Experts call for significant changes in order to ‘level up’ the country

Written by: Joe Stafford

The Government needs to decentralise the UK’s decision-making structures and invest in skills if it is to achieve its ‘levelling up’ ambitions, according to a new publication from The University of Manchester.

The UK has huge regional disparities in productivity - while London and much of the south-east compare well with other places in Europe, Greater Manchester and many other regions lag far behind. In 2016, Greater Manchester’s productivity was 89% of the UK average, falling from 92.2% in 1998. 

“The promise to level up the UK was one of the flagship pledges made in the 2019 Conservative manifesto,” says Gemma Tetlow, Chief Economist at the Institute for Government, in the foreword of On Productivity. “This pledge tapped into a longstanding sore in British society – the stubborn gap in economic performance and many other measures of prosperity between different parts of the UK.”

As the chapters in this report demonstrate, addressing gaps in productivity across the country is likely to entail a wide variety of policy levers – from policies to boost skills and health to changes to governance structures. It will also require central government working constructively with subnational governments and the private sector. 

Gemma Tetlow, Chief Economist at the Institute for Government

Professor Richard Jones states that there is an opportunity to address this disparity, calling the and the recent Levelling Up White Paper ‘encouraging’. However, he notes that while Innovation Accelerators - including one centred on Greater Manchester which “offers the chance to inject a new, place-led dimension into innovation policy” – are promising, these kinds of initiatives must be extended to other places in order to improve regional productivity.

Professor Jill Rubery writes that “Casting a gender lens on the productivity debate reveals that a simple focus on productivity will not meet the needs of women or those of poor households,” and adds that “A key issue is whether these policy agendas will address the underutilisation of women’s potential and the undervaluation of women’s work…the white paper hardly mentions gender except in relation to healthy life expectancy, where women for once do better than men.”

Skills are vital for improving productivity, and Professor Andrew Westwood comments that “If the government wants to ‘level up’ and ‘transition to a high productivity economy’, it has to enable places to shape the skills system according to their own particular needs.” He points out that weaker local economies tend to have significantly lower levels of skilled people - ONS data shows that Oldham, for example, has just over half the number of people with high skills as Trafford (28% compared to 51%) and twice as many adults without any qualifications at all.

Professor Dave Richards asks whether “the UK’s system of governance is as much part of the problem as the solution to anaemic productivity”, adding that “wholesale reform not only requires the bolstering of powers downwards, but also overhauling the scale of powers and centralised decision-making claimed by the Westminster government.”

Other recommendations within the report focus on the importance of social value in public procurement, on the green recovery and the potential of the North West, and the importance of an appropriate digital transformation in order to create a technologically diverse, sustainable and productive economy. 

Read the digital version of On Productivity, or view the full PDF below.

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