Leading think tank: “Levelling up was business as usual, but that has to change”

As levelling up turns three, new analysis reveals that public spending is lower in the North than England wide despite the agenda

The leading think tank for the north of England has published analysis showing that despite the rhetoric of the levelling up agenda, public spending on the North is lower, and has grown less since 2019, than in other parts of the country.

Three years ago this week, the new Prime Minister Boris Johnson stood on the steps of Downing Street and promised to “level up” the country, and under his premiership total public spending did increase in every region of England.

But researchers at IPPR North have today published new, independent analysis showing that the North now receives less per person in public spending than the rest of the country.

In 2021 (the latest available data), total public spending on the North was £16,223 per person, an increase of 17 per cent on 2019. This is lower than the England wide average of £16,309 per person, an increase of 20 per cent on 2019. London saw the highest public spending per person and the highest increase over the course of the levelling up agenda, at £19,231 per person, an increase of 25 per cent. Indeed, the spending gap between the North and the capital doubled over the period – growing from a difference of £1,513 per person to £3,008 per person between 2019 and 2021. 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 per cent increase.

The figures tell a similar story when researchers remove spending on the Covid support scheme and on health to allow for the impact of the pandemic. When removed from the calculations, IPPR North finds that the North received £11,505 per person on public spending in 2021, an increase of two per cent on 2019. The England average in 2021 was £11,524 per person, an increase of three per cent. The highest spend and highest percentage increase was on London, which saw £13,442 per person, an increase of eight per cent since 2019. In these calculations which remove spending on the Covid support scheme and health, the gap between the North and London grew by almost 80 per cent, from £1,081 per person to £1,937 per person over the 2019 to 2021 period. The lowest total per person public spending in 2021 was in Yorkshire and Humber at £11,049, and the lowest increase was in the North West, which saw an increase on 2019 of just one per cent.

IPPR North have welcomed the “essential” increase across England in public spending, but point to sustained underinvestment in the North and continuing financial pressure on northern local authorities, which have played into the country’s widening divides, as evidence that the next Prime Minister has to “go much further to unlock northern prosperity” and succeed in levelling up the country.

Marcus Johns, a research fellow at IPPR North said:  

“On public spending, the money simply didn’t follow the levelling up rhetoric. Although an increase in public spending on 2019 was welcome, and absolutely essential, spending is lower, and grew slower in the North, than in other parts of the country. At the same time, the country became more centralised and inequalities widened. This is because power is not distributed fairly in this country.

“Regions like the North deserve nothing less than to be afforded the tools they need to level up for themselves – it’s a sensible way of governing, and very normal in less unequal countries. But here, that hasn’t yet happened at anywhere near the level needed.

“Candidates to be the next Prime Minister should commit to delivering where their predecessors have not. Reversing cuts to local government and to planned transport projects, beefing up the Levelling Up Bill to make it a transformative piece of legislation, and going big on opportunity and future proofing the economy”.

Ryan Swift, a research fellow at IPPR North said:  

“Our analysis suggests that levelling up was, in many ways, business as usual. But that has to change.

“The next Prime Minister will enter Downing Street as a result of votes lent to their party, by many in the North and the Midlands, in 2019. The government has not yet delivered for people in these communities, so the next Prime Minister will have to go much further to unlock northern prosperity.

“If candidates hope to serve for longer than their recent predecessors, they should listen to the North, and make unlocking the region’s significant potential their personal priority”.

Total managed expenditure by region 2018/19 to 2020/21 (real terms)

Source: ONS (2022) Country and regional public sector finances, UK: financial year ending 2021

Total managed per person expenditure by region 2018/19 to 2020/21 (real terms)

Source: ONS (2022) Country and regional public sector finances, UK: financial year ending 2021

Total managed expenditure by region 2018/19 to 2020/21 (real terms) with covid support scheme expenditure and total health spending removed

Source: ONS (2022) Country and regional public sector finances, UK: financial year ending 2021

Total managed per person expenditure by region 2018/19 to 2020/21 (real terms) with covid support scheme expenditure and total health spending removed

Source: ONS (2022) Country and regional public sector finances, UK: financial year ending 2021