Why levelling up failed

We must think local in order to foster growth


This article is taken from the July 2024 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.

As Antonio Conte’s tenure as manager of Tottenham Hotspur began to spiral in January 2023, the Italian made a striking observation on British football culture: 

In England, I think there is a bad habit that there is only the coach to speak. I have never seen the medical department come here and explain that this player is having difficulty to recover. I never see the club or sporting director to come here and explain the strategy and the vision of the club.

Harkening back to his previous experience, Conte reflected that “In Italy, every game, before the game, there is a person from the club who goes with the media and then has to answer many questions,” whereas in the UK, “There is only one face to show.” 

The former United States Secretary of State, Dr Henry Kissinger, said in an interview with Bayern Munich FC on the eve of his 100th birthday, that “American football and baseball are a glorification of the human experience — football is its embodiment … it multiplies the situations where you feel the great vastness of the human condition.” Kissinger was right, and Conte’s British football observations apply to much more than just the playing field or press conference room. 

Without knowing it, Conte put his finger on an aspect of today’s British political leadership, which prefers centralisation to decentralisation. London overshadows the UK political landscape in the same way the British football manager does as the club’s single voice.

 There is little desire for a hybrid system, in which multiple individuals can step up within a team to hurt the opponent, such that it is unclear who the leader actually is (the philosophy adopted by Manchester City, four-time consecutive winners of the English Premier League, whose leader Rodri is the most invisible and yet consequential player on the pitch). 

On the back of the Conservatives’ 2019 election victory under Boris Johnson, the UK government enacted its “Levelling Up” Policy, designed to reduce inequalities across the nation. While ambiguous, levelling up suggested that more prosperous regions are necessary as part of securing the UK’s long-term economic success. 

It emphasised the need for a hybrid system, in which multiple cities contribute meaningfully to the country’s economic success. Johnson was an effective advocate for the idea, connecting with local people and breathing life into it. I still recall a visit to Darlington, at the height of Partygate, in which locals spoke fondly about the then prime minister. 

Yet in March this year MPs on the Public Accounts Committee issued a damning report which identified no major example of a levelling up success. Local authorities had managed to spend only £1.24bn of a £10.47bn allocation from central government to be spent between 2020/21 and 2025/26. 

The chair of the committee, the Labour MP Dame Meg Hillier, mourned that Michael Gove’s Department for Levelling Up, Housing and Communities appeared “blinded by optimism in funding projects that were clearly anything but ‘shovel-ready’, at the expense of projects that could have made a real difference”. Furthermore, the committee was “surprised” to find “there appears to be no plan to evaluate success in the long term”.

It is noticeable that levelling up has scarcely figured in this general election campaign. Issues such as national security, energy security and the cost-of-living crisis take precedence. Levelling up is of little apparent interest to Rishi Sunak and there is little evidence that Keir Starmer views addressing regional inequalities as a driving focus of his premiership. 

If this were the case, there would be more attention given to the issue. For all intents and purposes, levelling up is over, the term barely used by Sunak or Starmer, despite its prominence two years ago. And it is unclear whether the idea will be resurrected in another form. 

The moment Levelling Up ended, however, was not Johnson’s resignation as prime minister but several months before. It died on 24 February 2022 when the first Russian tank crossed into Ukraine. That was the inflection point between the “local power” focus of the pandemic — which so dominated the public psyche — and a return to global concerns. 

This was in part a question of personnel. Based on conversations I had with government advisors at the time, the war in Ukraine monopolised the time and attention of Johnson and other ministers, leaving much less time to focus on regions. A single geopolitical event upended the policy, and it petered out. 

In conducting the autopsy on “Levelling Up”, analysts tend to focus on the lack of use of funding. Millions were left unspent. They highlight the pitting of cities and towns against each other, candidates competing for funding from the same pots. And they emphasise pork-barrel politics in which funds flowed to Tory constituencies. 

While problems, these criticisms distract from a question of greater significance in British efforts to reduce regional inequalities. This question is that of the mindset underpinning the policy, in which it is seen to be the responsibility of the central government in London to — like a football manager — solve the nation’s problems. This encourages paternalism on the part of the state, reducing the agency and responsibility of people within their own regions to shape their own destinies. 

With this mindset, technical concerns — for example, the administration of the Levelling Up Fund by the UK Government — matter more than initiative at local levels in transforming a region. The reality, however, is that it is not the UK government that will level up the nation, rather motivated private individuals and small groups. Whitehall may provide direction and initial funding. But it is not the job of government to orchestrate regional transformation from the top down. 

This is concerning for a nation that, as a Canadian, I have tended to see as particularly valuing organic, bottom-up action as opposed to following an imposed government vision or mission. The risk is that economic transformation is seen to depend on government, rather than on persistent private initiative. 

Questions such as “To what extent should government drive the levelling up effort in the UK, as opposed to individuals and small groups of leaders?” are seldom asked. Instead there are conversations about the imposing of industrial policy. There is, as far as I can discern, a lack of motivation and confidence among British people to compete in a world that is increasingly multipolar and competitive, with small and medium-size powers on the rise. 

One Canadian example provides a realistic approach for Britain. The example is that of Eric Newell, former Chief Executive Officer of Syncrude — a leading Canadian energy company located in Fort McMurray, Alberta. 

With the Alberta energy sector struggling in the 1980s, and with Canadian federal and provincial governments unable to agree to unified royalty and taxation regimes, Newell championed a multi-year effort to engage federal, provincial and municipal governments, trade unions, multinational and junior energy companies, trade associations, Aboriginal groups and multiple other stakeholders in an attempt to resurrect the sector. 

Newell’s intensive six-year campaign between 1991 and 1996 led to the signing of the Declaration of Opportunity, which helped breathe new life into the sector. This agreement generated $5.6bn in new investment and created 10,000 jobs, followed by another $65bn investment over the next eight years. By 2014 it had turned Alberta into the fastest-growing and most prosperous region on the continent.

The Declaration of Opportunity was not the initiative of federal government, but rather of a motivated small group of leaders intent on transforming the economic prospects of Canadians. The point is that one individual, and a small group of allies, turned an industry from one that had lost its momentum to a global success based on their love of country and region, intrinsic motivation, unified vision across a complex series of partners and persistence amid many setbacks. 

These individuals “levelled up” Alberta, and by extension Canada. The Liberal federal government at the time and Deputy Prime Minister Anne McLellan in particular, were key participants in this success. But the federal government did not initiate the Declaration of Opportunity. 

Newell was successful in “establishing friendships and trust between people, bridging industry and government”, and succeeded in gaining an “inside track in shaping [McLellan’s] perception of the industry”. His approach was organic, based on forming friendships across many walks of life. 

Newell’s pivotal role in generating such prosperity is well documented in “Policy Entrepreneurship”, a University of Calgary masters thesis by Jessica Weber which finds that he helped bring to fruition the success that made Alberta a prosperous region, giving to, rather than taking from, the rest of Canada. Weber finds that “the words of a single individual … [were] in fact decisive”. Newell “imagined other people’s perspectives and endeavoured to think his way into their concerns and interests”. 

Yet in the UK, government is typically seen as the main mechanism for levelling up. Take for instance the North East of England. Local authorities in the region were recently reorganised in order to form a larger North East Combined Authority, striking a North East Devolution Deal in the process and generating £4.2bn of investment over 30 years. 

this was the result of sustained efforts by regional leaders, as well as Michael Gove. But emphasis is needed on the importance of private initiative in generating the growth that will build on this deal. Reverting to Newell and his team, they did not rely on the federal or provincial governments in acting; they formulated their own vision. 

In the north east of England, one example does away with the idea that central government will ensure future regional prosperity — Saudi Arabian investment. In a matter of years, Saudi investment turned Newcastle United Football Club into a success, providing weekly doses of hope that seemed unfathomable for Geordie football fans over the previous decade. In this example, we see a motivated, rising power take the initiative and generate opportunity where it did not previously exist. 

The success of the football club has seen despair turned to hope, none of it generated by the Houses of Parliament in London. It is a small example, but begs a serious question about where the motivation and confidence of local people will come from if their community is to generate opportunity and compete in a fast-changing world? 

Levelling up’s failure over recent years is due to an inability to recognise the need for private initiative as the vital ingredient in changing the trajectory of a place. This in turn implies a need to think about the roles of individuals in creating and sustaining opportunity, stepping forward in the manner advocated by Antonio Conte in English football. 

Yes, central government engagement is important, but to focus on the successes or failures of government is a distraction from these much more decisive, first-order concerns. 

Eric Newell provides an example of how this was done successfully in Canada. Central government came along for the ride, but was not in the driver’s seat. Levelling up will not be achieved and will never be secured by the generosity of a government alone, whatever its political stripe. 

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