‘Whole country’ approach to levelling up needed

• Almost half of jobs growth since 2010 was in London and the south east, while just two per cent was in the north east 
• But 1 million people in London are in poverty due to housing costs 
• New polling for the Commission from YouGov found that 70 per cent of people in England think councils should have a ‘great deal’ or ‘fair amount’ of influence over local economies. 
• Report welcomed by Lisa Nandy as “an important contribution”.  

The UK has two major regional economy challenges – ‘low growth’ outside the south east, where places don’t have enough good jobs; and ‘overheating’ in the capital, where housing costs are too high – concludes the report of the Fabian Society’s Commission on Poverty and Regional Inequality.   

The commission proposes a major programme of reforms to tackle both issues together. The government should implement ‘London-style’ regulated buses across all of England, put councils in charge of childcare, devolve jobcentres, build new homes on greenbelt land and devolve significant economic powers to mayors and councils, the commission argues. 

The report finds the ‘low growth’ problem outside London and the south east is severe and regional inequality in disposable income is getting worse. Disposable income per capita has grown at half the rate in Sheffield, the Isle of Wight, East Sussex and the Wirral, compared to Lambeth, Hackney and Newham, and Brent. Regional inequalities in productivity and disposable income in other countries are all smaller and in some cases are in decline.  

The commission found that almost half (46 per cent) of England’s jobs growth since 2010 was in London and the south east (home to 32 per cent of England’s population). Just two per cent was in the north east (home to five per cent of England’s population). This is despite talk of ‘levelling up’ since 2019, and a political focus on the ‘Northern Powerhouse’ since 2014. 

But ‘overheating’ is a regional economy problem too, the report finds. London is the third worst region for working-age poverty, and has huge gender and ethnicity inequalities. A million Londoners are in poverty as a result of housing costs. 

The commission argues that too many people are forced to choose: live in a low-growth area where prospects are poor or try to move to an overheating area where living costs are high. 

The Commission took evidence from across England, working with people on low incomes throughout. Their mission was to create a shared agenda to reduce poverty and raise living standards in all parts of England. 

Centralisation 

The commission finds that:  

• The UK is the most centralised of all developed nations, with local councils underfunded from central government, and unable to raise their own funds.  
• Only 5p in every £1 is raised by local government. In Germany this is 31p and in France 13p.  
• The UK’s local or regional economic spending rate is half as high as in Germany and France. 

Transport 

 The commission finds that: 

• More people use bus services to get to work than all other public transport methods combined, and they account for twice as many journeys as trains.  
• Annual bus mileage outside London has fallen by a quarter since 2009/10.  
• Since 2010, bus fares have risen 3 per cent above inflation in London, but 8 per cent in English metropolitan areas, and 18 per cent in English non-metropolitan areas. 
• Polling for the Commission found 33 per cent of people in England thought that local authorities should run their own bus services, and 30 per cent of people in England thought that they should be run by local authorities regulating the services and private sector companies operating them (ie the London franchising model, now also being implemented in Greater Manchester).  

Jobs 

The commission finds that: 

• Jobcentres aren’t working for many who need them. They are focused on policing behaviour, unresponsive to local labour market needs, cut off from complementary local services, and push people into often inappropriate jobs, that they then fall out of.  
• Polling for the Commission found that 74 per cent of people in England support a ‘job guarantee’ scheme, described as: ‘a new government programme using public funds to create and provide jobs for people who have been unemployed and looking for work for more than six months’.  

Recommendations 

The commission recommends 13 practical but substantial policies, that will improve living standards in all regions of England. These include: 

Devolve economic powers to mayors and councils 

The commission recommends:  

• New legislation to set aside an England-wide devolved economic development fund, for transport, skills, innovation and housing.  
• By 2035, most economic development money and delivery should be devolved, leaving Westminster to set broad policies, pass legislation and ensure universal rights are guaranteed. 

Bring buses under public control  

The commission recommends: 

• New legislation to make bus regulation the law across England. 
• Allow local areas to set up and run their own bus companies. 

Devolve jobcentre employment support to councils and mayoral combined authorities 

The commission recommends: 

• Some employment support should be co-commissioned with local councils and mayors between 2025 and 2030, ahead of full devolution of jobcentres by 2035. 
• A new ‘CQC-style’ national regulator to oversee a new, more supportive and less punitive approach. 

Other recommendations: 

The commission recommends: 

• Build homes on well-connected Green Belt, alongside other under underutilised land 
• Put councils in charge of childcare  

Commenting on the report 

Nick Forbes, chair of the Commission on Poverty and Regional Inequality said: 

“Centralised decision-making holds us all back, from Newcastle to Newham. Now, all of England’s regions must come together to tackle our regional inequalities. 

“Poverty is inexcusable, wherever in the country it is entrenched. We cannot shrug off low regional economic growth, like that of the north east, as inevitable. And nor can we allow high regional growth to have such consequences for our poorest, as it does in London. 

“The situation is urgent, and this is a time for practical action, not grandiose rhetoric. Local leaders need real spending power, to inject new life into low growth regions, and to tackle high housing costs in overheating regions.”

Luke Raikes, Research Director at the Fabian Society said: 

“Our analysis finds huge potential is being wasted across the country. Thriving ‘new economy’ jobs are being created in places civil servants have written off, from South Yorkshire, to Stoke and Cornwall. Whitehall is failing to nurture these strengths, and is seized-up, firefighting crisis after crisis.  

“We can improve living standards in all regions by giving places the agency to do things for themselves. We should put mayors and councils in charge of buses, jobcentres and childcare, and build new communities on well-connected green belt as a start.”

Lisa Nandy MP, Shadow Levelling Up Secretary, said:  

“The flagship ‘levelling up’ agenda on which the Conservatives were elected is going backwards and regional inequality is getting worse. But things can be better, if we stop writing off most people in most parts of Britain. 

“People are proud of the places they call home and the contribution they made to building our country. What they need is a government that shares the huge ambition they have for themselves, their families, their communities and their country.  

“Labour will be that government, and this report is an important contribution to the debate that we will consider as we prepare our plans to create good, secure jobs in every part of the UK and to undertake the biggest transfer of power out of Westminster in modern British history.”

Tracy Brabin, Mayor of West Yorkshire, said:  

“I welcome this report as an important contribution to the discussion about how to decentralise power and rebalance our economy. 

“Devolution is working for West Yorkshire, delivering a stronger, more inclusive economy where everyone can reach their full potential. 

“We’re improving bus services, creating well-paid jobs, and ensuing people can access the skills and training they need to succeed. 

“But we are fighting entrenched regional inequalities that have spanned generations, and too many people remain locked in poverty across the county. Government’s levelling up policies have failed to match their rhetoric.  

“With more powers and funding, we could achieve so much more and meet our ambitions for a brighter region that works for all.”

Luke Raikes and Ben Cooper are available for interviews and op-eds. 

– Ends – 

Notes  

1. Contact: Emma Burnell, Media Consultant, Fabian Society emma.burnell@fabians.org.uk or 07851 941111.  
2. The report is published on our website at https://fabians.org.uk/publication/a-good-life-in-all-regions.
3. A Good Life in All Regions is published by the Fabian Society. It was edited by Kate Murray.  
4. This is the final report of the Fabian Society Commission on Poverty and Regional Inequality. The Commission was chaired by former Newcastle Council leader Nick Forbes. It was supported at the Fabian Society by Ben Cooper and Luke Raikes. 
5. Other commissioners were: Anela Anwar, Stef Benstead, Gary Ellis, Anand Menon, Nick Phillips, Andrés Rodriguez Pose, Liz Sayce, Katie Schmuecker and Rev. Andrew Yates. 
6. The Commission was kindly supported by The Joseph Rowntree Foundation, the City of London, Trust for London and the Dartmouth Street Trust. 
7. The opinion survey was conducted by YouGov on behalf of the Fabian Society. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,087 adults. Fieldwork was undertaken between 11th–12th May 2023. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+). The full survey results can be found here.  
8. The Fabian Society is Britain’s oldest political think tank. Founded in 1884, the society is at the forefront of developing political ideas and public policy on the left. The society is alone among think tanks in being a democratically-constituted membership organisation, with around 7,000 members. It is constitutionally affiliated to the Labour party.