How is it that the country that is home to the richest region in Europe is also home to regions whose levels of inequality bear comparison to former Soviet Bloc countries?
And how have we got ourselves into a situation where the intervention necessary to turn around that inequality needs to be at the same scale to that of Germany when it went through reunification?
These are the questions that lie behind the research carried out by the UK2070 commission, which today concludes its 18-month investigation with the release of its final report, Make No Little Plans: Acting At Scale for a Fairer and Stronger Future.
The challenges outlined in that report do not make for comfortable reading. We have become one of the most regionally unequal wealthy countries in the developed world. A child who receives free school meals in the London borough of Hackney is still three times more likely to attend university than a similarly deprived child in Hartlepool, County Durham.
There is a 19-year difference in healthy life expectancy between the wealthiest and the poorest parts of the UK. London’s productivity growth over the last decade was nine times higher than that of the area covered by the whole of the northern powerhouse. And we are spending £78billion a year on the costs associated with poverty. Inequality is not just a drag on the economic potential of the UK’s regions; it is shortening people’s lives.
At this point, I’m sure a few people will already be pointing the finger at a political party or a policy platform. That would be a mistake.
The scale of regional inequalities in the UK has not developed overnight. Our research shows inequalities have built up over decades and that the way we govern is one of the biggest contributors to this situation.
The fact that most of the spending decisions about the poorest parts of the UK are being taken in the richest city in Europe ought to give us pause for thought. Not only does this look unfortunate, it is also a sign that government is too centralised.
This centralisation is reflected in regional policies which have act more like a temporary fix than sustained interventions likely to rebalance the economy. They do not reflect the fine-grain of regional need, and they tend to be under-funded and short term. Whether they are Treasury guidelines or competitive bidding processes, the rules also tend to favour places which are already doing well.
While there has been admirable stability in the economic development structures of Scotland and Wales, England has burned through urban development corporations, regional development agencies, local enterprise partnerships and now combined authorities. You do not build sustained improvement through stop-start policymaking.
“In the years ahead of us, we will have to come to terms with the impacts of Brexit, climate change and the fourth industrial revolution.”
Lord Kerslake Lord KerslakeIn the years ahead of us, we will have to come to terms with the impacts of Brexit, climate change and the fourth industrial revolution. If we continue on current trends, most of the jobs growth will be in London and the South East, an area that is already showing signs of economic strain with unsustainable high costs and high resource consumption.
So we have to change, and to change at scale. The government says it wants to level up the UK, which is an encouraging sign. And its decision to back HS2 is the right one, because it demonstrates the level of intervention necessary to unclog the arteries of Britain’s weak regional infrastructure.
Our final 10-point plan includes creating new industrial opportunities to move to a carbon zero economy, transforming our public transport network and supply new housing. It also covers devolution and the way we develop skills and fund projects outside of London.
We also need a powerful, cross-ministerial government committee with its own dedicated team to drive and embed the levelling-up agenda, and which can review the Treasury’s metrics of success.
Most of all, we need government to go big. This is the only way to make levelling up work and to create more opportunities for better lives across regional Britain. If it cannot commit to that, it should go home. We cannot afford further disappointment.
Lord Kerslake is a crossbench peer and former head of the home civil service.