The long history of levelling upPosted: February 3, 2022
Originally written as a column for Inside Housing.
Whether you put it down to coincidence, cock-up or an acute sense of history the decision to launch the Levelling Up white paper on Groundhog Day looks singularly appropriate.
My day began with the Today programme’s report from Wakefield rather than Sonny & Cher on the radio but the effect was similar. It took me straight back to the late 1980s when I was reporting on regeneration plans for the same city.
That was after Margaret Thatcher’s famous ‘walk in the wilderness’ and promise on night she won the 1987 election that: ‘Tomorrow morning we must do something about those inner cities, because we want them too next time.’
Her government had spent the previous eight years destroying the traditional industries that provided the well-paid jobs in those same areas but now she would put things right. Regeneration programmes like City Challenge, Development Corporations and Estate Action duly followed.
Flash forward 35 years and, after winning many of the seats that eluded Mrs Thatcher, another Tory government is promising to ‘level up’ exactly the same areas. This after spending nine years slashing their local authority budgets.
And these are only two moments in a long history of attempts to rebalance the regional economies of the UK that date back to the 1920s.
In the 1960s major factories and important bits of government departments were relocated to industrial areas, while in the 1970s the Urban Programme helped areas facing acute social problems with education, health and housing and welfare.
After 1997, New Labour promised an ‘urban renaissance’ and regeneration schemes that would ‘narrow the gap between deprived areas and the rest of the country by dramatically improving outcomes … in the most deprived areas’.
And the European Union developed its own version of Levelling Up with a series of social and regeneration funds and Objective One status for regions falling significantly behind the rest of Europe. Cornwall and West Wales were the last UK regions poor enough to qualify for the final rounds of it.
All of these programmes had their good points but none really managed to reverse the growing inequality between the South East and the rest of the country that has been turbocharged since the Global Financial Crisis.
So forgive me for feeling a sense of weary cynicism with the déjà vu of this white paper.
It’s great news that plans by some government departments for outposts in the Midlands and North and in Scotland that will create hundreds of well-paid jobs there but this is happening just as other government departments and agencies close down regional offices set up in earlier rounds of regeneration with the loss of thousands.
It’s good that the UK Shared Prosperity Fund will allow local authorities to bid for money to boost their areas but the government has not kept its promise to replace ‘every penny’ of funding that came from Europe. The Welsh Government reckons that it will lose out by £1 billion as a result.
And it’s welcome that the 10th of Michael Gove’s 12 Levelling Up Missions promises that: ‘By 2030, renters will have a secure path to ownership with the number of first-time buyers increasing in all areas; and the government’s ambition is for the number of non-decent rented homes to have fallen by 50 per cent, with the biggest improvements in the lowest performing areas.’
These are significant commitments and they will be followed by another white paper in the Spring consulting on plans for registration of landlords (rejected as ‘red tape’ in 2010), a legally binding Decent Homes Standard for the private rented sector and ending Section 21 evictions.
However, thinking about it for a minute, if landlords sell their worst stock to first-time buyers that could be mission accomplished on both counts but it’s not at all clear how much would be levelled up in the process.
And it’s disappointing but predictable to see no reference to homelessness, social housing or affordability in the headline mission.
The white paper argues that Levelling Up will achieve more than all the previous versions of regeneration thanks to its longevity, coordination, monitoring and evaluation, transparency and accountability but a quick read of the National Audit Office’s report this week on supporting local economic growth raises doubts on all of these points.
Local empowerment is seen as the other key difference, with devolution and metro mayors delivering more than previous top-down initiatives. That may well be true but newly empowered local authorities will still have to bid for funds, the Treasury will still control the purse strings and radical options such as council tax reform are still off the table.
Most of the housing-specific measures in the Levelling Up white paper are either reannouncements or a foretaste of the Spring white paper on renting reform.
But there is a conundrum that has bedevilled previous initiatives: does the successful regeneration of a place end up making housing less affordable for local people?
That is what’s happened in Cornwall, where the Objective One period has brought more jobs and reduced the income gap with other regions but also seen average house prices treble to more than nine times average earnings.
Seen from that perspective, perhaps better housing affordability is one benefit for the North and Midlands that does not need levelling up (even if that ignores severe pressure in the most successful places in those regions).
The white paper also admits that the apparent gap between household incomes between London and other regions starts to disappear when you include housing costs:
‘The difference in median disposable incomes between London and the North East shrinks from 25% to 11%. Indeed, looking at disposable incomes after housing costs, London is no longer the best performer.’
It argues that there is a ‘circular, agglomerative pattern’ in which areas with high-paid employment attract more highly-educated people ‘but this growth puts pressure on infrastructure and housing, creating a city that is less safe and more expensive, congested and polluted than elsewhere, damaging residents’ lived experience’.
That historic imbalance in jobs and opportunities creates greater pressure on housing affordability in London and the South East but ‘the investment necessary to meet rising demand perpetuates geographical imbalance’.
But that raises another conundrum: can that investment really be rebalanced towards areas that need levelling up without producing even more housing pressure and homelessness in the most unaffordable areas?
The white paper argues that it can and that ‘attractive new communities, made possible by the UK Government’s investment, and the rebalancing of housing and transport investment, will reduce pressure on housing and on greenfeld and Green Belt sites in overheated areas of London and the South East’.
If Levelling Up looks a huge stretch in the rest of the country, the idea that it can also fix the crisis of housing unaffordability stretches its credibility to breaking point.
Prepare for Groundhog Day all over again.