The North needs a Social Guarantee
The Government’s ‘levelling up’ agenda is failing the North of England, which needs real transformation not empty political rhetoric. IPPR’s new State of the North report makes
three strong recommendations: build a new economy with devolution and tax raising powers; make the North the engine of net-zero transition; and provide everyone with high quality, life-long education.
The report is a sobering read. Despite two years of ‘levelling up’ pledges, inequalities have grown, promises have been broken, and the impacts of the pandemic have left lasting scars on the people of the North. Employment rates are consistently below national levels, and still falling. The quality of jobs in the North has declined significantly with around 21.5% (or 1.3 million jobs) now paying less than the real living wage. In-work poverty has risen sharply with 2 million people living in households with at least one working adult relative poverty - up 300,000 in the last decade.
Carbon emissions are considerably higher in the North than in other parts of the country. This is partly due to the
high levels of carbon intensive industry
in the region, but also to lack of sufficient infrastructure such as public transport links and homes insulation.
Children in the North achieve significantly lower grades at GSCE level and the gap in attainment between the most and least privileged children in higher than the national average. These issues have seemingly been exacerbated by the pandemic. During the first lockdown, pupils in the North spent less time on schoolwork, and, after returning to work during 20/21 school year, the higher rates of Covid in the North meant higher rates of absences. Early research on the impact of the pandemic on educational attainment suggests that it has widened existing inequalities.
Why has the ‘levelling up’ agenda, like the multiple initiatives that preceded it, failed to make any dent in regional inequalities?
Possibly the most fundamental problem is the deep-rooted centralisation of the UK, with the vast majority of funding and decision making happening far away in Westminster. The report shows that while taxes worth £194.7 billion were raised in the North in 2019/20, only £8.1 billion stayed in the region in the form of council tax. The remaining £186.6 billion was taken by Whitehall. Local authorities in the North are forced to compete with each other for handouts from central government. This has severely undermined Northern council’s abilities to fund local initiatives or to collaborate with each other to work in the best interests of the region.
Compared with earlier attempts to address regional inequalities, ‘levelling up’ is seen much more as a political strategy. It has been criticised widely for its lack of transparency and the way funds are targeted at areas that could reap electoral rewards, rather than to those most need. It has also been patchy and piecemeal, lacking any kind of coherent strategy to genuinely tackle the deep-rooted issues that determine regional inequality.
On top of all that, chronic underfunding of the region since 2010 has seen billions of pounds of cuts to local authorities, eroding jobs, public services and exacerbating inequalities within and between regions. Between 2014/15 and 2019/20, London received over £4000 more investment per head than the North. The combination of funding gaps, centralised power and a lack of strategic planning has resulted in a seemingly perpetual increase in regional inequality and a continued degradation of the life chances of people who live in the North.
Fixing the Divide
The report’s three goals, outlines below, would be well supported by adopting the Social Guarantee across the region.
Building a new economy
IPPR North have made the strong and effective case for devolution for decades. The broken, centralised model can only be fixed with a redistribution of power from central to local government. This includes tax raising powers and an ability for Northern leaders to make strategic investment decisions for their regions. In addition, the report recommends a more holistic economic model, focussing on improving living standards. This is what the Social Guarantee calls for. As well as genuine devolution, we must move away from a model that sees growth as the central aim of our political and economic systems to one that focusses on meeting people’s fundamental needs. This means ensuring that everyone has access to life’s essentials, and it also means creating jobs in transport, care, education, construction, and more. These jobs are needed at all skills levels and in every neighbourhood in the country.
The North as the leader of the net-zero transition
The report demonstrates the latent potential in the North to lead the green transition. The region already produces more than half the country’s renewable energy and has the potential to generate much more because of its natural resources, existing infrastructure and knowledge. In addition to developing many more decent jobs in renewables there’s a strong case for expanding already low-carbon sectors such as care and education. This will help to fuel an economy in which everyone has their basic needs met, has access to good quality work, and is able to live in a way which supports a thriving planet. Plans for net-zero transition need a strong social pillar and that is what the Social Guarantee offers.
The North as a leader in life-long learning
Education is an essential human need and is at the centre of the Social Guarantee. The universal provision of education in the UK is a demonstration of the effectiveness of collectively provided services. However, as this report points out, existing provision is far from perfect. IPPR North calls for devolving education powers to the lowest appropriate level, particularly when it comes to employment skills and training. The move to a net-zero economy is creating new challenges that vary across regions. Local governments should be empowered to work with local employers and with neighbouring localities to enable universal access to training and employment opportunities so that all residents have the opportunity to contribute to their local economies.
In summary, IPPR’s central message of devolution and more holistic, green economies is powerful and closely aligned with the goals of the Social Guarantee.