Budget 2021 analysis: How Rishi Sunak missed a golden opportunity to level up the UK

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Did Rishi Sunak’s Budget deliver on his government’s commitment to levelling up the nation? He missed a golden opportunity, argues Marcus Johns

The levelling up rhetoric has been ramped up year on year since Boris Johnson’s first speech in 2019. It’s been atop key government documents, press releases, and ministers’ speeches ever since.

In the days leading up to today’s Budget and Spending Review, announcements and press gossip was no different.

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Chief Secretary to the Treasury Simon Clarke, who is the Middlesbrough South and East Cleveland MP, promised that there would be a ‘golden thread’ of levelling up the North running through the budget. So, the anticipation in places like the North was high. This was to be an acid test for levelling up.

After all this time and all this hype, today’s budget simply failed the test, because it lacked the crucial ingredients of substantial devolution, sustained investment - and a plan that brings them both together.

There were many capital (but little revenue) spending announcements—representing billions of pounds of investment. Yet, this golden thread of levelling up turned out to be a half-baked flurry of piecemeal spending announcements, like the £1.7 billion allocated for the levelling up fund and a Shared Prosperity Fund that is smaller than the funding it replaces.

This was possibly designed to disguise the government’s failure to deliver its long-awaited levelling up white paper, or any ambitious and long-term plan to level up in any meaningful sense. Indeed, many of the announcements that we heard today were rehashed old promises, creatively presented to improve their appearance, or lacked necessary details.

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On local government funding, the Chancellor promised a real-terms increase in resources worth £4.8 billion for councils, flagging it the biggest rise in a decade. Yet, the detail shows that this is over three years—making it worth only £1.6 billion per annum in comparison to the LGA’s finding that Covid-19 pressures on local Councils require £2.6 billion just to maintain existing service levels.

Indeed, it was interesting that the Chancellor repeated comparisons with a decade ago in his speech, because it’s easy to make increased spending look larger by comparing it to the austerity period, which heralded the deepest cuts in recent history and regions like the North losing 20% of council spending on services.

On transport, there was no mention of critical and long-promised strategic transport investment like Northern Powerhouse Rail or HS2’s Eastern Leg, leaving the North and local leaders in the dark when planning their economic futures.

Some funding was announced to provide ‘London-level’ public transport in a handful of cities. What was announced was packaged as new, but only £1.5 billion of the £5.7 billion allocated to some Mayoral Combined Authorities was new today, the North of Tyne and North East Combined Authorities were overlooked, and places without metro mayors did not even get a look in. Compounding this underwhelming investment is the lack of long delayed plans like the Integrated Rail Plan for the North.

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The same is true of levelling up and devolution—as we see yet another fiscal event goes by without the Levelling Up White Paper. This means no clear plan, strategy, or leadership for what funding announcements hope to achieve collectively or how places left out of devolution so far can take control and thrive.

No credible plan should see government promising funding today and detail in future. That’s simply kicking the can down the policy road.

Take investment in R&D, for example, government claim they will increase the share outside the Greater South East. Now, this is a step in the right direction, but once again the delay to the Levelling Up White Paper rears its head, because the full detail will only be made available by that plan. This is now a recurrent theme for this government—from rail reform to the future of devolution.

Rightly, the Chancellor recognised today that the location of your birth determines too much of your future in the UK. But his budget highlighted that there is not the plan or ambition to turn that around.

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The UK’s regional divides are internationally unprecedented and levelling up could be a golden opportunity to fix them, but with the crucial ingredients missing, levelling up is not going to deliver a rise.

Marcus Johns is a research fellow at the leading think tank for the north of England, IPPR North, where he leads their research on regional economics, local economic development, and transportation.

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