Beggar in underpass receiving money from passers-by

On 18 January 2023 more than 100 projects were awarded £2.1 billion from the second round of the UK government’s flagship Levelling Up Fund. This funding is intended to create jobs and boost local economies. Since this announcement there has been a media and political debate that has celebrated the funding awarded to individual projects and reviewed the overall geography of the allocation process.

Levelling up is a politics of utopia based on the assumption that political interventions can create opportunities for everyone across the UK. One problem with the levelling up agenda is that it promised too much and raised citizen and local government expectations that there was hope for a better future. The reality is that there will always be uneven development with disadvantaged places and left behind places. The challenge is to practice a politics of inclusion based on recognising the reality of uneven development.

A politics of place-based inclusion should not be about trying to pick winners. The landmark levelling up fund is a classic example of a political process based on trying to pick winners by funding projects that will change local futures creating new forms of hope. The problem is that politicians and officials have a poor track record of picking winners.

The danger is that the UK economy will continue to flatline, and hobble along, as effective levelling up requires cross-party political agreement and a new long-term approach to facilitate sustainable economic growth.

John Bryson, Professor of Enterprise & Economic Geography - Birmingham Business School

There is a prioritization challenge here in ranking local projects and deciding which ones will create the most impacts. This is complicated by another type of politics of inclusion based on trying to ensure that all regions obtain their fair share. The reality is that only projects that meet the fund’s criteria can be considered for funding, and more importantly projects must have been imagined already by local politicians with sufficient work completed to ensure that these are safe deliverable projects. Funding only low-risk projects removes many innovative, but higher risk projects from the funding process, and some of these projects could be transformational. There is an accountability issue here in that public funding must be allocated in an accountable manner and too often the outcome is that predictable low-risk projects are funded.

Allocating government funding to support projects is a highly politicised process and the outcome always represents a politics of tokenism. Each UK region, and devolved administration can publicize their winning projects. Each funded project will generate impacts and provide some employment opportunities. However, each project should be considered as a place-based token with highly localised and often exclusionary impacts.

Funding local projects intended to overcome some local problem, or to create a new local resource, does make a difference, but it does not result in a set of political shock waves that would shake up local economies, and the UK national economy, resulting in transformational and sustainable growth. We need a new type of politics in the UK with politicians having the confidence to identify and release some of the constraints that exist on job creation, entrepreneurship, and innovation. These constraints represent the wider framework conditions that support economic growth within a country. They include over-regulation, or inappropriate regulation, and politicians and a political process that does not support, celebrate, and reward innovation, enterprise, entrepreneurship. Politicians and the media should celebrate all those individuals and companies that are the risk takers and job makers.

Across UK politics there is a paradox of economic growth. On the one hand, economic growth is desired, but it needs to be the right sort of economic growth. On the other hand, there is a narrative of taxing companies and entrepreneurs, and of windfall taxes with one narrative being that job creators are avoiding their responsibilities to society. Sustainable economic growth requires a diverse economy based on encouraging individuals and firms to take risks that will result in personal reward, but will also create jobs and sustain existing jobs and support public service provision through taxation. It also requires an educational system that provides the skills required to create job takers and encourage job makers.

Politicians like time-limited projects with a capital component as these provide photo opportunities that contribute to a narrative that politicians are making a real difference. A real levelling up agenda requires major alterations to the wider framework conditions that underpin the UK economy. These alterations would be transformational, but the impacts would occur over decades and would create very few photo opportunities.

The danger is that the UK economy will continue to flatline, and hobble along, as effective levelling up requires cross-party political agreement and the implementation of a new long-term approach to facilitate sustainable economic growth. A long-term approach is critical. The UK suffers from a politics of short-termism which reflects politicians who are reacting to events, and the election cycle, rather than developing and implementing a long-term and proactive approach to encouraging, supporting and celebrating sustainable, responsible and inclusive growth.