A report out today has found that COVID-19 has increased the urgency for a comprehensive, large scale plan to level the UK economy.
In a follow up report to Make No Little Plans – Acting At Scale For A Fairer And Stronger Future – which found that the UK is the most unequal large country in the developed world – the UK2070 Commission has now found that the pandemic has exposed the UK’s economic dependency on London and the Wider South East. Only a balanced growth plan is likely to deliver greater prosperity without damaging environmental and social consequences.
The UK2070 Commission has prepared a post-COVID Action Plan setting out the priorities for action over the next ten years. Learning the lessons from the COVID-19 response, it proposes a major programme of investment in transport, skills and the advanced economy; coupled with a radical devolution of powers; and funding from Whitehall.
The UK2070 Commission found that COVID-19 has reinforced existing patterns of inequality in terms of wealth, ethnicity and gender, with its impacts being exacerbated by an over-centralised political system and economic dependency on London’s growth. Our research finds that COVID-19 will take at least 5 years to return the UK economy back to where it was – indeed, if there is sustained low economic growth there will be a continued regional recession outside Greater London and the Wider South East of England.
The current COVID-recovery programmes are short term and not sufficient to deliver the change required. A dynamic recovery requires higher levels of growth, strong regional development policies and national targets for ‘levelling up’ the most disadvantaged communities in terms of access to good job opportunities and standards of basic services (e.g. medical).
The rhetoric of ‘levelling up’ must be translated into a £375bn 25-year New Deal strategy for a ‘just recovery’ to offset the £4bn per year gap in research and development investment, through creating at least four global centres of science and technology outside the UK’s ‘golden triangle’. and the £20bn per year cost of poor local connectivity, through major investment in transit systems in all major towns – and around 1000 miles of new, upgraded and electrified main railway lines and services to remoter communities.
The UK is the most centralised major developed economy, and this inhibits national economic growth. A real transfer of fiscal power to local and devolved governments is urgently required to allow recovery.
“Our new post-COVID Action Plan sets out a proposed programme of action which unlocks capacity and delivers action at scale through local democratic leadership. We are calling on the Government to Go Big – Go Local.” says the Committee Chair Lord Kerslake
“We’re saying what is missing is a clear plan setting out the scale and form of levelling up, the actions required to deliver it, and measures and milestones to success.”
“COVID-19 may have changed the path to delivery of levelling up, but not its urgency and importance. The temptation of the government will be to rein in their ambitions and spending. This would be a serious error. To have any meaningful impact, what is needed now is a New Deal for ‘levelling up’.”
Mike Hawking, Policy and Partnerships Manager at the independent Joseph Rowntree Foundation (JRF), said:
“This government was elected on a promise to level up parts of the country that have been locked out of prosperity for too long. As the pandemic evolves from a health crisis to an economic one, many of those same areas are now being hit hardest.
“Having committed to a Jobs Support Scheme, government must now focus on creating more good jobs across the country. Additional support for the people and places that need it most must be the focus of the promised UK Shared Prosperity Fund. And the Affordable Homes Programme should be ramped up to deliver thousands more homes for social rent per year.
“We are facing the second deep recession in a decade. If the government truly wants to build back better, our economic recovery and levelling up must go hand in hand.”
