UK regions welcome 'levelling up' Budget plans

The UK government has taken its first steps towards fulfilling its commitment to 'level up' the economy by shifting power and spending away from London and SE England and towards development in the regions.

regional transport plans announced in march 2020 Budget

David Sapsted

13 March 2020

Chancellor of the Exchequer Rishi Sunak used his first Budget to fund a raft of regional projects, to set up an “economic campus” somewhere in the North of England and to eventually relocate up to 22,000 civil servants out of the capital.The moves, he says, were intended to “change the mindset of government to ensure economic decision-making reflects the economic geography of the country”.In addition to the funding of specific projects in English regions, the Budget also contained pledges of extra funding of £640 million for Scotland, £360 million for Wales and £210 million for Northern Ireland.

Regional road, rail and transport infrastructure funding

Mr Sunak announced an outpost of the British Library in Leeds, affirmed the government’s commitment to building a new rail link between Manchester and Leeds, and announced that West Yorkshire would be allowed to elect its first regional mayor next year, attracting annual, additional investment of about £37 million.There was also a promise of £4.2 billion of funding over the next five years for “London-style” public transport settlements in Liverpool, West Yorkshire, Greater Manchester, West Midlands, Tyne and Wear, West of England, Sheffield and Tees Valley.

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Hundreds of millions more were promised for road projects across the country along with major funding for affordable housing schemes and capital spending on new flood defence projects.

Government plans to level up UK's regions and nations

Rosalia Wood, regional industrial manager at the Institute of Chartered Accountants in England and Wales (ICAEW), says the Budget showed the government "is looking to walk the walk in terms of the levelling up of the UK’s regions and nations".Ms Wood adds, "We regularly hear from ICAEW members in business in the regions that a key blocker to business growth in terms of both logistics and attracting a talented workforce is a lack of accessibility in terms of digital and transport connectivity."With £600 billion pledged by the chancellor in the years leading up to 2025, it is clear that those concerns are now being addressed, and long-proposed changes to the Treasury Green Book rules will make investment in areas outside of large metropolitan areas in the South possible."

A need to build on talent and skills

However, Ms Wood says she was disappointed that, although £1.5 billion capital spending on further education colleges was promised, "scant reference was paid in the Budget as to how we can provide the best talent and skills for regional industry".It was a position shared by the tech industry lobby group, techUK. While the organisation welcomed new investments in a National Skills Fund and Institutes of Technology, the Budget does "show that government recognise the challenge but perhaps not the scale"; the organisation adds, "The country will need a radical rethink on adult education and retraining if we are to fully benefit from the opportunities of the future."

Technology investment to be boosted

Overall, however, Julian David, CEO of techUK, applauded the Budget's "pro tech" plans, especially the pledge to boost R&D spending to £22 billion and to extend 4G coverage to even the remotest areas of the country.“A huge boost in R&D spend, investment in digital infrastructure to boost connectivity and a commitment to level-up on skills contribute to a package that will ensure UK tech stays ahead of the game and continues to contribute to growth and prosperity for people, the economy and the planet," he says.

What is 'moonshot' funding and which region will host its agency?

Mr David also welcomed the plan to spend £800 million creating a 'moonshot' agency to fund cutting-edge research that has a high chance of failure. The idea is to create a UK 'blue skies' funding agency that copies the US Advanced Research Projects Agency, a government agency that fuelled the invention of the internet.The crucial question now for the regions is where this agency will be located.