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Levelling up: why a tailored approach works best

Author: ICAEW Insights

Published: 01 Feb 2022

A new report from CIPFA shows that, when it comes to addressing regional inequalities, there is no one-size-fits-all solution.

On the day that Michael Gove, Secretary of State for Levelling Up, Housing and Communities, unveils the government’s long-awaited and highly-anticipated levelling up White Paper, new research published by CIPFA warns that tailored, regional approaches – as opposed to a national and centralised strategy – will be needed to best address regional inequalities.

The CIPFA report, Investing in regional equality – lessons from four cities, finds policies designed to address regional inequalities are most effective when they are tailored to individual communities’ needs, as opposed to a national and centralised approach.

The research, carried out in conjunction with the University of Birmingham, finds that if governments want to reduce inequalities between regions, investment should be diverse and focused on a blend of economic, cultural, business and spatial development. The most successful city-regions are empowered to deliver their own levelling-up policies, it warns.

The report analysed case studies around the world: in Fukuoka in Japan, Cleveland in the US, Nantes in France and Leipzig in Germany. All four cities studied recognised that a long-term outlook was needed, backed with significant levels of sustained funding.

In the case of Cleveland’s flagship city project, there is a 20-30 year strategy to build community wealth and a more inclusive economy. The importance of expert local knowledge was also evident in Nantes, the report says, which was able to build on its traditional manufacturing strengths and skills in shipbuilding to transition to high-end specialist cruise ship construction as well as aerospace manufacture.

Governments should focus on local economies, effectiveness of policies, efficiency of delivery and equality for citizens, which will help maximise value when addressing inequality with limited public funds, the report adds.

Rob Whiteman, CIPFA CEO, said the report highlighted there is no quick fix to addressing inequality. “The answers are complex, but what is clear is that a long-term approach is needed, coupled with sustained levels of funding. A clearly defined strategy and vision, specific to local issues, are also essential in helping level up communities.

Whiteman added: “The international examples in this report serve as an excellent blueprint for producing innovative, targeted and effective policies – which the UK government can and should apply to its levelling up agenda.”

Jeffrey Matsu, CIPFA Chief Economist and report co-author, said bearing mind there will always be inequities in society, the role of government policies should be to support opportunities that place less reliance on where you live or who you know: “While there is no one-size-fits-all approach to reducing inequality, the research shows that access to a quality education, timely workforce development programmes and stable and well-paying jobs are the keys to a better quality of life that can benefit entire communities.”

“Whatever the government’s imminent strategy is to level up the UK, the hard truth is that the ties that have bound us economically since the industrial revolution have also led to a remarkable persistence of inequality. The ‘way out’ will be unwinding the old habits of centralisation and short-termism that pervade much of public policy today.”

Matsu said embracing place-based values and innovation that build on a city’s unique history would be as important as adequate and responsive funding. “Above all, designing clearly defined objectives that can be monitored and evaluated in a transparent way will help to recalibrate policies when they go off course. This in itself can restore the erosion of faith and trust in government.”

Last weekend the government announced that Wolverhampton and Sheffield would be the first of 20 areas selected to benefit from what the government described as a “radical new regeneration programme” to breathe fresh life into disadvantaged communities.

Read our interview with Justine Greening, former government minister and chartered accountant, on the pivotal role of accountants in shaping the levelling up agenda.

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