Levelling up? Follow the money, follow the legal powers

Two articles in the FT caught my eye on Levelling Up. And as one former Downing Street insider once told me in my civil service days regarding newspaper trustworthiness: “Money does not lie to itself”.

The articles are sub-headlined:

Looking at Wolf’s article first, there are a number of quotations that stand out – ones that opposition parties might want to look at. (As Wolf makes clear at the end.

“Businesses respond to the quality of local resources…. A local policymaking centre with tax, spending and planning powers will be needed to create and manage these resources [i.e. physical, human, intangible and financial capital] well.”

Martin Wolf, FT, 5-6 Feb 2022

Interestingly, the NHS in the West Midlands has one such unit – The Strategy Unit. I cannot find an equivalent for Cambridgeshire / Cambs & P’boro even though it looks like something was started then abandoned after the 2015 general election – Fit for the Future, having been super-ceded by the Integrated Care System. Or rather the former was a programme to get to a point in the future that was then abandoned, and the latter is what they (Ministers) want to create at present. They say they are keen to hear from anyone so click here for details.

In the meantime, Mr Wolf continues:

“The need for local knowledge and accountability makes devolution vital…. Local governments need to be able to set their own taxes, including on commercial property, since its value reveals the quality of their decisions.”


In principle, the knowledge is there with Cambridgeshire Insight. The sad thing is few people know it exists, and even fewer people know how to use it effectively when it comes to local policy making. Something not helped by the complete fragmentation of local public services in the name of bringing in the private sector to do things more efficiently because ministers once read it in a text book at university.

I’ve bolded the section about local councils being granted powers to set their own taxes. This is something the Conservative Party would *never* agree to because they would not want to risk having very left wing finance chiefs setting high tax rates for the wealthy in every other city hall across the country – mindful that First Past The Post (FPTP) in local government produces monster majorities in a number of councils (Such as Fenland District Council in Cambs) effectively making them one-party councils. The mindset of controlling local councils from the centre like this is a hangover from the 1970s/80s – which itself is a hangover from the post-war battles of how local government should be structured. The present structure of two and three-tiered councils with a few unitaries dates back to the last major reforms by Edward Heath’s Conservative Government. Few have dared try anything radical since.

Metro mayors are a meek concept when you consider the alternatives. So much so that Wolf notes the policy areas that have been supposedly devolved to them actually remain under central government control.

“Yet, crucially, as the Institute for Fiscal Studies notes, many of the failings the paper wants to remedy — in education, skills, health and transport — “lie directly within government control”


…and not just central government: The Treasury controls the resources to all four of those – along with which The Treasury is not fully behind the new policy of Levelling Up. And the lack of Treasury support comes up time-and-time again. Here’s another example.

It’s not like devolution in England has not been discussed by opposition politicians before.

“Steve Reed said there was a clear financial case for faster devolution of powers, including greater local control over taxation. In a speech to the LGA, Reed said Labour would look at devolution of education, welfare, housing, health, and infrastructure. But, more significantly, the party would examine devolving further fiscal powers, including a “need to look at localising elements of VAT and income tax”.”

Shadow Local Gov Secretary in The Guardian, 7 Jan 2016 – Pre EURef.
“Whitehall must realise that local areas really do know best”

Says Baroness Camila Cavendish in the FT, who also spent just over a year working for the then PM David Cameron before the catastrophic EU Referendum vote resulted in Cameron’s resignation and with it, all his political appointees including Cavendish. Westminster party politics can be brutal at the best of times. One minute you’re a special adviser to a powerful minister, next minute you’re signing on.

“With little new money, the Institute for Fiscal Studies has criticised these as too broad and unlikely to succeed”

Cavendish in FT 05-06 Feb 2022

And we know there are huge unresolved issues between Gove’s empire and The Treasury – as this leaked letter revealed in a different policy area – cladding.

“No new money” is a phrase that also keeps on coming back with the Levelling Up policy. Can it be achieved with no new money? Furthermore? Will this wash with the public who have seen the taps turned on for things like PPE contracts for friends of Conservatives, and just over a decade before, the bailout of the banks?

Baroness Cavendish explores the policies needed for that self-sustaining virtual circle that will result in levelling up:

“…focusing on economic growth alone will not produce the desired results. Academic experts and the former Bank of England economist Andy Haldane believe that just packing off BBC staff to Salford or building a new bus route won’t be enough… That can only be unlocked through a complex web of local pride, health, skills and quality housing.” 


This is why the moving of various government departments to random parts of England looks and feels ever so chaotic. Do the decision-making functions move with them, or is it simply moving as many of the ‘administrative’ functions out so as to be seen to be doing something? My experience of working in a regional government office in Cambridge in the mid-2000s was eye-opening. Supposedly a link between localities and the centre, it ended up being neither the local voice in Whitehall nor central government’s voice in the regions. One of the reasons for this was New Labour’s initial hostility towards local government as a sector. Their initial response was to create a host of agencies and initiatives that simply bypassed local councils and delivered directly until they discovered the diseconomies of scale trying to do everything through the centre. It was only then that they started taking localism and devolution in England more seriously – but by that time it was too late. In any case, all too often ministers revert to the tried-and-trusted method of ministerial grants. Baroness Cavendish again:

“Whitehall isn’t structured to accept that the right answer may be different in different places or that locals may know best. It remains addicted to formulating “deals” to do its bidding.”


We see this with the Metro Mayors as I’ve mentioned in previous blogposts – such as Mayor Dr Nik Johnson’s successful bid to Transport ministers for funding new zero carbon electric buses. Real devolution would enable the Mayor to raise his own transport revenue through, for example taxing the wealth being generated by Cambridge’s booming tech and biosciences sectors – or the very expensive end of the property market, and using that to pay for infrastructure improvements. But that doesn’t guarantee good news stories for ministers as being the ‘Lady Bountiful handing out grants’ that several generations ago Eglantyne Jebb was scornful of in Edwardian Cambridge.

Finally, Levelling Up has all the hallmarks of trying to be a long term phenomenon – yet it’s being launched under a very politically unstable Prime Minister at his most politically unstable by a minister who has ambitions for his job – along with the Chancellor. Will the next occupant of 10 Downing Street want to continue with Levelling Up, or go for something else?

Baroness Cavendish again:

“Civil servants and politicians move on frequently, unlike shop owners, residents and local councillors.


I was one of those civil servants who moved on – and felt for myself the impact frequent turnover of postholders whether civil service or ministerial, had on policy-making. It destabilised the whole process. It takes at least six months simply to get up to speed with your portfolio area, and over a year become anywhere near competent in it.

“Given the current instability at the heart of government, who knows if ‘levelling up’ will remain in favour long enough to deliver its promised outcomes?”

Cllr Sam Davies MBE, 06 Feb 2022.

When was the last major policy initiative in this field one that lasted long enough to make a positive impact and one that was properly evaluated?

“So…where does this leave us?”

We have 2 years and 10 months before we must have a general election. We have an ageing monarch who today celebrated her Platinum Jubilee (70 years on the throne) as we still face the uncertain times in the face of post-Brexit, the CV19 Pandemic, the Climate Emergency, and sabre-rattling in Eastern Europe, sewage discharges in the rivers, housing crises, and an exhausted NHS and education system. In the meantime, Downing Street is both a laughing stock and a potential crime scene. Hardly the solid foundations for building back better.

“And what of the opposition?”

Sir Keir Starmer is starting to look like he’s forming an alternative government in waiting, but there are so many things that could go wrong. At the moment it’s Johnson’s ministers that are making all of the errors. One of his key decisions is when to announce some big policies that have a substantial amount of research behind them. At the moment he can get away with generic alternatives – such as a windfall tax on the big profits of energy companies. But at some stage he’ll need something more coherent – something that we are more likely to see in the autumn of this year if circumstances have not led to the collapse of Johnson’s Government (could happen) and a new Prime Minister feeling that they have to go to the country to secure their own mandate.

There’s an interesting balancing act that the Labour Leader has to perform. The collective experience of lockdown has meant that a number of previous assumptions on what is and what is not important no longer apply. You only have to see the political mood music around active travel policy and accessibility to open green space and clean air. He doesn’t have the swathe of Scottish parliamentary seats to take for granted as Tony Blair did in 1997. While it suits him to have the Liberal Democrats taking seats off of the Tories in the so-called blue wall in the south – more than a few of which are former long-time Liberal seats a generation ago, he won’t want them to become too powerful so as to become a threat in places where Labour & Lib Dems face off. Furthermore, recent opinion polling has shown that The Green Party are the most trusted on the Environment – significant enough to show that the party as a brand has broken through into the public’s consciousness. That’s not to say both those smaller parties don’t have their own internal fault lines which the print press has exploited with devastating effect before and are likely to do in the future.

In terms of policy-making, opposition parties need to start that process now if they have not already on what their approach to the multiple inequalities we see across the country – and in the face of the climate emergency. Do we have the right institutions with the right funding and powers to deal with this? Do we have the right structures, systems, and boundaries for local government to deal with this? If not, they could start with overhauling these.

Food for thought?

If you are interested in the longer term future of Cambridge, and on what happens at the local democracy meetings where decisions are made, feel free to:

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