Metro mayors 'should lead levelling up plans'

The government's commitment to “spreading prosperity across every part of the UK” will not be realised by simply relocating civil servants from the prosperous South East to less affluent regions, a new report has warned.

David Sapsted

5 March 2021

Although Chancellor of the Exchequer Rishi Sunak announced in his Budget on Wednesday that 750 jobs were to be based at a new Treasury 'campus' in Darlington and that a new green infrastructure bank would be created in Leeds and a housing department HQ in Wolverhampton, the Centre for Cities report suggests this is only tokenism."Moving civil servants around like this may have symbolic importance, but it won’t level up the country in the way that the government needs to – by growing the number of high-wage, high value-added private sector jobs in the North and Midlands," says Lord (David) Sainsbury of Turville, author of the 'Levelling Up the UK's Regional Economies' report.The report concedes that the government's year-old pledge to "level up" the country had been knocked off course by the Covid-19 pandemic but says that a programme of radical change is now needed to reduce regional inequalities by supporting the development of clusters of high-value activity.Writing in the Daily Telegraph, Lord Sainsbury, a former science minister, says that successive governments' efforts to improve poorer regions’ prosperity have achieved very little."Most plans reinforced support for low wage, low value-added jobs which are vulnerable to foreign competition and technological change – they replaced cotton mills with call centres and distribution sheds," he says.There have been two reasons why these efforts have failed, he maintains. First, they lacked a regional level of government to lead regeneration and, second, London-based governments failed to understand the reasons why areas of the North were poorer than many in the South.

"Much of the Industrial Revolution took place in the North with many cities specialising in a single industry. As these industries faced competition from low-wage firms in the developing world, and their prosperity has declined, new high-wage, high value-added innovative firms grew up in the South," Lord Sainsbury writes.Now, he adds, if the government is to succeed in growing high value-added businesses outside London, it should give metro mayors responsibility for spatial planning and transport policies, bringing their powers in line with those already held by the Mayor of London. A second change would be to give mayors the power to align the courses run by further education colleges within their boundaries, with the needs of industry."Currently, FE funding rules mean that, to survive financially, many colleges must spend a great deal of time competing to attract students to courses that are cheap to run."By giving mayors the authority to co-ordinate the courses put on by FE, and by incentivising collaboration between colleges rather than competition, this could be stopped, and the courses delivered could be brought in line with the needs of industry."The report says that if mayors are to have a positive impact on local economic growth, they not only need the power and resources for joined-up transport and spatial planning, but also funds to encourage more research and development activity."In order for the policies set out in this report to be successful, the Department for Business, Energy and Industrial Strategy (BEIS) should become the lead department for levelling up," says the Centre for Cities."This will allow government to co-ordinate its own actions more effectively and successfully deliver on levelling up the prosperity of the regions."The report also proposes the creation of a National Council of Innovation to advise ministers on plans for regional regeneration.Lord Sainsbury points out that, mainly for historical reasons, government R&D spending remains heavily concentrated in places such as London, Oxford and Cambridge in southern England."However, if the high-value private sector is to grow outside these cities, the chancellor must target more R&D funding at poorer regions. This should not be difficult to do as it can be achieved by strengthening and altering the recently introduced Strength In Places Fund," he says."Two projects it is currently supporting can be used to describe the contribution it is already making. The first is investing in South Wales in a co-ordinated package of technology, R&D and training to further integrate the region’s science and technology base with its growing strengths in advanced compound semiconductor manufacturing."The second is support for establishing a national centre of excellence in Liverpool focused on developing a progressive repository of methodologies and improved models for product development for infectious disease prevention and treatment, and validated platforms for early stage product testing and evaluations."