Policy ‘pendulum’ holds back attempts to reduce regional inequalities

Writing as part of a new British Academy report, 'Lessons from the history of regional development policy', Professor Andy Pike recommends that more meaningful decentralisation of powers and resources, and more integrated governance structures that operate to much longer timescales, could address persistent imbalances across many parts of the country.

Since the 1920s, approaches to regional development in the UK have fluctuated, and despite some attempts at decentralisation, this has been done in a piecemeal and short-term way.

Additionally, regional institutions have lacked sufficient resources and autonomy to adapt policies to the needs of the places they serve. The result of this has been that the UK has remained highly centralised, with most decisions made by politicians in Westminster and civil servants in Whitehall, and support concentrated in London and the South East.

Professor Pike, Henry Daysh Professor of Regional Development Studies, Newcastle University, said: "Attempts to reduce regional inequalities across the UK have been hindered by decades of changing regional policy governance structures, and could be likened to a pendulum swinging from one set of arrangements to another. In addition, regional policy over the last hundred years has had a predominantly economic focus in addressing regional inequalities.

"The new Government has promised further devolution and local government reorganisation and funding reform, with Mayors responsible for Local Growth Plans that will deliver locally-led responses as part of the national strategy for growth. This suggests that the pendulum swing might be less severe than on previous occasions.

"Working more closely across public policy areas such as education, health, social care and welfare, and giving a wider set of people and places a greater voice, is vital for a just transition to a net zero carbon and post-pandemic future.

"The Government should continue to broaden the focus of regional policy to include social and environmental concerns and understand that a sustained commitment spanning 20-30 years is required in order to stand any chance of success of reducing regional inequalities."

Working with co-author John Tomaney, Professor of Urban and Regional Planning, University College London, the two academics describe how the idea of regional development in the UK began in response to the need for recovery following the First World War and the Depression of the 1930s. Governance of regional policy was at a national level as a way to replace declining industries and was targeted at areas of high unemployment, leading to the creation of government-funded industrial estates such as Team Valley in Gateshead, and similar initiatives in South Wales and Clydeside, Scotland.

From the late 1970s, there was a shift to more market-oriented, entrepreneurial and private sector-led regional development. Structures built up in previous years were abolished and replaced with Enterprise Zones and Local Enterprise and Development Agencies. This time also saw the introduction of competitively allocated funding, and a greater focus on urban areas.

This was followed by the election of New Labour in 1997 when the pendulum swung again towards a much more interventionist approach. Place-based governance grew, and places gradually took greater responsibility for reducing inequalities in economic and social conditions.

However, devolution and greater regionalisation created a complex and fragmented landscape across the UK, not just in terms of City Regions within the broader regional framework but also regions working together, such as the Northern Way, comprising the North West, Yorkshire and Humber and North East regions.

The Coalition government and the age of austerity it introduced again aimed to reduce inequalities but instead led to a patchwork of arrangements and had limited success. Despite the introduction of Metro Mayors, Combined Authorities, and Local Enterprise Partnerships, power and resources still rested with the UK government in London. Attempts to 'level up' the UK economy after 2019 increased the number of local initiatives that could be bid for, including Town Deals, Investment Zones and Freeports.

Early in 2022, the Government announced further decentralisation of powers as part of its long-awaited Levelling Up White Paper, setting out how it intended to address the issues facing 'left-behind' places across the UK. Alongside a commitment to greater devolution, the proposals covered areas such as education, health, housing, transport and regeneration.

Professor Pike added: "These plans covered a range of policy areas but said little about how it was all meant to fit together and make a difference to people's lives.

"Increased co-operation and joint working between other public policy areas to align regional delivery and resources, and a longer term approach, are needed for a more equal and sustainable economy."

Read the Newcastle University FROM blog exploring the work of the Centre for Urban and Regional Development Studies (CURDS), its research into the effectiveness of the government's local and regional development policy and why local decision making is key to reducing economic imbalances.