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Is the North-South divide getting worse?

Big government promises have transpired into little funding or action on levelling up, says Northern think tank

The UK’s regional divides are widening despite the government promises to “level up” the country, according to a Northern think tank.

A report published by IPPR North, the northern branch of the Institute for Public Policy Research, said that while the government’s rhetoric on levelling up has reached “fever pitch”, concrete policy had remained “elusive” and it had done little to deliver on promises to reduce regional inequalities in the UK. 

Levelling-up funding failures

The report, which compares levels of public investment in London and the Southeast with those of the North, has critiqued several of the government’s promises which related to “new pots of money”, reported The Times

Key new funds, such as the “Levelling Up Fund”, while “welcomed”, only represented an investment of £32 per person in the North of England, set against a £413-per-person drop in annual council service spending over the past decade. 

Likewise, the £2.bn “Shared Prosperity Fund”, designed to replace lost European Union funding due to Brexit, is set to deliver a 40% shortfall in funding over 2022-2025, compared with the funding that would otherwise have been provided by the EU. 

The report also took aim at the scrapping of the eastern leg of HS2 from Birmingham to Leeds, and downgrading of a high-speed rail line between Leeds and Manchester, which it said was a prime example of the government’s “tendency to overpromise and underdeliver on levelling up.”

The IPPR North report drew attention to the attainment gap between the North of England and the rest of the country at “every level of assessment”, and said closing the gap is “crucial” to addressing widening economic inequalities. 

According to the report, the scale of investment needed to challenge UK regional inequalities is comparable to German reunification – and it looked to the country to examine how German governments had rebalanced the economy since 1990, “where successive governments have spent an average of €70bn a year reducing regional divides since reunification”, reported The Guardian

Jonathan Webb, a senior research fellow at IPPR North, and one of the report’s authors, said: “However we measure investment in levelling up – whether we compare with Germany’s successful efforts to rebalance its economy, or to London-level investment – it’s clear that central government simply hasn’t put its money where its mouth is when it comes to rebalancing the economy.

“Levelling up will be consigned to the list of hollow, unmet promises made to people in regions like the north for a long time now, if it isn’t underpinned by investment and, crucially, fiscal devolution.”

Red Wall fears

The “stark disparities” on display will only “fuel concerns” among Red Wall Conservative MPs that the government’s “flagship” policy is “underfunded, and do not fulfil Boris Johnson’s promise to rebalance the economy”, said The Guardian. 

And Chancellor Rishi Sunak has already put a stopper on levelling-up ambitions for this parliament, with the Levelling Up Fund capped at £4.8bn, which critics have lambasted as a “drop in the ocean after decades of underinvestment and 10 years of austerity cuts”.

The long-awaited Levelling Up white paper is set to be rushed out at the end of the month as part of Johnson’s so-called “red meat” populist policy frenzy designed to bolster his crumbling premiership, reported The Sunday Times this weekend. Delayed since December of last year, the white paper will seek to outline new policy interventions which will address regional inequalities in the UK. 

But delays to the paper showed that the government had yet to define what levelling up meant, according to IPPR North.

“What it means in very blunt terms is people in the north of England have less access to prosperity and the good life that people in other parts of the country might have access to,” Webb told The Times.

A Department for Levelling Up, Housing and Communities spokesperson called the report “misleading” and said it focused on just one part of the government’s plans to level up the regions and the North of England.

“In addition to the £4.8 billion Levelling Up Fund, we’re providing record investment in infrastructure worth over £96 billion, £12 billion in affordable housing and a £2.6 billion Shared Prosperity Fund to help rebalance opportunity across the UK.

“The government will publish a White Paper that will drive forward this central mission in due course.”

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