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Levelling up needs clearing up

Matt Dicks gives a Welsh perspective on the UK Government’s long-awaited Levelling Up White Paper.

Levelling up is the strategy upon which Boris Johnson built his 2019 election victory. It was, and remains, the subtext to ‘taking back control’ through Brexit – that is, the money that we used to send to Europe is now in the hands of the UK Treasury to spend on priorities determined by our elected-representatives at Westminster, rather than ‘EU bureaucrats’.

Of course, the first point to make is that Wales got a lot of that money back in the form of European Structural Investment (ESI) when the UK was a member of the EU. As a report by the House of Lords Library puts it: ‘Approximately £400 million a year of ESI funds between 2014 and 2020. This was around four times the UK average on a per person basis.’

The UK Government has committed to match-funding those European receipts to the tune of around £1.5 billion a year across the UK – but will Wales get a similar amount to what it received previously, or will that money be spread more widely? That’s one for politicians at either end of the M4 to wrangle over – from our perspective as housing professionals in Wales, what  do the nuts’n’bolts of the White Paper mean for us and what are the opportunities?

The first point worthy of noting is that there was no new money specifically announced. That said, it’s worth keeping in mind that the White Paper sets out the  investment into Wales announced in the Comprehensive Spending Review in the autumn, including £2.5 billion additional each year for Block Grant as well as an additional £790 million for Welsh City Regions and Growth Deals, £130 million for the British Business Bank to establish a new fund in Wales to support access to finance for Welsh businesses, and of course £121 million through round one of the Levelling Up Fund.

Secondly, many of the policy delivery mechanisms and levers that the White Paper references are  devolved – education, training, skills development etc, and of course housing.

The proposals do place housing at the centre of plans to ‘Level up’ and the CIH policy team has done a great job in analysing the detail in this briefing paper for our members.

Key housing-related elements include commitments to increasing affordable housing supply, supporting homeownership, reforms to regulation, a council tax premium on second homes and reform of the private rented sector. All of which is devolved, and in some cases, Wales has already introduced the proposed measures.

The White Paper also sets out localisation of  investment decisions through more elected mayors in England but in Wales it talks of money from the UK Shared Prosperity Fund (UKSPF), for example, being invested through local authorities and the City Region and Regional Growth Deal infrastructure.

The UKSPF will be governed by a ‘UK Wide Ministerial Forum’, but the White Paper gives no detail on how this will operate and what level of parity there will be in the decision-making between the governments at either end of the M4.

So that throws up several questions for us as housing professionals and the sector in Wales:

  • Could there be investment into housing, directly or indirectly, through UKSPF for example, will that be through City/Growth Regions and how would that work?
  • What role will the Welsh Government hold in that decision-making process – so will investment from both governments be complimentary, for example part of the £121 million Welsh investment in Levelling Up round one was spent on dualling part of the A4119 at Coed-Ely, and how does that tie-in with the Welsh Government’s policy on road building?

There are also opportunities more widely in terms of research and development (R&D) with proposals to spend 55% of UK Government’s £40 billion of R&D investment budget outside of London and the South-East over the next three years – again opportunities for housing possibly? But through which mechanism – Welsh Government, local authorities or City/growth deals?

Furthermore, it’s not a clear yet which aspects of the announcements made last week will trigger a Barnett consequential (additional money given to the Welsh Government as a result of increased expenditure on specific policy areas in England). For example, there are several new funded community activities in England including £20 million to Access Foundation, £4 million to Fair4All Finance, and £4 million to #iwill. However, the White Paper does seem to suggest that all spending will need to be met within existing CSR parameters, which would imply that all consequentials for Wales will have already been triggered?

Our ambition is the same as the UK Government’s, and for that matter the Welsh Government, that whether we live in Holyhead or Haverfordwest, or Aberystwyth or Bridgend, we get the investment we need to level up opportunities for all our communities.

What we should recognise is that the UK (and indeed Wales) is a deeply unequal place. So whilst a focus on calling out local and regional inequalities is refreshing, optimism is tempered by a lack of real rigour at present behind how the Levelling Up agenda will truly address those inequalities – in the absence of a clear narrative about long-term measurement, return on investment metrics etc. that we’d usually want to see with a programme of this kind.

What’s clear is that the aims of the programme can only be achieved through collaboration, and with all tiers of government working in tandem to ensure that opportunities aren’t missed. In the context of devolution, Levelling Up does need more clarity otherwise those of us delivering services and investment that feed into that agenda could conceivably end up stuck in the middle of competing priorities.

Matt Dicks is director of CIH Cymru

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