The policy challenge: why is it difficult to transform ‘left behind’ neighbourhoods?

The state of the levelling up agenda

In policy terms, levelling up is closely associated with the Conservative Party’s 2019 General Election manifesto and campaign. It is the government’s response to the geographic disparities that have become such a pronounced and prolonged feature of the UK economy – in terms of economic productivity, opportunities, public services, investment, social mobility and public wellbeing. It also speaks to the widespread, though more intangible, sense of civic disempowerment and institutional detachment that has become ever more prevalent in media and political debates.

The 2022 Levelling Up White Paper began to set out the government’s plans for policies to achieve a fairer economy and more equal United Kingdom, where people are empowered to reach their potential no matter where they live.

Given the scale and complexity of the challenges involved, it is unsurprising that the White Paper outlines what amounts to an entire domestic policy programme. This is focused around twelve ambitious policy ‘missions’, with goals that range from gains in healthy life expectancy to enhanced public safety, strengthened local government, improved housing conditions, and more.

What is included in the Levelling Up the United Kingdom White Paper?

The nature of the problems facing our most deprived neighbourhoods is so great that they really do need a mission orientated approach to tackle them. This requires a joined- up approach across the different parts of government and incentives to maximise the involvement of the private sector.
Professor Peter Tyler, University of Cambridge, oral evidence to inquiry session two

Since the White Paper was published, the UK has faced intense political and economic turbulence, triggered by events at home and abroad. Shifting national leadership has meant disruption to the policy agenda, and even its brief re-positioning around different priorities.

While the White Paper’s policy programme has progressed in some areas, such as agreeing new devolution deals and planning enhanced powers for existing Combined Authorities, there have also been controversies about how well levelling up funding has been targeted. Investments agreed under the flagship Levelling Up Fund have generated accusations of time-wasting and poor decision-making, raising questions about Whitehall’s ability to ensure resources are deployed to the areas that will derive the greatest benefit from them and which have the most ground to make up (Ward, 2023).

The agenda has also been unfavourably compared with other countries’ efforts to rebalance their regional economies: many have argued that significantly more investment, by an order of magnitude, would be required to make genuine progress toward the government’s self- defined goals in many places. The Centre for Cities compared the task of reducing the economic gap between the UK’s most and least prosperous regions to that faced by the German government since reunification in the 1990s. This cost €2 trillion, or £71 billion per year for 24 years, compared to the £4.8 billion in the entire Levelling Up Fund (Enenkel, 2021).

Can the current levelling up agenda help ‘left behind’ neighbourhoods?

As the flagship document which sets out how government “will spread opportunity more equally across the UK”, the Levelling Up White Paper provided a natural starting point for the APPG’s inquiry. Our findings force the conclusion that the White Paper, though ambitious in its scope and objectives, is constrained by the same biases and cultural norms that limit Whitehall’s ability to reach and serve the interests of ‘left behind’ neighbourhoods through its policies and funding (Kaye, 2022).

Below, we explore three important barriers to the success of the levelling up agenda in its current form in meeting the needs of ‘left behind’ areas.

Barrier 1

The failure to consider important sources of disadvantage that are either specific to ‘left behind’ neighbourhoods or have specific impacts there

Important aspects of the drivers of place-based inequalities in the UK do not fit easily into the White Paper’s six capitals. This matters, because the depth and multi-faceted nature of deprivation in ‘left behind’ neighbourhoods often means that one set of barriers must be addressed before policy initiatives can even begin to tackle another. For example, written evidence submitted to the inquiry by the University of Plymouth notes that while the

White Paper’s mission on levelling up pay and employment recognises the importance of digital connectivity in making progress, it does not set out plans to improve digital inclusion – affordable access to the equipment, skills, and data necessary to ensure equal access to and use of digital connectivity. With 36 per cent of the UK workforce lacking essential digital skills for work, it will be crucial to embed digital inclusion into policy interventions aiming to improve pay and employment opportunities in ‘left behind’ places (University of Plymouth, 2023).

Similarly, the failure to account for natural capital in the White Paper is striking given that ‘left behind’ neighbourhoods perform poorly, relative to other equally deprived areas on all key measures relating to green space (Gore et al., 2022).‘Left behind’ neighbourhoods have a lower density of green assets (272.9 compared with 366.1 within a 1km radius), a lower number of parks and gardens, and lower density of recreational green space (5.8 per cent compared with 8.7 per cent), all of which play important roles in local health, wellbeing, and pride in place (APPG for ‘left behind’ neighbourhoods, 2022e). Policy initiatives targeting these outcomes may fall flat if action is not first taken to address ‘left behind’ neighbourhoods’ lack of accessible green spaces, since policy initiatives may rely on such ‘basics’ being in place.

Barrier 2

The absence of sufficient collaboration with people living in ‘left behind’ neighbourhoods whose experiences and perspectives will be necessary to develop the right policy and funding models

The government’s approach to developing policy to transform the fortunes of ‘left behind’ neighbourhoods has not been sufficiently informed by the experiences and perspectives of people living in them. This could lead to undesirable outcomes or ‘backfire’, particularly in the most economically disadvantaged areas where community need is at its highest.

For levelling up to work, the needs and aspirations of local residents – and the perspectives and participation of communities – must be placed at the heart of the agenda.

Indeed, levelling up in its current form may already be leading to unintended consequences, as centrally-designed policy makes contact with the complex reality of life in ‘left behind’ neighbourhoods. Rather than maximising the chances for these neighbourhoods to ‘close the gap’ with the rest of the country, the levelling up agenda in its current form risks:

Overlooking, undermining, or side-lining the existing assets and solutions that are already present or nascent within ‘left behind’ neighbourhoods
Generating unhelpful competition or conflict between different places or groups which might otherwise find common cause to collaborate
Biasing the distribution of resources to places and communities with access to formal bid-writing skills, generating significant wasted effort on the part of people who are already time- and resource-poor
Deploying resources in an uneven and unpredictable way, with a general bias towards neighbourhoods within established or newly-created Combined Authorities
Being subject to political or bureaucratic interference or inconsistency
Being insufficient or unsustainable in terms of the magnitude of investment, to meet the long-term needs of ‘left behind’ neighbourhoods
Operating at a scale of policy and implementation that does not align with the hyper- local needs of ‘left behind’

Barrier 3

A basic lack of sufficiently granular data to guide policy funding decisions and to ensure levelling up reaches the ‘left behind’ communities it is supposed to prioritise

The levelling up agenda has been held back by a lack of data at ward level, or often at any level below local authorities. As a result, the current metrics attached to levelling up may not address the particular challenges faced by ‘left behind’ neighbourhoods. This may incentivise local authorities with ‘left behind’ neighbourhoods to invest in other parts of their boroughs with greater existing assets and social infrastructure to meet a given target for central government funding, representing ‘low hanging fruit’ in terms of delivering improvements against set metrics.

The next section reveals the very real, direct costs of these gaps in the current approach to levelling up in fulfilling the government’s policy aims and meeting the needs of ‘left behind’ neighbourhoods: which appear in many cases to be missing out on funding that should prioritise them.

Across the levelling up focus areas, a key challenge is the scarcity of data at the local level. Indeed, many of the indicators in the Levelling Up White Paper are not disaggregated to local neighbourhood levels. This poses an ongoing issue for places in understanding what is happening.
City-REDI, University of Birmingham, written evidence submission to the inquiry

Is levelling up reaching ‘left behind’ neighbourhoods?

Most data on how central government allocates funding is only available at specific scales at or below the local authority level. It is not available at the smaller-scale ward level (which maps more closely onto local neighbourhoods). This means it is difficult to know for sure whether money is reaching people in ‘left behind’ places.

Funding directed to traditional infrastructure and economic development projects may not reach people living in ‘left behind’ neighbourhoods (for example, because poor transport connections or existing qualification levels limit residents’ access to new jobs or training opportunities). Some local authorities that include ‘left behind’ neighbourhoods have missed out entirely on levelling up funds, while others that are attracting funds may be channelling this money into more affluent wards at the expense of those identified as ‘left behind’.

“Levelling up is not about a part of the country. It’s about parts of neighbourhoods, of towns, of areas.”

_{Trisha Bennett, Community Development Co-ordinator, Whitley Big Local, oral evidence to inquiry session one}

OCSI research for the APPG shows that households in local authorities that include ‘left behind’ neighbourhoods received lower levels of ‘core’ government funding per household than deprived areas that don’t; and less even than the average English authority (£2123.70, £2162.11 and £2129.65 respectively) (OCSI, 2023). Funds specifically dedicated to levelling up are expected to correct this imbalance, but recent research suggests this has not necessarily been the case. Initial analysis of the UK Shared Prosperity Fund suggests it has not been successfully channelled into ‘left behind’ neighbourhoods so far, despite an allocation approach intended to skew funds toward places with higher levels of need. For example, Tendring and Thanet – local authorities containing multiple ‘left behind’ neighbourhoods – both received relatively low allocations (less than £1.2m) (APPG for ‘left behind’ neighbourhoods, 2022f).

Complicating the picture further is the fact that over 400 bodies received levelling up funding, including over 350 local authorities, 21 county councils, 12 Combined Authorities, 27 Local Economic Partnerships, 11 Freeports and 22 other forms of partnership/body (Atherton et al., 2023). This makes it even harder to track the flow of funding and investment to the level of ‘left behind’ neighbourhoods. The profusion of bodies receiving levelling up funds also distorts the geographic distribution of funding, as not all tiers exist everywhere. Combined Authorities received 20 per cent of the funds on top of those allocated to more local tiers – but only 41 per cent of England’s population lives in an area covered by a Combined Authority, giving these areas a better chance of funding than others.

The Centre for Inequality and Levelling Up recently analysed 12 funding streams associated with levelling up since 2019, worth a total of £13.26 billion. This distributional analysis confirms that funding has continued to prioritise those regions and local authority areas with high levels of deprivation, but notes that “such generalisations can also mask the fact that funding is spread nationally and the focus on deprived areas is a loose one” (Atherton et al., 2023, p. 17). Despite the data limitations noted above, this analysis suggests that levelling up funds may follow a similar pattern to core government funding: one that rightly benefits deprived local authorities, but underfunds the most ‘left behind’ ones.

Government should consider alternative funding approaches capable of creating the conditions for genuine impact in ‘left behind’ neighbourhoods and other deprived places. Research from the University of Cambridge sets out how longer- term and predictable funding over at least ten years correlates with more successful economic regeneration schemes (Local Trust, 2019). Studies also identify strong community engagement – from conception to design, through to delivery – as crucial for success. Involving communities in the policy design process in this way depends upon the presence of a functional local framework of support and guidance, which is not always in place in ‘left behind’ neighbourhoods (Local Trust, 2021).

Creating a process that ensures community perspectives and priorities are at the forefront of the decisions public bodies ultimately make is in itself a challenge. Local Trust’s Big Local programme provides a possible model, supporting local residents to build a steering group to decide how to deploy funds within their neighbourhood, according to the priorities in their local plan. Facilitating community voices without overriding them is a crucial component of the Big Local scheme’s success (South et al., 2021).

“Dover Big Local has acted as a seed bed and facilitator for an innovative product, whilst at the same time, creating partnerships between charities, local industry, local and area government, commerce, and the voluntary sector, to carry on the newly established organisations. Although we may see social problems on a weekly basis, we can act quickly to prioritise and use our financial resources effectively to try to level up our ‘left behind’ community and place a focus, where we know from experience, it’ll have the most impact in order to achieve this goal.”

_{John Angell, Dover Big Local, oral evidence to inquiry session two}

Previous chapter Next chapter