Does the Levelling Up White Paper measure up for business?

The 332-page blueprint to restructure the UK’s political, economic and social geographies to tackle regional inequalities is here.

We know that the UK has longstanding productivity and equality differences. With inequalities affecting wage growth and living standards, closing these gaps is not just a priority for local, regional and national government but also for the private sector.

What’s included in the Levelling Up White Paper?

The Government’s Levelling Up White Paper provides a serious assessment of these deep-rooted regional inequalities that have held back the UK’s economic potential for generations. There are few areas of domestic policy left untouched by the paper, from skills, innovation and health to crime, culture and sports.

This White Paper firmly hardwires Levelling Up and regional growth into every aspect of government decision making, and, given that the first 100 pages outline the scale of the challenge, there is clearly a lot for the government to work through. It calls for "wholesale changes to the information, incentives and institutions which underpin spatial decision-making in the UK". That approach should apply to all decision-making in government.

The pillars underpinning this new policy regime are:

1. 12 medium-term missions to be enshrined in law
2. reshaping central government decision-making aligning policies with the wider Levelling Up agenda across government
3. empowering local decision-making through further and deeper devolution
4. data, monitoring, evaluation
5. transparency and accountability through annual reporting and the creation of an external Levelling Up Council.

So what is the Government actually doing?

The Levelling Up White Paper sets out four overarching missions:

• Boost productivity, pay, jobs and living standards by growing the private sector, especially in those places where they are lagging
• Spread opportunities and improve public services, especially in those places where they are weakest
• Restore a sense of community, local pride and belonging, especially in those places where they have been lost
• Empower local leaders and communities, especially in those places lacking local agency

These missions are then underpinned by 12 medium-term targets to be protected in legislation and achieved by 2030. These 12 missions are then accompanied with 30+ policy announcements to kick start the Levelling Up programme.

What’s the challenge ahead?

This White Paper is a step in the right direction and there are some good signs of progress in regional growth. These include a focus on Whitehall to consider regional growth in government policy making, a devolution framework to encourage more sensible functional economic geographies and the recognition of the CBI view that business-driven economic clusters can be the catalyst that brings Levelling Up ambitions to life.

While many across the political and economic landscape may feel that the White Paper was lacking or rebadging old policy as Levelling Up, we believe that there’s a real sense that government is listening – there is now a framework to shape business interventions and engagement over a prolonged time period.

That being said, it does not mean that there aren’t questions being raised and opportunities for greater clarity – the White Paper references a further 7 additional papers forthcoming on topics including health disparities and integration, food strategy, schools, rural proofing, the private rental sector and supporting those with disabilities to live independently. There is also the continued need to push for ambitious growth to create a larger share of prosperity across the country.

They say time is money and this White Paper poses two very serious challenges about both.

On time – while it is good to see the Levelling Up agenda go beyond political timelines of the 2024-25 election cycle, 2030 is only eight years away. Eight years to tackle a problem 100 years in the making will be a challenge. This will require the dedicated commitment of multiple governments to reverse.

On money - the Treasury has set the fiscal envelope through to 2025, under the Spending Review in October 2021. Unlocking better outcomes through co-ordinated approaches between Government departments will be key over coming years, as each Minister sets out how their team will deliver Levelling Up through policy interventions. The lack of sign posting for future Levelling Up funding, replacement EU structural funding or agriculture funding beyond 2025 needs to be addressed to give confidence to the private sector to invest.

The proof of Levelling Up will be in the delivery, and, as the paper itself highlights, this isn't the first attempt to rebalance the economy and regenerate communities.

Cluster opportunities: why these matter for UK businesses

The paper rightly accepts the CBI view that business-driven economic clusters can be a catalyst that bring Levelling Up ambitions to life.

Clusters provide a favourable operating environment for businesses. This is because businesses that operate in these ecosystems can benefit from working together, sharing and specialising. In practice, this means businesses that collaborate within a sector and geography become more competitive. And the return on investment for any business that gets involved in cluster development can be significant.

It’s a cluster approach that is enabling Edinburgh to become a world leader in financial services and fin-tech, with almost a quarter of the city’s GVA coming from this sector alone. It’s also allowing South Wales to emerge as a player in the world’s compound semi-conductor industry, which is projected to grow to over $300bn as a market by 2030. Business leadership in developing and investing in these hubs of commercial excellence will hold the key in powering long term economic growth and creating high value jobs in every region and nation of the UK.

How can you get involved?

The CBI will develop resources to help businesses understand, support and grow through cluster development by helping to coordinate the private sector’s commitment to Levelling Up.

The CBI will also launch two demonstrator projects in high-potential cluster regions. These will bring together key players in cluster development and will be used to test and refine our theories so we can develop a new approach to creating thriving regions that can be applied across the UK. The demonstrators will also provide regular briefings and communications for government on what they can do to better support these activities.

There will be a SteerCo of leading local, national and multinational businesses, universities and colleges and it will draw on the input and ideas of our 800 strong regional council networks.

There are several different opportunities to get involved, including:

• Shape the change your business needs by participating in our programme of events on regional growth with CBI members and key partners to shape the CBI’s work on cluster development
• Embrace the change your business can be receiving exclusive, practical guidance to support and empower your business, helping you strengthen your business model, stay ahead of your competitors, and stay ahead of the curve in an ever-changing economy
• Lead the change and showcase your business by working with our editorial and policy teams to make the CBI your platform, showcasing your expertise, innovation and thought leadership.

To discuss the Levelling Up White Paper and to share your views on this government agenda please contact Matthew Lowe (Senior Policy Adviser).