It seems that the mystery of what ‘levelling up’ means is about to be revealed – and it turns out that it will amount to more government, more public spending and, that perennial local government favourite, regenerating town centres.
This week’s white paper looks set to ignore the decades of evidence that throwing government money around is what has got many places in a mess in the first place. We have a taster with today’s announcement of today’s announcement of £120 million to deliver 7,800 new homes on brownfield sites – though what’s really striking is the sheer number of different Funds tasked with doling out Whitehall cash to the regions.
The readiness to splash taxpayers’ cash is strikingly at odds with years of National Audit Office reports showing that spending public money on trying to stimulate economic growth does not work. In 2019 the Public Accounts Committee investigated the spending of Local Enterprise Partnerships and found that ‘despite spending up to £12 billion of taxpayers’ money, the Department has no real understanding of the impact which the Local Growth Fund has had on local economic growth’.
The Chancellor’s Budget announcement of the first set of winning bidders for the £4.8 billion Levelling Up Fund gave a pretty clear hint of what levelling up is going to mean.
A large number of the winning bids are to fund the regeneration of town centres, which we now hear is going to be a central theme of the white paper. This reflects the longstanding belief of council officers and local politicians that they can buck the retail and employment market. They sincerely believe that a nice shiny publicly funded building and a new one-way system is enough to stimulate the local economy and transform their declining shopping centres.
So, to no one’s surprise, as soon as the Levelling Up Fund was announced, councils wheeled out the vanity projects that they have been desperate to fund for years – new theatres, leisure centres and business parks all feature heavily. The sad truth is that almost all of these will end up as white elephants, and maintaining them will become a permanent drain on council resources.
The project to refurbish Kidderminster Town Hall is typical. It may well be a splendid building, but will £8 million of taxpayers’ money to turn it into a ‘cultural space and events venue’ really make much a difference to the quality of life of local people? The trouble is that local councils have a terrible track record of running events venues. Too often they lack the skills and marketing ability, so usually the town ends up with a heavily subsidised venue putting on obscure performances that few will pay to see.
In Gainsborough they have secured £10m for a new four-screen cinema and work to improve the marketplace where ‘people can enjoy outdoor dining, visit our traditional twice weekly street market and meet with friends and family’. Local government officers really love markets, fed by a great nostalgia for the days before supermarkets when we all had time to visit the baker, butcher and greengrocer. Unfortunately most markets these days are less bucolic fantasy and more purveyors of cheap tat and overpriced artisan bread. More to the point, the emphasis with this kind of spending seems overwhelmingly cosmetic – sprucing up the town centre, rather than doing anything to genuinely revitalise the local economy.
Other councils, however, have been more ambitious. The London Borough of Newham has secured £40 million to upend capitalism and prioritise ‘personal wellbeing and happiness’ instead of traditional measures of economic success. They will use £19m of that money to develop ’15-minute neighbourhoods’ where residents can access all their ‘social, cultural, civic, and economic essentials’ in a 15 minute walk from their homes.
The council have produced a magnificent 200-page report full of local government speak about how they will achieve this. Inevitably, it involves supporting local markets and businesses the council approves of such as bicycle workshops. They also plan to provide incentives to local shops and restaurants to stay open after 6pm, as the council see these businesses as a form of social service rather than money-making ventures.
Anyone who has ever been a councillor knows what happens when Whitehall allocates this money. No one ever does a rigorous analysis of whether the project really did anything for the local economy and the inevitable National Audit Office report a few years later will simply lament another waste of taxpayers’ cash.
No doubt the white paper will argue that this time it will be different because it will be ‘locally driven’. There is a romantic view that, if only they were given the power, dedicated local politicians and officials can develop highly effective policies, precisely configured to meet the economic needs of their local area.
The truth, however, is that local government is no better at picking winners than central government. All too often, parochialism and pettiness prevail, while local bigwigs are seduced by the opportunities for grandstanding. Last year’s infamous Handforth Parish Council meeting was a window on to the kind of childish sniping and delusions of grandeur that so often beset local politics.
What’s more, the existing approach to devolution has too often meant more government rather than better government. In some parts of England, you can now be subject to five tiers of local government – parish, borough, district, county, and combined authority. The Government’s proposals to let areas add a directly elected mayor risk simply adding another layer to the existing bureaucracy.
A really radical white paper would look instead at how government could get out of the way of entrepreneurs, make it easier to employ people and reduce onerous regulations – then stand back and see what business can make happen. Ultimately, the way to achieve sustainable economic growth is to let loose the private sector, not throw money at shiny cinemas and spruced up town halls.
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