The comment is the latest confirmation that the Tories' levelling up agenda is failing.

‘Levelling up’ was Boris Johnson’s flagship project. But the much-hyped plan to tackle geographical inequality and the gaping north-south divide has never come close to being fulfilled. Despite the rhetoric and promises, the UK is home to vast areas of poverty and disastrously low productivity, which is among the worse in Europe, and which deeply contrasts to areas of wealth and efficiency, mainly in London. 

In July 2022, when the Conservatives were embroiled in a bitter battle of party leadership, Labour said the Tories’ promise to ’level up’ parts of the UK had ground to a halt, as councils were still unable to apply for funding six weeks after the application website was supposed to go live.

“Communities across the country have prepared bids to access millions in funding to regenerate services such as local libraries, theatres, arts centres and parks but the Conservative Party leadership contest means government has ground to a halt. If only they put the same effort into levelling up as they put into trying to advance their own careers,” said Lisa Nandy, the then shadow levelling up secretary.

18 months later and nothing has improved.

Brexit and levelling up

This month, a newly released report brought more bad news for the beleaguered levelling up agenda, confirming that the huge economic gulf between the capital and the rest of the economy will get even wider. The research into Brexit’s impact on the UK economy by Cambridge Econometrics, commissioned by the Greater London Authority and Sadiq Khan, shows that London will be affected less by Brexit than almost all of the rest of the country. The report found that growth across the UK will be 0.4 percent slower each year because of Brexit but only 0.3 percent slower in London. It finds that by 2035, the UK will have 3 million fewer jobs than it would have had if we had stayed in the EU, but only 500,000 of those lost jobs will be in the capital. Meanwhile, productivity will stay as expected and will not be hit by Brexit, but in other Red Wall regions it will fail to keep up, widening the gap by more than 4 percent.

The economic damage highlighted in the report will last until 2035, at least. By then the nation’s level of investment, employment figures, economic output, and the level of productivity, will all still be significantly lower, than if the UK had remained in the EU.

This week, a leading official in the government’s own levelling up department admitted that the speed of delivering levelling up projects has ‘not matched the expectations of the department.’

On January 15, the Public Accounts Committee (PAC) heard that the first round of the £4.8bn Levelling Up Fund had been extended to March 2025. The funds were originally due to be spent by March 31, 2024. Round two of the Levelling Up Fund has also been extended by a year, from March 2025 to March 2026.

Sarah Healey, permanent secretary at the Department for Levelling Up, Housing and Communities (DLUHC), informed how the department has spent a third of the £10.6bn allocated to levelling up across three funding streams. A further £1.5bn in funding has been allocated since March 2023, which consists of £274 million across the Levelling Up Fund, £566 million across the Shared Prosperity Fund and £803 million across the Towns Fund.

The PAC was told how delays to projects had been caused by construction inflation, which Healey noted had been at 10 percent at one stage, as well as supply chain delays, site condition issues and issues with utility provision not being able to be secured quickly enough. Healey stated that these factors “changed assumptions local authorities had to make about what they could do with money in front of them.”

Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward

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