How would Labour change Levelling Up?


The Labour Party have indicated that if they come to power they will not jettison the Levelling Up  plan (though no doubt they might re-badge it) but make it work properly.

This makes a lot of sense. There is broad consensus on the principle of improving the economy of disadvantaged regions.

It is the paucity of implementation of the LU plan that has been the main failure, not the original ideas, which have had little real trial in the political and economic conditions of the last two years.

The fact that there was little money attached to the plan made it an easy target for Labour’s initial rejection when it was eventually launched in February 2022, having been delayed by Covid since featuring as part of Boris Johnson’s electoral programme in 2019.

Since then the Levelling Up Department has ploughed on with some of the less spectacular elements but in early 2024 it turns out that only a small proportion of the £10bn that was allocated to the plan has been spent. The £10bn would only have made a limited impact on disadvantaged regions but it is not a derisory sum to start with — large enough, apparently, to have been worth holding back to help offset what turned out to be a Brexit deficit rather than dividend.

The other reason for the low spend is the crisis of local authorities: prime sufferers under austerity, and struggling to deliver their responsibilities for the care system, they lack capacity and expertise to process innovative and complex local projects for relatively small amounts of money.

Yet the argument about money only touches the surface of the issue. Levelling Up never claimed to be primarily about redistribution in a direct sense. The economic part of the concept had two main strands: first to direct more existing government spending into the regions, and secondly to create or boost regional economic hubs to generate wealth in the regions themselves, attracting a bigger proportion of the national and international investment which flows into London.

The fact that this would inevitably be a long-term programme – eight years was proposed – did not prevent the media from declaring Levelling Up a failure for not improving standards of living in disadvantaged regions within a year.

The regional economic hubs idea corresponds closely with Rachel Reeves’ regional wealth building objectives. But how can they be set in motion with the empty kitty that Labour – or any new government – will inherit in 2024?

Part of the answer may lie in the part of the programme that has been least understood, arguably even by its own authors, the element of ‘social capital’. It is worth looking at how this element was conceived and how it could be tweaked to produce both a better regional economic impact in the long term and some visible short-term gains.

The LU plan sees regional economic improvement as depending on mobilising six forms of capital in concert:

I set the ‘six capitals’ out here as an interactive model but in the plan they are only a list. The narrative aims at a holistic vision but the dependence of each of the capitals on its interaction with the others is not quite assimilated.

When it comes to social capital, there is evidently a problem of concretising it. The authors sensibly ask what it means in practice, what manifests it and how you would know you were improving it.  Their answer is that it consists in ‘pride of place’, and that in practice it would be boosted by actions such as improving high streets.

The question of how you would measure whether pride of place has improved is postponed: there are no established measures or baselines for this concept.  Despite some illuminating passages about community involvement towards the end of the lengthy plan, in effect social capital is not integrated into the thinking but is reduced to marginal fractions.

However, because improving high streets is an area of action that can in fact be done, in at least a scattering of localities, with a limited amount of money and with some visible outcomes, some of the action that has taken place is of this kind.

What could Labour do differently on this aspect and what difference could that make to the effectiveness of the plan as a whole?

There is a wealth of literature about how to develop communities which is mostly about fieldwork method but thin on the question of how to measure effects.

A new approach by Labour could identify social capital with a flourishing local community sector at neighbourhood level, measured by numbers of community groups, numbers of people participating in them, effects on well-being, social cohesion and employment, and verification of achievement of the community groups’ own goals as assessed both by their own members and by local public service agencies.

Achieving measurable improvement would require skilled community development (CD) programmes, but these would be critically distinguished from previous programmes by having a framework of concrete goals to work to and by being an integral part of overall regional economic development. Local action would include a prolifery of neighbourhood economic development projects twinned with products, markets and labour opportunities generated by the regional hubs.

Neighbourhood projects would be treated as partners contributing active ideas and delivering local commitment, not just as remote passive beneficiaries.  

Who could deliver such projects? Local authorities are the main natural vehicle and some still retain experience and exemplars in this field despite the unprecedented current pressures. But the combination of fourteen years’ austerity, the care crisis and Conservative neglect of this field has taken a huge toll.

Local authorities would still be key partners but leadership should be vested in the regional hub initiatives themselves, with dedicated initial budgets for this sixth ‘capital’ and at a later point a continuous dividend from regional economic gain. The social capital element should not only be integral to the regional hubs but their leading edge.

It should also link actively with the regional and local arms of the other public service providers, especially of health, policing and welfare, and with service-providing voluntary organisations (not to be confused with neighbourhood-based community groups).

The LU department has already shown in small ways that it can make a direct impact on disadvantaged neighbourhoods by allocating support to key local schemes. Generating widespread neighbourhood-level support in the first phase would show concrete intent and gain popular support for the difficult longer term job of building regional wealth.

From Gesture to Structure: Community Involvement in Levelling Up, Radix (2022) provides a more detailed analysis of the LU plan and a rationale for boosting the social capital element. Artwork: wmchin2003.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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