Levelling up for Whom?

A recent HEPI report, written by Sarah Chaytor, Grace Gottlieb and Graeme Reid, all from UCL, considered aspects of levelling up and regional policy. Amongst their conclusions was that, despite what other commentators have said, the UK is not particularly regionally concentrated in its research funding, and that what is meant by research concentration isn’t even particularly well-defined. Despite the authors disclaimer

‘This report is not a surreptitious attempt to get a better deal for Bloomsbury at the expense of the rest of the country’,

it was nevertheless hard not to feel that they were choosing their analysis in order to demonstrate that London was not unfairly advantaged. This suspicion was highlighted by what appeared at the very least to be confusion when it came to some of their figures. Were they talking about all research funding, public, charity and private, or were they simply talking about public funding? Kieron Flanagan first highlighted this confusion over Twitter, and it was stressed again by Andy Westwood in his response, on the HEPI blog. Clearly which is being discussed makes a significant difference.

If one turns to an earlier report from last summer on regional R+D funding imbalances by Tom Forth and Richard Jones (both Manchester based), The Missing Four Billion, they make a very clear distinction between public and private funding. Looking explicitly at the relative amounts of public (government, university and charity) and private research funding per head of population in NUTS1 regions, London – including Bloomsbury – is seen to be an outlier, with less business income than the West or East Midlands for instance, but around three times as much public funding as those regions. The East of England, including my home city of Cambridge, is an outlier in the other direction, with far more private research income than any other region (about twice as much as either area of the Midlands, nearly three times as much as London), but only about half the public income of London.

However, as Reid et al make plain, granularity matters. The East of England’s figures will be dominated by the Cambridge economy, with so many tech and life science companies thriving on the various science parks, and the recent arrival of Astra Zeneca from the North West. That single move will, as Tom Forth has further analysed, have led to a significant shift in the total private funding from the North West, where the company was historically based, to the East of England. Cambridge is, in terms of business research funding, thriving.

But for the people who live here, does it feel like that? No analysis would suggest the region needs to be levelled up, if the gross research income figures are considered, and yet there are extensive problems in the East of England. The reality is that the overheated Cambridge economy, the soaring house prices, mean that for many people life in the city is an impossible dream. It is, according to the Centre for Cities, the most unequal city in the UK as judged by the Gini Coefficient based on individual incomes. Having attended a webinar organised by the Bennett Institute for Public Policy during this spring’s University Cambridge Festival, I was struck, indeed horrified, by some of the stories told with respect to this inequality. As was said there are two very different worlds, which may barely overlap:

“the knowledge intensive businesses attracting global talent, and those who found it difficult to afford the bus fare into town.”

That is just the city, of course. To look at the wider region covered by the NUTS1 classification, reaching out into the agriculturally-dominated fens and beyond to the impoverished coastal towns, there isn’t even a thriving economy or plentiful jobs of any description. These are left-behind regions, whatever the gross R+D figures for the East of England might suggest. The reach of the economic success within Cambridge and its University do not extend significantly towards Wisbech, let alone Kings Lynn. How could the University do more? In fact, their sights are set on the Oxford-Cambridge Arc  which barely reaches east into the fens. In terms of pure productivity and growth, this no doubt makes sense. As the Government website put it earlier this year, it is

“An ambitious plan to unleash the economic and cultural potential of the Oxford-Cambridge Arc, to transform it into one of the world’s premier growth corridors and a world-leader in sustainability.”

Towns and cities like Kettering, Corby, Peterborough and Northampton certainly could benefit from major investment if this corridor goes ahead as proposed. But to the east of the city, the benefit may be very limited indeed.

From this single perspective I am left pondering is it ‘better’ to look westwards from the city to our friendly rivals in Oxford, or east towards the coast? How should one determine better? Just like my last blogpost with its hesitation about what excellence means, better is a word that sounds so promising but without qualification – better for whom, for how many, better in economic or social terms – it is hard to know where I might opt to put my money, were I in the position to put money anywhere. A recent article by Michael Kenny and Thomas Kelsey from the Bennett Institute highlights this conundrum about what better might mean if Johnson’s government pursues their levelling up agenda without any additional clarification. Kenny and Kelsey show that R+D income, introducing a new anchor industry or building improved large-scale infrastructure such as roads may be of far less interest to many living in disadvantaged areas than much smaller scale projects such as sports and leisure facilities and centres for young people. Such items may deliver better political capital from the electorate than economic growth for the region or the country. These are not the sort of thing that the promised £22bn funding for R+D is going to deliver, and perhaps are too small-scale to feature largely in the so-far ill-defined UK Shared Prosperity Fund (which replaces EU Structural Funds), but perhaps would be better able to deliver a country that felt less divided between the haves and have-nots.

Levelling up needs definition. What are we trying to level up – infrastructure, jobs, R+D or community life? Different funds for different purposes. But we should not let politicians get away with such glib phrases without qualifications nor muddle up different pots of money.