Nearly two years ago, the government was elected on a commitment to levelling up across the UK. The pledge struck a chord with communities who felt like they had been left behind even though our economy had grown.
As we emerge from the coronavirus pandemic, and the seismic damage it has caused to our economy, the government has started to flesh out what levelling up means. With the government working on both its levelling-up white paper and a comprehensive spending review, I hope it bears in mind two things.
First, while we need to close gaps between regions, London needs levelling up too.
For some, London is a universally wealthy city, where the streets are paved with gold, and where people have it better than those living in the rest of the UK. According to this view, London just doesn’t need levelling up.
Covid’s impact on London
But while London does have significant concentrations of wealth, it is also a city which has long faced entrenched poverty and deprivation.
On the eve of the pandemic, London had higher levels of poverty and child poverty than any region of the UK, and on nearly every economic measure, the capital has been hit hardest by the coronavirus crisis. London has seen both the biggest decline in jobs, the highest number of jobs furloughed, and the slowest economic recovery of any region. London now has more people claiming unemployment-related benefits than in Greater Manchester, the West Midlands, Liverpool City Region, Sheffield City Region and the Tees Valley combined.
While there is a strong case for levelling up in deprived communities outside of the capital, so there is a pressing need for levelling up within the capital too.
Second, London can help support levelling up across the UK.
London’s success is the UK’s success
For some, the UK’s economic future is zero sum; London’s success comes at the cost of the rest of the UK. But London is of course not separate from and in competition with our national economy – it is an inextricable and crucial part of it.
In so many ways, London’s success is the UK’s success too. London-based businesses have supply chains across the UK; from the new hydrogen fuelled double-decker buses that will run along the number 7 route in my borough that were made in Northern Ireland and Nottingham, to the 50,000 tonnes of Welsh steel used to build Crossrail, public and private investment in the capital benefits the rest of the UK too.
While we need to narrow regional inequalities, doing down London will do little to benefit cities and towns across the rest of the UK
The capital is the UK’s shopfront to the world and a magnet for international visitors. Before the pandemic, over 1.6 million people visited both London and somewhere else in the UK every year, spending £641m annually in local economies outside of the capital. And London generates a significant surplus to the Treasury, which can help support investment in infrastructure and public services across the whole of the UK.
While we need to narrow regional inequalities, doing down London will do little to benefit cities and towns across the rest of the UK.
There was much to welcome in the prime minister’s recent speech on levelling up. He acknowledged that the capital is still scarred by significant inequalities and he recognised that we will not make poorer parts of the country richer by making London and the south east poorer.
In the coming months, the government will have a number of opportunities to put these words into action.
Levelling up: the way forward
On the economic recovery, we need to see government, the mayor, London boroughs and businesses working in partnership to support London to bounce back. While the recovery is underway, it remains slower than other regions and it faces ongoing headwinds through reduced commuting and the huge decline in international tourism.
When it comes to funding, we need to see fairness and transparency.
Recent government grant schemes including the levelling up fund and the community renewal fund have seen London de-prioritised. As we await details of the UK shared prosperity fund – which will replace EU funding for employment and skills programmes post-Brexit – we need to see a commitment that London will receive its fair share, and that funds will be devolved to local areas to drive the recovery.
While local authorities across the country have seen growing financial pressure in recent years, it is London boroughs which have seen the biggest cuts in funding. So as the government completes work on its fair funding review, we need to ensure that no local authority sees a further real terms reduction in funding in order to fund increases elsewhere.
Levelling up is a noble objective and a pressing priority as we look to recovery from the pandemic. But we must look beyond simplistic assumptions, and focus on levelling up across the whole of the UK.
Cllr Elizabeth Campbell is Leader of Royal Borough of Kensington and Chelsea and Chair of Central London Forward – 30.07.2021
This article was originally published in LGC