2023 Spring Budget and levelling up

Dr Andy Mycock, Y-PERN Academic Steering Group Member and Reader in Politics, University of Huddersfield

The Spring Budget will be of particular interest to those who have charted efforts by the UK Government to rebalance or ‘level up’ the country over the past decade or so. It is uncertain as to whether ‘levelling up’ will endure as salient political term or will it be discarded to join the Northern Way and the Northern Powerhouse. ‘Levelling up’ has somewhat diminished in its policy profile since Rishi Sunak became Prime Minister when compared to Boris Johnson’s tenure in office. But while Chancellor of the Exchequer, Jeremy Hunt, has proven reluctant to frame developing plans for fiscal devolution and local economic growth in terms of ‘levelling up’, it is a term which will continue to resonate in political and policy circles until a new phrase is introduced.  

 Criticism has proven widespread concerning the application process, scale, allocation, and purpose of the two rounds of ‘Levelling Up’ funding held thus far. The contradictory approach of the UK Government to devolution in England has seen ministers strident in their rhetorical support for radical devolution of power and autonomy for regional and local authorities while they also tightly audit investments across the country. Regional and local government leaders complain the competitive application process as creating a ‘begging-bowl culture’ controlled by central government, which some argue has been skewed towards select constituencies in the hope of partisan political returns at the ballot box. Questions have also been raised about the limited scale of funding, both in terms of its potential to address significant and embedded inequalities across the country and when compared with investments made by Germany and others. The impact of inflation has also seen beneficiaries of ‘levelling up’ funding scale back projects or put them on hold.  

 The bespoke approach to ‘Levelling Up’ funding has constrained the ability of regional and local governments to develop strategic policy plans. For example, just 22% of bids from England to the second round of the levelling up fund were successful. This is lower than the first round of the fund when 33% of applications secured funding. Yorkshire and the Humber had the lowest success rate in the second round, with a positive outcome for just 13% of its bids. This noted, it was one of the more successful regions in round one funding, with a 42% success rate. The lack of certainty with regards to the scale of funding from year to year has had significant implications in terms of policy planning and delivery, particularly for large scale pan-regional projects. This uncertainty is further exacerbated by a continued lack of surety as to the extent of investments in transport infrastructure across the north.  

 If and how the Chancellor might seek to fund ‘levelling up’ initiatives in his Spring Budget will provide a good indication of the profile of ‘Levelling Up’ as a policy agenda and a campaign issue as we move towards a General Election. The scale of funding announcements will be important, as will any modifications to the application and allocation processes. It is likely that there will be an attempt to avoid the headlines from round two of ‘Levelling Up’ funding which some argued disproportionately benefitted the London and the South-East when compared to the rest of the country.  

 But many in the town halls across Yorkshire and the Humber will be keen to hear about whether the Chancellor’s plans for fiscal devolution shift from rhetoric to reality. For many, ‘Levelling Up’ has been compromised by a lack of connectivity regarding debates about funding and power. The current UK Government approach to devolution of power has followed the well-meaning but piecemeal gradualism of successive governments over the past 30 years or so. The constitutional reordering of England now means that local and regional government is a mishmash of different formations, sizes, and remits. There remains an absence of a clear purpose and destination for devolution in England, or how it might connect and cohere with devolved institutions in Scotland, Wales and Northern Ireland. It is unlikely that the Chancellor will seek to move from a ‘whack a mole’ approach to constitutional and fiscal devolution by seeking to initiate a more comprehensive review of the over-centralised governance of the country. As such, the Spring Budget will likely to see more of the same in terms of approaches to ‘Levelling Up’. 

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