Levelling Up News: 17 September
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NEWS AND STATS
New Onward research
Our latest paper analysed the local government funding formula and argued that:
Repeated failures to reform council funding has left a formula based on outdated 1991 property values, traffic flow data from 2009-11 and highways data from 1991-2002.
Per capita council taxes in London (£481) are now a fifth lower than in much poorer regions such as the East of England (£593) and South West (£620).
In the absence of wholesale reform, we call for introduction of a local government funding floor of 90% core spending power, to uplift 30 local authorities at a cost of £300 million per year.
Read the full report here.
How levelling up worked in East Germany
Targeted firm-level subsidies work better than simple cash transfers at reducing unemployment and regional inequality.
Research found that a 1 percentage point cut in the subsidy decreases investment by 6.7% and manufacturing employment by 1%.
Post-reunification economic policy subsidized up to 50% of investment costs for manufacturing firms in East Germany. (Siegloch et al)
Place-based R&D in Russian ‘Science Cities’
Past local innovation policies generated modern-day cities that are more productive and innovative, host more highly skilled workers, and pay higher salaries.
Even after state funding came to an end, these locations still employ more workers in R&D and ICT-related jobs, apply for more patents, high-skilled workers earn US$250 per month more than average, and low-skilled workers earn US$120 more. (Schweiger et al)
MAP OF THE WEEK
Council Tax actively works against levelling up, accounting for a higher proportion of household income in poorer areas. Total receipts equal 1.2% of gross disposable household income (GDHI) in Camden but 3.8% of GDHI in Redcar and Cleveland and 4.6% of GDHI in East Devon.
VIEW OF THE WEEK
Selaine Saxby MP, Member of Parliament for North Devon
“Levelling Up” must benefit the whole country. While plenty has been written discussing levelling up the North, far less attention has been given to what is levelling up the South and in particular the south west. This is perhaps because, as a whole, the south west is perfectly average in most indicators of success that levelling up may target compared to the rest of the UK. However, dig a little deeper and it becomes clear that there is vast intra-regional inequality in the south west on a level barely seen elsewhere within the country.
Broad brush regional comparisons using the traditional indicators of success are by themselves unhelpful when discussing the unique position of the south west, and to understand what is really going on we must dig beneath the surface. Our unemployment is low in the south west, but this headline statistic hides the prevalence of part time work (some 27.1% of people) and the relative low pay of those at the bottom of the income spectrum, particularly the level of those on minimum wage.
Indeed, the bottom 60% of part-time workers in the income distribution in the south west earn less than correspondingly ranked part-time workers in every other region. This is despite the fact that workers here consistently work longer hours than in the south east, for example.
In the south west we also suffer poor digital connectivity, something I know well as Chair of the APPG on Broadband and Digital Communication, and poor physical connectivity, with few jobs within a reasonable drive of people’s homes. The number of jobs within Devon and Cornwall reachable within 60 minutes is two times below the median, and some five times below the median for those within 90 minutes.
This picture may be somewhat unfamiliar to those in the more urban conurbations in the south west, but to those of us in North Devon or other rural and coastal areas, often long distances from any city or motorway, these are very real concerns. With few jobs available within commuting distance, and connectivity in many places too poor to even consider a job requiring an average speed internet connection, people will continue moving away and our skills gap will widen further.
The story of the south west is one of complex inequality, that is not easily reflected in traditional interregional figures, particularly around the coast. If the Government is to truly make a difference and level up the country as a whole, the south west cannot be ignored, and indeed deserves a special focus in its own right given the unique situation in which it finds itself.
ABOUT US
The Taskforce is made up of around 65 Conservative MPs from constituencies right across the country.
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