Spending gap between London and the North doubles - but is levelling up really 'dead in the water'?

Northern papers joined together to publish the same front page, urging the new Prime Minister not to 'turn your back on the North'. Credit: Reach Group Newspapers

For three years, two words have dominated the political landscape of the UK - it's rare to hear a ministerial visit or a parliamentary announcement pass that doesn't include the phrase "Levelling Up".

It was the flagship promise of Boris Johnson's Government, and now the two candidates vying to replace him as Prime Minister have promised that they remain "completely committed" to the policy (Liz Truss), and given it "an unequivocal massive yes" (Rishi Sunak).

But are they trying to build on already shaky foundations?

Labour has repeatedly levelled the accusation at the Government that levelling up is more rhetoric than reality - Sir Keir Starmer telling ITV Granada Reports on a visit to Liverpool that "this Government has as good as given up on levelling up".

He said: "I don't think this funding model [the Levelling Up Fund] is the right one, where you have a funding pot in London and somebody in Whitehall decides what can happen in the North West.

"I would like to see that money going directly to the areas and letting each area have a proper say in the plan for their area.

"There's nobody who knows what is needed for Manchester, for Liverpool etc, better than the people who live there. I want to turn the model on its head".

Does 'the rhetoric match the reality'?

Now, you might well expect the Opposition to oppose a Government approach, but new analysis of ONS figures by the Northern branch of the Institute for Public Policy Research claims that when it comes to public spending, "the money simply doesn't follow the levelling up rhetoric".

Amreen Qureshi from IPPR North explains: "Three years ago Boris Johnson stood on the steps of 10 Downing Street and he promised to level up the country... What we're seeing three years on is that there's still severe underinvestment in places like the North."

IPPR North's latest analysis says the region continues to receives less per person in public spending than the rest of the country, according to the latest available data, which was from 2021.

In that year total public spending per person in the North was £86 lower that the England-wide average, and £3,008 less than in London.

It means that over the course of the levelling up agenda, the spending gap between the North and the capital doubled.

IPPR North said it also examined the data while excluding the spending on health and Covid support to allow for the impact of the pandemic, but that it followed the same trend.

The lowest total per person public spending in England was in Yorkshire and Humber, at £15,540 per person, and the lowest percentage increase was in the North East, which saw a 16% increase.

What impact could this have on levelling up?

The Department for Levelling Up has opened its Levelling Up Fund for the second round of bids from local communities.

Round One saw £1.7 billion allocated to high streets, transport and cultural projects all around the country, including:

  • £37.5 m for transport investment in the Liverpool City Region

  • £20m for town centre regeneration in Stockton

  • £20m for Castlegate in Sheffield

Public spending has also gone up over the course of the levelling up agenda, and the IPPR North says it welcomes this "essential" increase, but are worried that sustained underinvestment in the North puts more financial pressure on local authorities in the region, which widens existing divides:

IPPR North has urged the next Prime Minister to “go much further to unlock northern prosperity” and succeed in levelling up the country.

Can levelling up actually be delivered?

This report comes as newspapers across the North of England joined together to urge both candidates for Conservative Leader to honour the commitment to levelling up.

But what could that really look like?

The Government's Levelling Up White Paper has now set out exactly how success can be measured.

The IPPR North think tank acknowledges that these are ambitious and welcome missions - but that the sharp end of inequalities are still being felt.

Here's how they think that challenge can be met:

What has the Government had to say?

In a statement a spokesperson said they are pressing "full steam ahead" with levelling up the North, and "do not recognise these figures" in the IPPR report.

They added: “We are transforming the rail network with £96 billion investment to deliver faster and more reliable journeys, creating thousands of jobs with freeports in Teesside and the Humber, and supporting projects that improve everyday life with our £4.8 billion Levelling Up Fund.

“We also understand the pressures facing local authorities, which is why we made an additional £3.7 billion available to councils in recognition of their vital role and to ensure they are able to deliver key services.”

Get more analysis from the ITV regional political programmes: