The 'Levelling Up' agenda, launched with great fanfare in 2022, promised to rebalance the UK economy, addressing deep-seated regional disparities. Two years on, the verdict is mixed. While some areas have seen marginal improvements, the structural gaps between London and the Southeast and the rest of the country remain stubbornly wide. This report evaluates the policy's impact, scrutinising its successes and failures.
Central to the initiative was the allocation of £4.8 billion through the Levelling Up Fund, targeting transport, regeneration, and culture. In towns like Grimsby and Doncaster, new railway stations and road improvements have materialised. However, these projects, while welcome, are often piecemeal. A study by the Institute for Fiscal Studies notes that total public investment per person in the North East, at £1,200, still lags behind London's £2,400. The disparity in productivity is even starker: London's output per hour is 32% higher than the UK average, compared to 10% in the North East.
The government's devolution deals, another pillar, have transferred powers to metro mayors in Greater Manchester, West Midlands, and elsewhere. Yet critics argue these deals lack sufficient fiscal autonomy. Unlike nations in Germany, UK regions cannot raise their own taxes. The result is a system that, at best, moderates inequality rather than reverses it. Employment rates tell a similar story: the South East boasts 79% employment, but in Wales it is 73%, and in the North East, 72%.
Infrastructure spending has been concentrated on large-scale projects like HS2, heavily scaled back, and the levelling-up of bus services. But for many smaller towns, connectivity issues persist. A recent report from the BBC Shared Data Unit found that 40% of local authority areas have seen no significant transport investment. In coastal communities like Blackpool, average wages remain below £25,000, compared to £40,000 in inner London.
Education and skills are the great engines of social mobility. The 'Levelling Up' white paper set a target for 90% of primary school children to reach expected standards by 2030. Currently, that figure is 65% nationally, with the worst-performing areas in the North East. The gap in GCSE attainment between disadvantaged pupils and their peers has narrowed only slightly, from 27 percentage points in 2019 to 25 in 2023. Moreover, the reduction in apprenticeship spending in real terms under the current government has hampered skill development. Only 17% of young people in the North East enter higher education, versus 40% in London.
Health inequalities, exacerbated by austerity and the pandemic, remain stark. Life expectancy in the richest areas is 10 years longer than in the poorest. The Levelling Up plan did not directly address NHS funding formulas, which still favour wealthier areas. A report from the Health Foundation estimates that closing the health gap would require an additional £20 billion annually, a sum far beyond current commitments.
Local governments, essential to levelling up, have seen their budgets cut by 40% since 2010. The Social Market Foundation found that councils in deprived areas have reduced services three times faster than those in affluent ones. This 'austerity paradox' undermines the very policy it aims to complement.
On the positive side, the Shared Prosperity Fund, replacing EU structural funds, has provided £2.6 billion for local projects. In Cornwall, this has supported renewable energy cooperatives. Yet in many areas, the fund is too small to catalyse significant change. The National Audit Office warns that it is spread too thinly, often duplicating existing schemes.
A key challenge is the lack of a uniform benchmark for success. The government has set 12 'missions', but these are broad. For instance, increasing R&D investment to 2.4% of GDP by 2030 is said to 'help level up', but targeting it geographically is missing. The UK's R&D is still concentrated in Oxford-Cambridge-London triangle. Without explicit directives, private investment flows to where returns are highest, deepening disparities.
The 'Levelling Up' legacy may ultimately be defined by its symbolism rather than substance. It has focused political attention on inequality, but the failure to shift economic geography suggests a need for more radical approaches. Devolution of tax powers, fiscal transfers to match need, and a robust industrial strategy are required. As the next election approaches, voters in left-behind towns will judge not by promises but by observable changes in their daily lives. Unless drastic measures are taken, regional inequality will persist, a blight on the nation's cohesion.
