Levelling up and Investment Zones

This time last year, the Levelling Up White Paper was eagerly awaited as a fulfilment of the then Prime Minister’s pledge to his ‘Red Wall’ supporters.

February’s white paper launched the levelling up agenda and draft legislation followed in May in the form of the Levelling Up and Regeneration Bill. However, levelling up appeared to drop off the agenda during the political turmoil of the summer, only to then have regained momentum upon Michael Gove’s return as Secretary of State for Levelling Up in October. It is now progressing through Parliament, but not without controversy. 

We have seen similar consternation over Investment Zones, which were launched by Liz Truss but have been substantially revised, such that only their name remains, following Rishi Sunak’s appointment as Prime Minister in October. 

So where does that leave levelling up, and are Investment Zones, in their revised format, part of the solution, or contrary to it?

Levelling up and the economic context 

As planning consultants, we tend to view levelling up agenda through the prism of housing and transport, but it is much more than that: nationwide broadband, skills, education and training, narrowing the life expectancy gap, increasing wellbeing, decreasing inequalities and crime reduction all feature in its original manifesto.

Consistent with the promises made in the Levelling Up White Paper, the Autumn Statement gave the go-head to further devolution in Birmingham and Manchester, with other areas to follow. Can this help bring about levelling up, in all its forms? Essentially this will depend upon the financial impact of devolution, which is not yet clear. In the case of planning and development, devolved administrations can have the power to unlock new sites for regeneration, but they also require funding. Will they have the borrowing power, access to business rates or to increased council tax revenues? Will devolved administrations have the influence to attract strategic (potentially overseas) investors to fund large-scale projects? And how will this be impacted by a downturn in the economy? 

Investment Zones and levelling up

The original Investment Zone concept identified areas for accelerated growth, free of regulation and certain taxes. In contrast, its replacement is less ground-breaking, intended to refocus investment around established R&D and so to build on existing investment rather than create new growth areas. 

Ironically (given that the policy came to fruition during Michael Gove’s time out of office), the original concept of an Investment Zone was arguably more closely linked with the levelling up agenda than its replacement. 

The current, revised, Investment Zone is perhaps more aligned with the philosophy of the Oxford Cambridge Arc which was ‘dropped’ early in 2022. Like the Arc, today’s Investment Zones are intended to develop areas with proven capabilities in science and technology (or areas with a clear prospect to have the capability). Like the Arc, Investment Zones risk reinforcing already prosperous areas without delivering the ‘ripple effect’ of regeneration. But to succeed in the context of levelling up, the benefits must extend beyond the R&D hubs themselves and into the ‘hinterland’, providing the necessary housing at an affordable level, connected by sustainable public transport. 

Perhaps the fate of the Arc was sealed when the proposed road link between Oxford and Cambridge was abandoned and plans for housebuilding fell away. The location and development of Investment Zones elsewhere could learn from this: investment in the areas surrounding universities in Manchester and Leeds, for example, will benefit only if the towns between the two are bolstered by the Northern rail line; but to focus investment on the cities at the expense of the towns could be counter to the levelling up of the areas considered most in need.

Political realities 

The Levelling Up and Regeneration Bill may struggle to get onto the Statute Book before the next general election. As the 2020 Planning White Paper demonstrated, planning is rarely straightforward politically. And as the Government has found repeatedly, delivering housing and infrastructure growth may appease one element of the electorate, but in doing so will invariably upset another, and consequently it is difficult to arrive at a political consensus. 

So is there the time and resource for the grand political statement of ‘levelling up’ to achieve both its stated missions and its less overtly stated (but nevertheless key) objective of winning over the North a second time? Of course, levelling up is much more than planning, but in talking to my clients in this sector, I get the impression that the economy and net zero are of greater immediate concern, and among the wider electorate the cost of living poses a more immediate concern. 

When the Levelling Up, Housing and Communities Committee considered the Bill in the summer, it identified an absence of funding for its specific missions relating to public transport and local connectivity, digital connectivity, improving education outcomes, adult skills training and increasing healthy life expectancy. And consistent with the common accusations of statement over substance, it criticised the Bill for a lack of detail. 

Transport connectivity as the answer to levelling up 

For voters in the North, these are the issues on which levelling up will be judged and so the Bill will require some substantial changes in order to win their vote. 

The ultimate litmus test here is Bradford station. Research has demonstrated that regarding income, productivity and skills and qualifications, investment in levelling up in Bradford would facilitate a greater impact than in any other large town or city. Bradford has a young population and is in close proximity to Leeds. Having lost out following the HS2 decision, most recently it was due to benefit from a station on Northern Powerhouse Rail line, but there now appears a question mark over this decision, with potential impact upon Bradford’s future prosperity. 

So are Investment Zones part of the answer to levelling up? Investment zones weren’t part of the original concept of levelling up, and in their current, revised, format they do not necessarily pose a solution. To facilitate true regeneration in the North, infrastructure – specifically public transport links between the main cities - is key. Unfortunately the huge potential is invariably thwarted by long timescales and commensurate costs. While new sustainable public transport would invariably drive growth and in doing so, address many social and economic issues, the delayed return on investment, together with public spending cuts makes schemes such as Northern Powerhouse Rail and the HS2 extension to Leeds less likely. So while Investment Zones, applied in such a way that they are sensitive to the nuances of specific localities, may form part of the solution, this too is dependent upon good public transport.