UK’s ‘level up’ plans criticised by independent advisory group

An advisory group led by Bank of England chief economist Andy Haldane has criticised the UK government’s plans to ‘level up’ the country and cast doubt on Boris Johnson’s efforts to tackle climate change.

In a report published on Tuesday — its last before it is disbanded by the government at the end of this month — the industrial strategy council said the UK’s plans to spread economic growth into the regions of the UK appeared “over-reliant on infrastructure spending and the continued use of centrally controlled funding pots thinly spread across a range of initiatives”.

“Evidence, historical and international, suggests this is unlikely to be a recipe for success,” the council said. “Sustained local growth needs to be rooted in local strategies, covering not only infrastructure but skills, sectors, education and culture.”

The council added that it wanted to see a “comprehensive reorientation” of the government’s approach to levelling up in a forthcoming white paper on devolution. 

The independent council is being disbanded after ministers scrapped the UK’s industrial strategy earlier this year in favour of a new ‘plan for growth’. Other members of the council include Archie Norman, chair of Marks and Spencer, Dame Kate Barker, chair of trustees of the Universities Superannuation Scheme, and Paul Marshall, chair of Marshall Wace.

As part of its strategy for rebuilding the economy after the Covid-19 pandemic, the ‘plan for growth’ was published with little fanfare during the Budget earlier this month. Critics said it contained few new policies but rather brought together existing announcements and promised further reviews in the future. 

The council’s main concern with the government’s previous industrial strategy, which was launched by Theresa May’s government in 2017, was that it had spread itself too thinly “with 142 policy measures”.

But the industrial strategy council said it had identified about 180 policies and commitments in the government’s new ‘plan for growth’ “that begs questions about the scope and scale, and hence likely success, of this plan”. 

Greater prioritisation was “likely to be needed if the plan for growth is to meet its objectives”, it said.

The council also said the government lacked a “practical road map for delivering net zero”, another central part of Johnson’s economic vision for the UK. The prime minister announced in December a new accelerated target for reducing carbon emissions alongside a 10-point plan for what he called a “green industrial revolution”.

However, the industrial strategy council said in its report that several areas of the government’s net zero policy “lacked the required scale to make progress at the required speed”.

While the ‘plan for growth’ sets out some good high-level objectives around international co-operation, free and fair trade, and exports, the council said “it does not contain much detail on how these objectives will translate into actionable policy plans”. 

The government said in the four years since May’s industrial strategy was published, the UK’s business and economic environment had changed.

“It’s right that our approach changes too. That’s why our new plan for growth sets out the opportunities we’ll seize across the UK to drive economic growth, create jobs and support British industry as we level up and build back better out of this pandemic.”

The council found that the plan for growth focused on three key pillars — infrastructure, skills and innovation — which it described as “welcome [but] not sufficient”. 

It pointed to an intention to set out clear metrics to monitor progress but called for the government to widen its framework beyond these traditional drivers of productivity to measures of social, human, and natural capital, as well as broader welfare impacts. It recommended an independent body that would evaluate progress in delivering the plan.

The council also said the principle of co-creation — partnerships between the public and private sectors — was “underemphasised” in the plan for growth. It said such joint ventures had been a “particular strength of the 2017 industrial strategy”.