North-South divide grows as government 'undermines' levelling up, State of the North report finds

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The think tank highlighted three main points from what it called "stark results" in its annual health check of the economy of the North of England.

The UK is more regionally divided than ever with a 'gulf' between levelling up promises and reality, a study has found.

The State of the North report, published by the leading think-tank for the North of England, says central government policy has so far undermined the levelling up agenda.

IPPR North, the northern arm of the Institute for Public Policy Research think tank, highlighted three main points from what it called "stark results" in its annual health check of the economy of the North of England.

  • Funding for levelling up does not compare to local government austerity

  • The country is becoming more centralised, with public spending concentrated in central government

  • Regional divides are growing across a range of measures

It also said it found that many promises made by the government have been broken, scaled back or represented a reduction to other pots of funding they replaced.

The authors estimate that, in the five years to 2019/20, London received the equivalent of £12,147 per person. In the North, the figure was just £8,125.

Despite this however, the think tank said the North is "demonstrating its potential" with local people, communities and leaders doing "what is needed to level up".

Researchers found the North generates 51% of England's renewable energy.

But, it added that the region's full potential could only be realised "when central government is willing to devolve power to, and collaborate with, empowered regional and local government, and communities."

The think tank said many promises made by the government have been broken, or scaled back.

What did the report find?

  • Funding

The 2021 allocation of the Levelling Up Fund, which is controlled by central government, is an investment of just £32 a person in the North.

While annual council service spending over the past decade has dropped across England by £388 per person, in the North that rose to £413.

  • Centralisation

Public spending is concentrated in central government.

Four years ago 95p in every £1 paid in tax was taken by Whitehall, despite the levelling up agenda, this has increased to 96p.

  • Growing regional divides

One example the report found that for every job created in the North, just under three were created in London and the 'Greater South East'.

In work poverty has risen in the North from 3.4 million people in 2009/10 to 3.5 million in 2019/20.

Interim Director of IPPR North, Arianna Giovannini said the government has "over-promised and under delivered".

The report comes more than two years on from a promise by the government to 'level up' the country.

Interim Director of IPPR North, Arianna Giovannini said: "Two years on from the promise to level up the country, government's rhetoric has reached fever pitch, but in reality they have once again over-promised and under delivered on rebalancing our economy.

"To succeed in levelling up, enabling people everywhere to live a good life it will be necessary to build an economy hardwired for widespread prosperity, that powers the net zero transition, and provides everyone with access to high quality lifelong education.

"Broadening and deepening devolution, and building collaborative relationships between and across all levels of government are essential components of the levelling up jigsaw.

"But reorganising local government by the back door, false dawns, and further centralising power and funding would be a huge mistake and level down the country".

Levelling Up secretary Michael Gove said the government's plans included improving schools, tackling health inequality, and investing in the private sector.

He told ITV News: "Levelling up means so many things. It does mean improving schools - and we have plans and we're working with local authorities and academy providers to do that.

"It means tackling health inequalities - whether that's some of the problems that covid has laid bare or other factors like cramped and inadequate housing that lead to poor health outcomes. But it's also about private sector investment as well."