‘Beyond Levelling Up: devolution and “left-behind places” in North East England’

By Charlotte Carpenter, Karbon Homes, Newcastle upon Tyne, and John Tomaney, University College London.

Draft chapter: for Westwood, A and Tomaney, J (Eds.) Title, tbc

Version published in QT Magazine edition 13, 2nd May 2024

Visitors to Newcastle over recent years have become accustomed to cranes on the skyline as new commercial and residential developments appear. National newspapers and international magazines laud the city’s restaurant scene and the attractions of places like Whitley Bay, a Tyne and Wear Metro journey away from the city centre, with its artisan bakeries, coffee shops and bookstores. But another side of North East England also attracts attention. Most households in the region have experienced declining real wages, which translates into poverty for many or ‘destitution’ in the word of the Joseph Rowntree Foundation. The most recent detailed estimates for child poverty levels after housing costs in the North East, published in June 2023, showed that in 2021/22, almost 190,000 (35%) babies, children and young people across the North East were living below the poverty line an increase of around 51,000 since 2014/15, the steepest rise in the UK. 21 out of the North East’s 29 Westminster constituencies have more than one in three children living below the poverty line. High levels of poverty exist alongside accumulating health problems. There are many ways to demonstrate these problems, but one telling statistic is that the North East has the highest suicide rate in the UK twice the rate of London, a barely spoken about public health crisis that leaves untold devastation. The North East contains more than its fair share of places ‘left-behind’ by decades of deindustrialisation and globalisation.

It is in this context that the new North East Devolution Dealwill be expected to deliver significant improvements to people’s lives. While it devolves a modest set of powers and resources, its main consequence is that it creates a new North East Mayoral Combined Authority (NEMCA), that includes an area south of the Tyne.? This replaces the current North of Tyne Mayoral Combined Authority (NoTMCA), which never made any sense as a jurisdiction, creating as it did a political boundary between the commercial centre of Newcastle and areas south of the Tyne, Gateshead, South Tyneside, Sunderland and County Durham which rely on it for jobs and services. The boundaries of the new MCA make much more sense. A population of about 1 million people will be added to the existing NoT population of 800,000. But this expansion brings both opportunities and big challenges for any prospective mayor of the new authority. Among the notable new facts of political geography, is the inclusion of many former mining communities across County Durham, but also in Sunderland, South Tyneside and Gateshead, which often exhibit high levels of disadvantage. Social and economic disadvantage has been accumulating in the North East for generations. Since the 1930s, waves of policies and agencies have come and gone with, at best, limited sustained success.

Similar patterns of polarisation are visible elsewhere in the UK, and increasing levels of destitution. The UK government’s levelling up agenda ‘a moral, social and economic programme for the whole of government’ is meant to address, what it called, the problems of ‘left-behind places’. But, despite the publication of a White Paper in early 2022, the policy is in disarray, with even its chief architect expressing his disappointment about its progress. The government’s White Paper, Levelling Up the United Kingdom, set out ambitions to boost productivity, improve public services, restore a sense of community, local pride and belonging, and empower local leaders and communities. But we still await meaningful details on how these objectives will be delivered. Existing initiatives are piecemeal and patchy. Moreover, a central element of the framework on which the White Paper rests an emphasis the importance of urban agglomerations as centres of innovation that propel growth, with the apparent assumption that this will trickle down to disadvantaged communities.

There is increasing recognition that relationship between growth, jobs, prosperity and wellbeing has broken down. Indeed, future increases in productivity growth might threaten employment; while productivity growth no longer necessarily feeds through to increased wages. Where a focus on the drivers of productivity to achieve growth has raised GVA/GDP, this has not ‘trickled down’ to all places and people rather the gaps have widened, leaving many ‘left-behind’, with the UK being one of the most spatially unequal economies in the developed world. More fundamentally, GDP is a poor measure of human wellbeing because as Robert F. Kennedy put it in a speech in 1968, it fails adequately to measure the things that make life worthwhile.?

Despite (or maybe because of?) decades of focusing on harnessing the drivers of productivity to increase GDP, the gap between places is growing, so a fixation on agglomerationpresents more threats than opportunities for ‘left-behind places’. A policy agenda that enables growth in the urban core but neglects disadvantaged communities will not solve the problems of a region like the North East. The NoTMCA has a formal commitment to an ‘inclusive economy’ but much more needs to be done to make this a reality. Although the Levelling Up White Paper talks about restoring ‘pride in place’, this is the least convincing part of its analysis and where policy proposals are weakest. But, as the MP for Sedgefield, Paul Howell, notes, many villages in County Durham ‘need investment in their social fabric’ and ‘resources to nurture and develop the type of relationships that underpin the health and wellbeing of communities’. Recent data from the Centre for Cities has emphasised the growing gap between Newcastle and other towns in the North East, even Newcastle continues to grow at a rate below the national average.??

An incoming Mayor of the North East faces the twin challenges of seeking to close the gap between the region and the more prosperous parts of the UK while developing a policy for ‘left behind places’ that goes beyond the limitations of the levelling up agenda. Where might he or she look for ideas? The NoTMCA’s Wellbeing Framework is a very welcome attempt to broaden the lens through which policies are made and their impact measured.? But given the intractability of the challenge to date, progress at the scale we need will require a radically different approach. In our view, the incoming Mayor should look closely at the emerging concept of the Foundational Economy (FE) to guide their thinking.?

The FE refers to the infrastructure, goods, and services required for everyday life, irrespective of where someone lives or what their income is. The thinking behind the concept of the FE views the economy as several changeable economic zones comprising: the tradeable or competitive economy (including hi-tech and commercial property); the foundational economy (such as utilities and schools, and also including the overlooked economy (such as hairdressers and cafes that add to the quality of life); and the core economy of family and community (which is what life is about, for most people).?

Economic and industrial policy has tended to be fixated on the tradeable zone and the glamour of hi-tech and high value property development.? Policies and interventions aimed at driving improvements in economic productivity, clearly have an important role to play in driving international competitiveness.? However, the vital role played by the other economic zones in supporting broader wellbeing has tended to be neglected.?

Focusing only on the tradeable zone assumes that everyone’s economic welfare depends primarily on individual income that sustains private spending in the market.? We know that, currently, public and private providers in many cases deploy business models that fail to adequately provide foundational goods and services for all citizens.? Given that, this approach overlooks the way that human wellbeing relies on a range of factors that the market doesn’t always provide.? In contrast, the FE approach puts more emphasis on ensuring that the essential infrastructure, goods and services necessary for everyday life, are physically and financially accessible to everyone, irrespective of where their live or what their incomeis. These insights are especially important in ‘left-behind places’ where the prospects for growth are low and the impact of interventions in the tradeable or competitive economy are subsequently lower.

Drawing on recent work by Karbon Homes which sets out anew approach to the problems of ‘left-behind places’ based on FE ideas Fair Foundations and its ‘case for place’, and onwork by UCL on social infrastructure in County Durham, we outline an agenda for an incoming Mayor of the North East. This agenda recognises the limits of powers and resources of the MCA so, in addition to identifying issues for the Mayor to tackle directly, we also urge an incoming Mayor to use their convening power, to bring other organisations such as universities, the NHS and private utilities behind a common agenda focused on rebuilding the foundational economy and restoring pride in our communities. First, a Mayor should commit to the kind vision that lies behind the Welsh Wellbeing of Future Generations Act, that goes beyond a focus on growth to target improvements in community wealth, health and sustainability. A Mayor should commit to making the biggest improvements in wellbeing in the more ‘left-behind’ places. To do this, the Mayor should focus on improving the level of residual household income rather than merely Gross Value Added or business productivity.?

Within this framework a set of practical policies are possible. A new Mayor should:

Employment

• target extra support towards those who are long-term economically inactive to get into work, building on programmes such as Karbon Homes ‘New Start’;

• build community enterprises, such as Woodshed Workshop in Sacriston, which teaches woodworking skills to young people who face challenges in the school system;

Connectivity

• deliver and build upon the North East Bus Improvement Plan to better connect villages to centres of employment and services;

Industry

• promote public/third sector procurement that supports the FE in the North East;
• develop a plan for a ‘green industrial revolution’ that prioritises retrofit of the existing housing stock, utilising the SME supply chain and local skills and creatingemployment opportunities;

Social infrastructure

• invest in local youth and children’s projects, such as Sacriston Youth Project, that provide out-of-hours and out-of-term childcare to families that otherwise cannot afford it, to enable parents to participate in the labour market; and
• create a high streets fund that focuses on rebuilding social infrastructure, exemplified by the work of the ChopwellRegeneration Trust.

?This is list is illustrative rather than exhaustive of the kinds of priorities a new Mayor should adopt to signal serious intent in tackling the problems of ‘left-behind places’. More work is needed to flesh out, not just a strategy, but a new approach. The measure of success should be how far wellbeing is improved in the most disadvantaged places. The Mayor will need to work with central and local government and the private and voluntary sector to meet these objectives.? As part of this they will need to embrace the power of bottom upaction, an approach which harnesses community power and community voice and allows space for experiment. Tackling these problems will take longer than a single Mayoralty. Above all, the Mayor will need to lead a radical reset of economic policy, creating consensus around a long-term approach to the North East economy and developing institutions to deliver it. Rebuilding our communities urgently needs new thinking and political leadership - the North East devolution deal gives the Mayor and the region an opportunity to seize that challenge. Let’s seize it.