Regional levelling-up is set to be the catalyst for national growth as the UK emerges from the pandemic, says Dave Beddell, responding to the chancellor’s spending announcements.
This week’s announcements by the chancellor on the changes to the ‘green book’, the trailing of the prosperity fund, the establishment of a new National Infrastructure Bank and devolved transport authorities, are all welcome steps towards helping our regions realise their full potential. Rishi Sunak has put the tools for the country’s levelling-up agenda firmly in place.
As a proud northerner myself, I know how important this agenda is to our great cities and regions. Whether in Newcastle, Hull, Leeds, Manchester, or Liverpool, all are united in experiencing decades of comparative under-investment, poor transport links and underperforming productivity. That these are also among the worst hit areas in terms of the health and economic impacts of the pandemic is no coincidence either.
The final piece in the puzzle will come with Northern Powerhouse Rail. When it is finally announced, it will provide the glue to the super-region, allowing us to be considered a single economic unit, all the while connecting people to new opportunities. It will also ensure that our cities remain close allies and partners and not competitors. Frankly, the fact that we did not have more progress on this from the chancellor today is a missed opportunity for a clear and demonstrable commitment to levelling-up.
Changes to the ‘green book’ are a symbolic shift in culture and while the UK Infrastructure Bank can potentially provide new sources of capital for investment, it will need to move beyond commercial loans if it is to succeed. From its future campus in the north, the bank could support projects across the UK, but there are some obvious caveats around how quickly this will be the case.
The surprise announcement of a £4bn levelling-up fund, which draws strongly on the principles of the Construction Leadership Council’s proposals for a new local infrastructure fund to accelerate growth and recovery, can potentially become a catalyst for locally-led regeneration in its own right. I hope that over time its scope and capacity is expanded.
The £220m pilots for the UK Shared Prosperity Fund should also be welcomed. Replacing EU funding, there is no reason that we couldn’t use this to tackle further inequalities through investment in freeports and enterprise zones. With more flexibility in our approach now possible, we can encourage low-tax jurisdictions to attract inward investment to more deprived areas.
The tools are nothing without an investment in capability, which the bank will hopefully provide. But more than this, it will ensure local leaders can seize the opportunity for a seismic shift in the levelling-up agenda as projects finally move from drawing board to reality. But we will also need to ensure that these investments are truly sustainable and help us realise our long-term net zero ambitions – something that was lacking in this week’s announcement.
However, by connecting the dots and bringing everything into sharper relief, the strategy has also confirmed in my mind that regional levelling-up will, in fact, be the catalyst for national growth as we emerge from the pandemic.
Dave Beddell is vice chair of the Association for Consultancy and Engineering and also head of strategy and growth at AECOM.