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Mayors will deliver levelling up, not Whitehall
Before levelling up there was the northern powerhouse, an ambitious vision I designed with George Osborne, then the chancellor, to rebalance the UK economy.
As well as investment in education, infrastructure and skills, the north needed devolution to truly unlock its potential and create a whole greater than the sum of its parts. This had become clear in a previous project I had chaired, the Cities Growth Commission.
More powers and funding spent locally would empower cities and towns to unleash their full economic power, particularly in areas where productivity lagged behind where it should have been.
We negotiated a series of devolution deals with local councils, with the aim of sharing power more evenly across the English regions, starting with the north and West Midlands as well as parts of the east and south west.
Unfortunately, that mission was then put on hold. As Theresa May’s government grappled with Brexit, devolution slipped further down the priority list. The northern powerhouse minister Andrew Percy was even banned from using the phrase “northern powerhouse” on his first trip north — not exactly an encouraging sign.
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Now this government says devolution is back on the agenda, but the proof will be when the levelling up white paper is published in a few weeks’ time.
When the first metro mayors were elected in 2017 it was considered a major political experiment. Five years later and these mayors are changing the political landscape.
Those like Andy Burnham, Tracy Brabin, Dan Jarvis and Steve Rotheram are offering voters evidence for what Labour might look like in power, while Andy Street and Ben Houchen are major forces for the Conservatives.
And these mayors aren’t afraid of holding the government to account: Ben Houchen wrote for The Times Red Box on Monday that red wall voters won’t stick around if promises to level up are broken.
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The north’s economic underperformance means that more tax is spent on welfare than is raised here. Driving up productivity is necessary to reversing that cycle of failure and generating more tax revenue, as Michael Gove, the levelling up secretary, told the Today programme this week.
Firstly, we need to put funds in the hands of local leaders and that investment will go much, much further. Then, as their economies improve, let them raise their own funds and cut the proportion of public spending raised by the Treasury.
Eventually places which do drive growth can retain that uplift in revenues, meaning that future growth — whether it be in London or the north — can be reinvested through fiscal devolution.
Embedded in their local communities, directly answerable to voters, metro mayors have that deep level of detailed knowledge required for effective policy-making and delivery of programmes that address health, wealth and opportunity. Whitehall, however well-intentioned, simply can’t compete by spending in silos.
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Education, for example, would be far better tackled at a local level. “Smart opportunity zones” led by metro mayors could help to address the myriad place-based problems such as health and housing which contribute to the education disadvantage gap.
Devolution offers a chance to return to a more grown-up approach to policy, where central government and local leaders can work together across the political divide on shared priorities.
I am optimistic that Gove and Neil O’Brien, the levelling up minister, know what they’re doing — but only an ambitious plan, supported by the government as a whole, to decentralise power away from Whitehall will deliver the changes we need.
Lord O’Neill is vice-chairman of the Northern Powerhouse Partnership
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