front and centre of minds as we read through the Government’s Levelling Up White Paper. Nearly three years on since the words were first mentioned, we finally have a better idea of what levelling up means, what the Government is aiming to achieve, and by when.

In this blog we run through what manufacturers need to know about the White Paper, and how it may impact the manufacturing sector.

Levelling up means tackle regional disparity

In short, the Government has defined levelling up as the steps needed to make us more prosperous, more united, and less unequal.

These ambitions are broken down into 12 missions to achieve the overarching aim of tackling regional disparity. But these missions can be better described as ‘targets’ or ‘metrics of success’ which set out in a quantifiable way, what the Government is wanting to achieve. Furthermore, the Government has also set a timeframe by which each of these missions must be achieved, 2030.

This gives us a clear idea of what the Government wants to achieve and by when. Holding Government to account in meeting these missions will be a new Levelling Up Advisory Council, who will track and measure the progress being made.

What about all those ‘missions’?

Mission – Digital connectivity: In this mission, by 2030, the Government has pledged the UK will have nationwide gigabit-capable broadband and 4G coverage, with 5G coverage for most of the population. All of this is based on the previous announcements, so not new. The only new thing about this commitment is in 2022, the UK Government will publish the Wireless Infrastructure Strategy. This is supposed to review how far the private sector will go to deliver wireless infrastructure – including 5G – across the country and determine whether there are any market failures in places that need to be addressed, and how the UK Government could tackle these.

Mission – Skills: In this mission, Government has pledge that by 2030, the number of people successfully completing high-quality skills training will have significantly increased in every area of the UK. The policy reforms to achieve this mission are not new, from the introduction of Local Skills Improvement Plans to Skills Bootcamps, to the rollout of more Institutes of Technology. What is new, is the creation of a Unit for Future Skills – a cross-department body to produce information on local skills demand, future skills needs of business, and determine the skills availability in an area and the pathways between training and good jobs. This has been tried multiple times by successive Governments, so we await tentatively to see what is different about this.

Mission – Housing: In this mission, Government has pledge to improve housing quality, including through the planning system. Specifically, introducing a £1.5bn Levelling Up Home Building Fund which aims to provide loans to SMEs and support the UK Government's wider regeneration agenda in areas that are a priority for levelling up. In short this can support the scaling up of Modular Housing, to build greener, faster, and better homes for all.

Mission - Productivity, Pay, Jobs: In this mission, the Government says it will raise pay, employment, and productivity in every area in the UK. This could be easy or challenging depending on the bar we set for success. Right now, there is no bar. The UK has fallen behind on productivity for over a decade when compared to its international competitors whilst pay growth is not simple to measure when you consider real earnings (purchasing power after inflation). As a mission this makes sense, but how much improvement in pay, jobs and living standards is the right amount of growth to be considered true levelling up?

Also in this mission, the Government has pledged that by 2030, domestic public investment in R&D outside the Greater Southeast will increase by at least 40% and at least one third over the Spending Review period. With that additional funding, they are seeking to leverage at least twice as much private sector investment over the long term to stimulate innovation and productivity growth. This is a new commitment that BEIS will oversee. It’s good news for places that are not London, Oxford or Cambridge. More funding for research institutions and innovation centres in the regions with lower R&D expenditure will help businesses to innovate, de-risk their new ideas and grow. But the new Innovation Accelerators announced are in regions which are already ahead of their neighbouring regions in this space.

Mission – Local leadership: Arguably the most important of all missions, Local Leadership. This mission pledges by 2030, every part of England that wants one will have a devolution deal with powers at or approaching the highest level of devolution and a simplified, long-term funding settlement. This will mean LEPs and Combined Authorities are merged together, new Levelling Up Directors will be created to be the ‘go-to’ in your region, greater (deeper) devolution of different policy areas including skills for those that wish, and 9 new ‘devo deals’. Different areas will be able to introduce a Mayor with additional powers (should they wish it) and aim for a London style development. But the success of devolution will parallel the access of funding by local leaders, which the Levelling Up Fund, Towns Fund, and the UK Shared Prosperity Fund should address. The main difference in this new plan is that local leaders will have more influence on how funds will be used. A hopeful recipe for success.

But is any of this really new?

Unsurprisingly many of the announcements have been recycled from the 2021 Spending Review and the Government’s Plan for Growth. Equally, the funding is also not new - what was announced at the Spending Review back in 2021 is what is available to ‘level up’. This mean the largest pots of funding purely dedicated to ‘levelling up’ available remain the £4.8bn Levelling Up Fund, the £220m UK Community Renewal Fund and the £3.6bn Towns Fund announced last year.

What next?

As Secretary of State Department for Levelling Up, Housing & Communities Michael Gove MP says in the White Paper, “…the publication of this White Paper marks an important step towards that goal [levelling up]”.

The Government have promised to engage further through Ministerial visits across the country, local panels, annual reporting of progress and even a public forum to share ideas. It is very much the first step in a very long journey. But buried on page. 168 we saw a nod towards working with the manufacturing sector which was good news, “…the UK Government will engage with manufacturers to ensure that we are maximising existing spending and non-spending policy levers and strategic investments to attract, anchor and grow manufacturing and supply chains to support levelling up”. We will be taking them up that offer.

Final thought

The true test of the Levelling Up White Paper will be the measurable change it brings to manufacturers and the 2.7 million people working in our sector across the country. With only 2.5 years of this parliament remaining, time is ticking to demonstrate change, and fast.

Remember you can have your say in our Levelling Up survey which is live here.